Hasbro First-Quarter Revenue Helped by One Direction, Marvel Products
UPDATED: Angry Birds Star Wars, G.I. Joe and Transformers games and toys also contributed to revenue, while first-quarter earnings were hit by restructuring charges.
Hasbro on Monday reported a widened first-quarter loss, but stronger underlying earnings, with Marvel, G.I. Joe, Angry Birds Star Wars, One Direction and Transformers games and toys contributing to the results.
The toy giant posted a loss of $6.7 million, compared with a year-ago loss of $2.6 million. Excluding restructuring charges and tax adjustments, earnings rose 30 percent to $6.6 million, in line with Wall Street expectations. Revenue rose 2 percent to $663.7 million, exceeding analysts' estimates.
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Under a previously announced cost cutting initiative, Hasbro is targeting $100 million in annual savings by 2015. Overall, the first quarter included $28.9 million in charges associated with restructuring actions, compared with $11.1 million in the same period last year. On a call, management said it is looking for
a 10 percent workforce reduction, including voluntary retirements.
Entertainment and licensing segment revenue rose 5 percent in the first quarter to $30.8 million, but the unit's operating profit dropped 32 percent to $5.3 million. The company said the profit figure was dragged down by $1.7 million in restructuring charges, but said the unit's financials have also benefited from the sale of TV programs.
First-quarter revenue in the company's boys category decreased 20 percent to $242.8 million, but Marvel and G.I. Joe product revenue grew. Other brands faced difficult comparisons with the first quarter of 2012.
Hasbro's girls business posted a 23 percent quarterly revenue gain, with One Direction products, such as dolls and a board game tied to the boy band, and My Little Pony toys contributing to the growth.
Hasbro's games unit continued its positive momentum, bringing in 26 percent revenue growth. Among the growth drivers were Angry Birds Star Wars and Transformers games.
"We entered 2013 with a heightened focus on our brands, organization and profitability, and delivered a good start to the year," said Hasbro CEO Brian Goldner. "In the first quarter, our global Hasbro teams generated revenue growth and strong underlying profitability growth."
On the earnings call, Goldner said that Marvel product revenue was up more than 20 percent for the first quarter, but full-year comparisons are difficult. He also highlighted new Thor and Wolverine toys coming later this year tied to film releases.
Goldner also lauded the performance of the recent G.I. Joe movie sequel and highlighted that Paramount has "indicated" it will work on a third GI Joe movie.