Positive results driven by toys based on Frozen II and Star Wars.
Net revenue for the full-year 2019 increased by 3% to $4.72b, versus $4.58b in 2018. Fourth quarter 2019 net revenue, which increased by 3% to $1.43b, was bolstered by strong demand for Hasbro’s products for Disney’s Frozen II and Star Wars.
International segment net revenue for the full-year 2019 was $1.84b, compared to $1.85b in 2018. Excluding a negative $76.5m impact of foreign exchange, international segment revenue increased by 4%.
Brian Goldner, Hasbro’s chairman and CEO commented: “The global Hasbro team delivered a good year and achieved key objectives we set for 2019. We profitably grew revenues across regions, supported by the successful execution of our channel strategy. We delivered growth in Magic: The Gathering driven by the successful launch of Arena and we executed at a high level during the holiday season. Our acquisition of Entertainment One accelerates our Brand Blueprint strategy and significantly expands our expertise and capabilities as a global play and entertainment company. Our teams are actively engaged to unlock value across our organization – in gaming, in toys, in consumer products and in entertainment.”
Revenue in the entertainment, licensing and digital segment rose 22% last year. Hasbro has recently completed a $4b purchase of Entertainment One, giving it access to brands like Peppa Pig and PJ Masks. Magic: The Gathering Arena and the Transformers: Bumblebee film are reported to have helped drive entertainment and licensing revenue.
The company said that the threat of tariffs impacted the third quarter, disrupting the supply chain and leading some retailers to cancel shipments. It has been working to diversify its supply chain to reduce its reliance on sourcing from China.
On an earnings call with analysts, CFO Deborah Thomas reported that the coronavirus has also disrupted Hasbro’s supply chain and commercial operations in China. She said that, although the impact to date is small, it is difficult to estimate the potential scale of disruption.
“Our teams worked extremely hard and executed at a high level this holiday, driving fourth quarter and full-year revenue and profit growth while also diversifying our supply chain and preparing to close a major acquisition,” said Deborah Thomas, Hasbro’s CFO. “We are strongly positioned to continue investing in long-term drivers of the business, including brand innovation, gaming and entertainment, as we also focus on returning to our stated gross Debt to EBITDA target of 2.0 to 2.5X over the next 3 to 4 years.”