Quarterly profit and revenue defy expectations as jump in Marvel toy sales help recover lost ground following Toys R Us bankruptcy.
Expectations for Hasbro’s earnings were almost half of what they were a year ago going into the results release, driven chiefly by concerns over the disappearance of its biggest retail partner, Toys R Us.
In the event, net earnings fell 11% to $60.3m, or 48 cents per share, but were way past analysts’ average estimate of 29 cents per share – the biggest beat in nearly two years, according to Thomson Reuters I/B/E/S.
Chief executive Brian Goldner commented: “We don’t expect to recapture all of the loss (of) revenue in 2018, but by 2019 we should have moved beyond Toys R Us.”
Toys R Us accounted for 10% of all Hasbro sales and the company has moved quickly to reallocate inventory to Walmart, Target and others. The company also created exclusive products and programmes online to support retailers and retail events such as JD.com’s JD day, Amazon’s Prime Day, and the 11/11 Alibaba Singles Day, executives said on a post earnings call.
The company said it had benefited from higher sales of a Marvel portfolio that has been boosted by two of the past year’s biggest movie successes, Avengers: Infinity War and Black Panther.
Revenue at the company’s three main business segments all topped estimates based on the forecasts of three sector analysts, according to data firm FactSet.
The company’s overall revenue fell 7% to $904.5m in the quarter, but was nearly half the drop that analysts were expecting. Analysts on average were estimating revenue of $833.1m.
The only segment to report an outright rise in revenue was the entertainment and licensing business, which rose nearly 26% to $64.7m in the quarter.
Hasbro’s shares were up as much as 14% following the results release.