Revenue down 12%
Hasbro’s (HAS) third-quarter revenues of $1.57 billion missed analysts’ projection of $1.71 billion. Year-over-year, its revenue fell 12%. The liquidation of Toys “R” Us continues to affect the top-line performance of major toymakers, including Hasbro.
Analysts expect Mattel’s (MAT) sales to decline 6.9% to $1.49 billion for the third quarter. For Jakks Pacific (JAKK), the sales estimate is $258.6 million, representing a decline of 1.5% year-over-year. Take-Two Interactive Software’s (TTWO) revenue for the second quarter of fiscal 2019 is expected to be $549.7 million, indicating a 4.7% decline year-over-year.
Hasbro’ top-line performance
Hasbro’s US and Canadian segment revenues fell 7% in the third quarter. In addition to losing Toys “R” Us, its inability to ship all orders placed in the quarter led to a decline in revenue.
In Europe, Hasbro is facing inventory clearance issues. Europe is also seeing a rapid shift to online shopping. All these factors have resulted in muted revenue growth in the region. Europe reported a revenue decline of 29%. Foreign exchange movements negatively impacted revenue by $11.3 million.
Hasbro is working on reducing its inventories. In the third quarter, retail inventories were down ~20% in Europe. On the third-quarter conference call, CEO Brian Goldner stated that Hasbro will likely put Europe’s excess inventory and Toys “R” Us troubles behind it by the end of 2018.
Overall, international revenues were down 24%. Latin America and Asia-Pacific reported revenue declines of 16% and 14%, respectively.
Franchise brand revenues fell 5% due to the weaknesses in My Little Pony, Transformers, and Nerf. However, Play-Doh, Monopoly, and Magic: The Gathering continued to perform well.
Revenue from Partner brands declined 37% as a weakness in other brands nullified the impact of Beyblade and Marvel. Hasbro’s gaming revenue was almost flat.
Due to the acquisition of Power Rangers properties and new product lines such as Lock Stars, Lost Kitties, and Yellies, revenue from emerging brands increased 2%.