Economy

Hasbro, Inc. (HAS) Q3 Earnings Beat, But Q4 Outlook A Bit Light

Hasbro, Inc. (HAS) Q3 Earnings Beat, But Q4 Outlook A Bit Light”

It has revised its expectation for fourth-quarter revenue, projecting an increase of 4% to 7% versus the fourth quarter 2016. Net earnings for the third quarter, meanwhile, grew 3% to US$265.6 million, while operating profit decreased slightly to US$360.9 million (compared to US$362.1 million last year).

The company said it continues to work closely with Toys" R " Us heading into the holiday period. This had it beating out analysts' earnings per share and revenue estimates of $1.94 and $1.78 billion for the quarter, but it wasn't enough to save HAS stock. While the earnings beat, they were adversely impacted by Toys "R" Us's bankruptcy, and the negative effect will persist into the fourth quarter, and dent sales during the key holiday shopping season.

Hasbro said in a statement net revenue in the third quarter increased 7% to US$1.79bn from US$1.68bn in 2016.

The company said despite the quarter presenting "several obstacles", it remained well positioned for the holiday "backed by strong consumer momentum". It now expects revenue for the quarter to be up by 4% to 7% when compared to the same time past year. Analysts expected revenues of $1.78 billion for the quarter.

Global segment net revenues grew 7 percent to $739.2 million. These worldwide revenues include a favorable US$27.9 million impact from foreign exchange. Emerging markets revenues increased 8 percent in the quarter.

Hasbro's entertainment and licensing segment net revenue grew 4% to $58.4 million compared to $56.1 million in 2016, behind higher consumer products and entertainment revenues. On a regional basis, revenue was up in Europe (3%), Latin America (13%) and Asia Pacific (17%).

Franchise Brand revenues increased 7 percent driven by revenue growth in NERF, TRANSFORMERS, MY LITTLE PONY and MONOPOLY. While brands like Beyblade, Star Wars, Disney Descendants and Sesame Street posted revenue gains in Q3 2017, this growth was offset by declines in brands like Yo-Kai Watch and Dreamworks' Trolls.



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