Led by growth in entertainment/licensing, international markets and preschool products, Hasbro’s net revenue increased by 5% to US$713.5 million in Q1 2015, up from US$679.5 million in Q1 2014. And excluding a loss of US$62.5 million from foreign exchange rates, the Pawtucket, Rhode Island-based toyco’s overall revenue increased by 14%.
Driven by licensing revenue from My Little Pony and Transformers during the 2014 holiday season, and a multi-year streaming deal for Hasbro Studios’ TV programming, Hasbro’s net revenues in its entertainment/licensing segment increased by 74% to $US60.6 million from US$34.9 million a year ago. This translates to 174% operating profit growth (US$16.4 million from US$6 million).
In Hasbro’s US and Canada segment, net revenues increased by 2% to US$345.7 million, compared to US$337.7 last year, with growth in the boys, games and preschool categories offset by declines in the girls’ category. Overall, the US and Canada segment saw operating profit increase by 16% to US$41.4 million from US$35.8 million.
Hasbro’s international segment sales increased by US$305.7 million from US$305.5 million, while operating profit dropped 21% to US$1.9 million from US$2.4 million. However, excluding the negative impact of foreign exchange rates, particularly in Europe, net revenues in the international segment grew by 20% and by roughly 25% in emerging markets. Overall, gains in boys and preschool categories were offset by declines in games and girls categories, and growth in Asia Pacific and Latin America were offset by a decline in Europe.
Looking at each category individually, Hasbro saw its biggest growth in preschool. Driven by increases in Play-Doh, Playskool Heroes, Transformers Rescue Bots and an initial shipment of Jurassic World products, which combined to help offset declines in core Playskool products, preschool net revenues were up 22% to US$88.1 million from US$72.5 million.
Net revenues were also up 10% to US$272.6 million from US$247.8 million in the boys category, thanks to growth in Transformers, Nerf and Marvel products, as well as initial Jurassic World shipments. The games category also saw 7% growth to US$235.6 million from US$220.5 million, as increased sales of Magic: The Gathering and Monopoly offset declines in several other brands, including Angry Birds.
The only category that experienced a decline in net revenues was girls, which dropped 16% to US$117.1 million from US$138.7 million last year. Hasbro cites declining sales for Furby, Furreal Friends and Easy Bake products for the drop, which was partially offset by growth in Littlest Pet Shop and Play-Doh DohVinci products.