Hasbro's Sales Climb but Profit Slips

hasbro earnings
By Shailaja Sharma

Hasbro (HAS), the second-largest U.S. toymaker, reported lower-than-expected quarterly revenue as sales of its games and preschool products fell for the second straight quarter.

Shares of the company, known for its My Little Pony toys and action figures based on "Transformers" films and Marvel Comics characters, fell as much as 3.6 percent Monday on the Nasdaq exchange.

Hasbro's U.S. and Canada sales declined 2 percent in the second quarter on lower demand for games as children shift to the electronic versions of the games on smartphones and tablets.

Sales of games, Hasbro's second-largest business that includes the high-margin trading card game Duel Masters, fell 12 percent, the highest decline in three years.

%VIRTUAL-article-sponsoredlinks%Hasbro expects games including My Monopoly, Simon Swipe and Battle Masters featuring "Transformers" and Marvel Comics characters to boost sales in the holiday season, Chief Executive Officer Brian Goldner said on a post-earnings conference call.

"We have compelling new innovative games across consumer groups," Goldner said.

Last week, larger rival Mattel (MAT) reported a 17 percent fall in quarterly sales of its Fisher-Price preschool products.

Mattel also posted its third straight fall in quarterly revenue as demand for its traditional toys in North America remained weak and sales of its Barbie doll declined the most since mid-2009.

While Hasbro's sales of games and preschool products remained weak in the quarter ended June 29, the company saw strong demand for its action toys amid the release of the latest "Transformers" and "Spider-Man" movies.

Hasbro owns the "Transformers" brand and holds toy licenses for Marvel Comics' characters such as Spider-Man and Iron Man, who have had phenomenal box office success over the past few years.

Total revenue rose about 8 percent to $829.3 million as international sales jumped 17 percent, driven by double-digit growth in Europe, Latin America and Asia-Pacific region.

Sales of boys' toys, Hasbro's largest business, rose 32 percent. Sales of girls' toys such as My Little Pony and Nerf Rebelle bow and arrow toys, which drove the company's revenue in the March quarter, rose 10 percent.

The company's net income fell 8.2 percent to $33.5 million, or 26 cents a share. Excluding items, Hasbro earned 36 cents a share.

Analysts on average had expected a profit of 36 cents a share on revenue of $839 million, according to Thomson Reuters I/B/E/S.

Hasbro's shares were down 2.9 percent at $51.64 in late morning trading. The stock had risen 14 percent this year to Friday's close.

The 7 Biggest Financial Mistakes 40-Somethings Make
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Hasbro's Sales Climb but Profit Slips
If you've been making mortgage payments for a while now, it may have become just another task you do automatically each month. But it's time to start thinking about your end game. When will your house officially be paid in full, and how will that date intersect with your other plans? Do you need to adjust anything to make your "mortgage freedom" date align with the rest of your life? For example: Do you want to have your house paid off by the time your kids leave for college? If so, start scrutinizing the timing, so you can figure out if you need to make extra payments.
The average student graduating in 2014 emerged with $29,000 in student loan debt. There's no predicting what that number will be once your children are ready to don a cap and gown. But you don't want your kids to be saddled with tens of thousands in debt as they begin their adult lives (or potentially live in your basement well into their 30s because of that debt).

While your children should absolutely apply for every scholarship they can, you can't count on them getting what they'll need. So. there's no time like the present to start seriously building up their college funds. If you're not quite sure about the best ways for you to do that (529 plans are great, but they're not the only good choise), a fee-only financial adviser can walk you through your options.
Are you putting aside enough for retirement? Aim to replace 70 percent to 85 percent of your current income, or save 25 times your current annual expenses. Once you have that final number in mind, use an online retirement calculator or sit down with a financial adviser to come up with a plan for how much you'll need to save each year to reach it. If you haven't already done this, don't delay another day. Future You will thank you.
Credit card debt is a shackle that can prevent you from reaching every other monetary goal on your list. One of the first things you need to do to get your financial house in order is to eliminate all consumer debt -- the sooner, the better. Otherwise, you're losing money each month that could be put to better use elsewhere.

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Your current vehicle won't last forever, no matter how diligent you are at taking care of it. When it comes time to buy a new car, will you have saved enough to make the purchase in cash? As you get older, you should be systematically reducing the number of financial obligations you're saddled with -- not adding on new ones. Car loans take from three to seven years to pay off. (The current average length is around 5½ years.) Even if your current car lasts you well into your 50s, financing a new one could mean that you'll be facing loan payments into your retirement years. Instead, plan ahead so you can pay cash.
If you're married, have children or support your parents financially, you should have term life insurance. Tragedies can happen at any time, and term insurance can help you create a Plan B for the benefit of those who rely on you. If you're healthy, you can get term life insurance coverage with a $500,000 benefit for roughly $29 a month. That's a small price to pay to know your family will be cared for if anything happens to you. The longer you wait to get that coverage, the higher your price will be.
Just like life insurance, disability insurance is a wise investment. (And, just like life insurance, the longer you wait to get it, the higher your monthly payments will be.) Should you fall ill or get injured and be unable to work for a period of time, disability insurance can pay out 50 percent to 70 percent of your income. Hopefully, you'll never need to use it -- but you never want to be in a spot where you do need it and you don't have it.
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