The company said it was more negatively impacted by the liquidation and closure of Toys R Us than it had forecast.
Hasbro’s net revenues for the full-year 2018 decreased 12% to $4.58b versus $5.21b in 2017. The lower revenues reflect lost Toys R Us revenues throughout 2018 in the US, Europe and Asia Pacific, as well as a more meaningful impact than expected from the liquidation of Toys R Us inventory into these markets.
In addition, revenues declined internationally, most notably in Europe where the company addressed changing consumer shopping behaviours, a rapidly evolving retail landscape and reduced retail inventory, amidst challenging economies in key markets notably the UK. 2018 net revenues also include an unfavourable $43m impact from foreign exchange.
“2018 was a very disruptive year, driven by the bankruptcy and liquidation of Toys R Us across most of the world and a rapidly shifting consumer and retail landscape,” Brian Goldner, Hasbro’s chief executive officer, said in a statement. “During 2018, we diversified our retailer base, meaningfully lowered retailer inventories, and delivered innovative new offerings to our global consumers. We were not, however, able to recapture as much of the Toys R Us business during the holiday period as we anticipated as the effect of its liquidated inventory in the market was more impactful than we and industry experts expected. It is an unprecedented yet finite event.”
Brian added: ““Throughout 2018, we engaged in several major innovation initiatives and initiated significant organizational changes to enable us to stabilise our European business in 2019 and return Hasbro to profitable growth this year. In 2019 we are entering the next innovation cycle for Nerf and we will deliver break frame innovation across price points in the market this year. Hasbro’s Power Rangers line will hit the market in the second quarter, setting the stage for an all new era for this iconic brand. We are positioned to advance our gaming leadership, leveraging our investments, social relevance, innovative game play and the industry’s broadest games portfolio, including the launch of our digital game Magic: The Gathering Arena. We will deliver all new play experiences in support of a raft of compelling entertainment properties, including Marvel Studios’ Captain Marvel and Avengers: Endgame, Columbia Pictures’ Spider-Man: Far From Home, Disney Animation’s Frozen 2 and Lucasfilm’s Star Wars: Episode IX. Finally, to successfully deliver these and numerous other initiatives, we’ve re-imagined and re-designed our go-to-market strategy globally supported by compelling, digital-first marketing programs for our consumers and retailers.”
Hasbro said it earned $1.33 per share on $1.39b in revenue during the fourth quarter, compared to the $1.67 per share on $1.52b analysts had expected according to Refinitiv.