Hasbro reports strong growth in ecommerce channels, which helped to deliver healthy operating profit.
Hasbro’s third quarter revenue grew 9% in the USA and Canada and 7% in Europe, although overall international revenue fell by 8% during the quarter, primarily driven by declines in Latin America. Globally, Hasbro’s business in online channels grew by 50%. Overall, net revenues for the third quarter were $1.78b, down 4%, while the company posted a healthy operating profit of $336.6m.
Speaking about the results, Brian Goldner, Hasbro’s chairman and chief executive officer, commented: “Hasbro’s third quarter performance was the result of great work from our global team and continued growing consumer demand for Hasbro brands in most markets. Our broad, innovative product line, including leadership in gaming, excellence in global ecommerce and compelling marketing campaigns drove meaningfully better performance in the third quarter. Building off this quarter’s growth in toys, games and digital, we are positioned to deliver a good holiday season. Live-action entertainment production is returning, and we are set to improve deliveries in the fourth quarter with some moving into 2021. While Covid-19 remains a factor in our global operations, consumers remain engaged in activities that create joy and personal connections and we are working purposefully to deliver them the world’s best play and entertainment experiences, while remaining focused on the safety and well-being of our global teams and communities.”
Deborah Thomas, Hasbro’s chief financial officer, added: “Hasbro’s partner factories and warehouses are open and operating and production is largely in line with demand. With a strong focus on cash collections, DSOs are down year-over-year and sequentially, and we ended the quarter with $1.13 billion in cash on the balance sheet. Importantly, as we look to the future, we remain focused on executing a good holiday, managing our expenses and investing to support our business plans for future years.”
Revenue grew in the Franchise Brand segment, led by Magic: The Gathering and Hasbro Gaming, which saw growth across numerous games properties. Hasbro products for Lucasfilm’s Star Wars and The Mandalorian also delivered strong revenue growth in the quarter.
Global consumer point of sale increased mid-single digits, including double-digit gains in the USA, UK, Germany/Austria/Switzerland, Australia and New Zealand.
Revenue declined at eOne during the third quarter, reflecting entertainment delivery delays due to live-action production shutdowns and the ongoing, gradual return to production. A statement accompanying the results stated: “Demand for stories and content as well as viewership remain high. The teams have a robust development slate of over 150 active television and film projects, including more than 30 Hasbro properties. Within television, produced/acquired content half hours decreased due to production shutdowns. Within film, box office revenues declined as a result of theatre closures. Within Family Brands, engagement in animated content for Peppa Pig and PJ Masks remains strong, but revenues declined on lower consumer licensee revenues and lower advertising revenue from the YouTube platform. In music, revenue was negatively impacted by the loss of live events and associated artist promotions, as well as lower royalties from licensed and publishing music rights.”