Games lead growth in Hasbro’s Q1

As the strong demand for games significantly boosted Q1 sales, the toy giant will launch the Hasbro Gaming Crate subscription service this summer.
April 24, 2017

Hasbro has its game face on. After Mattel missed its Q1 expectations with a 15% drop in global sales, Rhode Island-based Hasbro saw its revenue rise 2% to US$849.7 million and company earnings increase by 41% to US$68.6 million in the first quarter of the year.

The big winner was the toy giant’s Gaming category, which posted 43% growth in revenue to the tune of US$142.9 million. This was driven by new titles like Fantastic Gymnastics, robust digital gaming sales and this year’s viral sensation Pie-Face. Digital gaming sales rose thanks to higher revenue at Backflip Studios, in which Hasbro took a 70% stake back in 2013. (Habro’s Gaming category also saw gains both in Q4 2016 and fiscal 2016, due in large part to Magic: The Gathering, Pie-Face, Duel Masters, Simon, Bob-It and Speak-Out.)

To further capitalize on this growth in gamingand to compete with companies like Loot CrateHasbro has announced the launch of a subscription service called Hasbro Gaming Crate, which will launch in the US this summer.

Overall, the company’s Entertainment and Licensing segment saw revenue rise 24% to US$52.7 million, while the division’s operating profit increased 108% to US$11.3 million.

Revenue for Franchise Brands increased 2% to US$423.6 million, driven by growth for Nerf, Transformers and Monopoly brands. Partner Brand sales, however, declined 18% to US$213 million. Growth from Beyblade and DreamWorks’ Trolls were offset by declines from Marvel and Star Wars brands.

Meanwhile, Emerging Brands revenue increased 25% to US$70.2 million in the first quarter, thanks to Baby Alive and Furreal Friends.

Hasbro’s US and Canada segment net revenues in Q1 increased 2% to US$451.6 million. International net revenues remained steady at US$345.3 million. On a regional basis, Europe and Asia Pacific revenues declined (4% and 1%, respectively), while Latin America and Emerging Markets saw revenues increase 16% and 20%, respectively.

Q1 2017 was a 14-week period, while the first quarter of 2016 was a 13-week period. According to Hasbro, operating profit was negatively impacted by the extra week because its timing adds an additional week of expense, but does not contribute a comparable level of revenue. Operating income in the US and Canada declined 17% to US$64.8 million, while international operating income declined 81% to US$500,000.



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