July 23, 2018
Following liquidation of Toys “R” Us stores around the world, toy and game manufacturer Hasbro believes its diverse portfolio – notably entertainment and licensing – can help it weather ongoing changes at the retail level. Toys “R” Us was one of Hasbro’s biggest retail vendors.
“Our global teams executed well despite the disruption in the market,” CFO Deborah Thomas said July 23 in a statement following release of second quarter (ended July 1) financial results.
The company reported a 11% decline in profit to $60.3 million compared to net income of $67.7 million during the previous-year period. Revenue fell 7% to $904.5 million from $972.5 million last year.
“With $1.2 billion in cash, and a healthy balance sheet, our financial position is strong,” said Thomas. “Our diverse portfolio enabled us to partially offset the negative margin impact from lower revenues, but not entirely. We are working with our retailers to successfully execute their plans for Hasbro’s innovative portfolio this holiday season.”
Hasbro is banking on the recent $522 million acquisition of Saban’s Power Rangersand other entertainment brands as it further branches out into movies and TV show production.
Saban’s Power Rangers moviegenerated $142.3 million at the global box office. The title sold $14.4 million in combined DVD/Blu-ray Disc units (excluding digital) since its June 27, 2017 retail release, according to The-Numbers.com. It was also released on 4K UHD Blu-ray.
Hasbro is also working with Paramount Pictures and Netflix to produce and distribute content based on Hasbro brands, as well as original stories. Hasbro and Paramount have partnered on five Transformers movies to date, as well as two G.I. Joe films, and the first Transformers spinoff, Bumblebee, is slated for release in December.
Indeed, Hasbro’s entertainment and licensing segment was the only division to post an increase in Q2 performance. Operating income ballooned 64% to $18.6 million from $11.3 million, while revenue increased 26% to $64.7 million from $51.5 million.
“We are focused on moving beyond the near-term disruption of losing a major customer, with a clear path forward including new retailer activations to meet the consumer demand made available by the Toys ‘R’ Us departure,” said CEO Brian Goldner.