The toy company posted strong gains in the third quarter 2017, despite being negatively impacted by the Toys ’R’ Us bankruptcy.
NORTH AMERICA–Hasbro has reported that net revenues for the third quarter 2017 have increased 7 percent to $1.79 billion, compared to $1.68 billion in 2016.
The toy company also reported that net earnings for the quarter increased 3 percent to $265.6 million, compared to $257.8 million in 2016.
In the U.S. and Canada, Hasbro reported that revenues increased 7 percent to $993.8 million, compared to $932.8 million in2 016. However, the segment was negatively impacted by the Toys ‘R’ Us bankruptcy. In combination with a shift in product mix, this contributed to a 5 percent decline in the segment’s quarterly operating profit to $217.3 million, compared to $228.0 million in 2016.
On the international front, revenues increased 7 percent to $739.2 million, compared to $690.7 million in 2016. Third quarter 2017 international segment revenues also include a favorable $27.9 million impact of foreign exchange. On a region basis, European revenues increased 3 percent, Latin America was up 13 percent and Asia-Pacific increased 17 percent.
Within Hasbro’s entertainment and licensing segment, net revenues increased 4 percent to $58.4 million, compared to $56.1 million in 2016. The segment’s operating profit also increased 20 percent to $16.9 million (or 28.9 percent of net revenues), compared to $14.1 million (25.1 percent of net revenues) in 2016.
Franchise brand revenues were also up for the third quarter 2017. The segment increased 7 percent to $827.3 million, which was primarily driven by revenue growth in Nerf, Transformers, My Little Pony and Monopoly. In addition, emerging brands revenue increased 9 percent to $198.3 million, which was driven by growth in Baby Alive and Furreal Friends. The segment also grew in the U.S. and Canada as well as the entertainment and licensing segments.
Alternatively, partner brand revenues decreased 2 percent to $485.7 million. However, partner brand revenues increased in the U.S. and Canada and declined in international markets. Within the segment, brands like “Beyblade,” Star Wars, Disney’s Descendants and “Sesame Street” all posted revenue gains, while brands like “Yo-Kai Watch” and DreamWorks’ Trolls were down compared to last year.
Finally, Hasbro’s gaming revenues grew 22 percent to $280.1 million, which was driven by social games like “Speak Out” and “Fantastic Gymnastics.” The total gaming category grew 4 percent to $424.8 million, which included revenue growth from Monopoly and an expected decline in MAGIC: The Gathering. Overall, Hasbro’s gaming revenue grew in the U.S. and Canada as well as international segments.
“The global Hasbro team delivered another good quarter. Our Brand Blueprint strategy is successfully driving the business despite a challenging economic environment in the U.K. and Brazil, as well as a short-term retailer disruption,” says Brian Goldner, chairman and chief executive officer, Hasbro. “As a result of the Toys ‘R’ Us bankruptcy filing in the U.S. and Canada, there was a negative impact on our quarterly revenues and operating profit. However, our multi-platform content strategy, combined with an industry leading investment in innovation and an omni-channel commercial approach, is driving strong consumer takeaway heading into the holiday season as consumers engage with Hasbro brands across a multitude of experiences.”