Hasbro held their 2015 Q1 Earnings Conference Call few hours ago and they have done well thanks to Transformers (from Boys Category) and My Little Pony (from Girls Category).
“Additionally, 2014 had two very significant motion pictures in the summer months, Transformers: Age of Extinction and The Amazing Spider-Man 2. Both of these films benefited from shipments in the first half of last year. In 2015 there is a tremendous film slate we are supporting, headlined by The Avengers: Age of Ultron in theatres on May 1st and Star Wars: The Force Awakens on December 18th. These release dates are spread across a greater period of time versus last year’s concentrated timing of summer releases. There are also several other notable films this year, including Jurassic World on June 12th, Ant-Man on July 17th and our own Jem and the Holograms on October 23rd.”“Finally, revenues grew 74% in the Entertainment and Licensing segment. This strong performance was the result of growth in lifestyle licensing revenues for Hasbro Franchise Brands, notably MY LITTLE PONY and TRANSFORMERS, as well as the contribution of a multiyear digital streaming deal for Hasbro Studios programming.”
During the Q&A session, Hasbro CEO thanked the Transformers Franchise and stated that Transformers saw the fastest growth in the last quarter.
You can find more information regarding Hasbro’s 2015 Q1 results after the jump. Selected slides from the presentation are attached with this news post as well.
- First quarter 2015 revenues grew 5% to $713.5 million; Absent a negative $62.6 million impact of foreign exchange, first quarter 2015 revenues grew 14%;
- Revenue and operating profit grew in the U.S. and Canada and Entertainment and Licensing Segments; International segment revenues increased 20% absent foreign exchange;
- Franchise Brand revenues grew 20%; Boys, Games and Preschool category revenues increased in the quarter;
- Operating profit increased 25%; Net earnings of $26.7 million or $0.21 per diluted share; Net earnings increased 43% excluding $13.5 million, or $0.10 per diluted share, of favorable tax adjustments in the first quarter 2014;
- Generated $315.3 million in operating cash flow; $1.1 billion in cash at quarter end;
- Repurchased approximately 436,000 shares of common stock at a total cost of $25.2 million and an average price of $57.80 per share.
PAWTUCKET, R.I.–(BUSINESS WIRE)– Hasbro, Inc. (NASDAQ: HAS) today reported financial results for the first quarter 2015. Net revenues for the first quarter 2015 increased 5% to $713.5 million versus $679.5 million in 2014. Excluding a negative $62.6 million impact from foreign exchange, revenues increased 14%.
Net earnings for the first quarter 2015 were $26.7 million, or $0.21 per diluted share, compared to $32.1 million, or $0.24 per diluted share, in 2014. Net earnings for the first quarter 2015 increased 43% versus adjusted net earnings of $18.6 million, or $0.14 per diluted share, in 2014. As reported first quarter 2014 net earnings included favorable tax adjustments of $13.5 million or $0.10 per diluted share.
“2015 is off to a good start with continued momentum in our business, led by growth in all of our Franchise Brands and the underlying strength in demand across international markets, including the emerging markets,” said Brian Goldner, Hasbro’s President and Chief Executive Officer. “For the first quarter, we grew revenue, improved profitability and delivered growth in adjusted net earnings despite significant foreign exchange headwinds. While the first quarter is the least significant quarter of the year, the global Hasbro team delivered a strong start to the year.”
“Our first quarter results highlighted the strength of our brands, our global reach and our balance sheet,” said Deborah Thomas, Hasbro’s Chief Financial Officer. “Foreign exchange did negatively impact both revenues and earnings in the quarter; however, several factors helped mitigate the negative impact to profitability. These included the continued momentum in our Franchise Brands, the benefit of favorable foreign exchange product cost hedges and a larger contribution of higher-margin Entertainment and Licensing revenues. Our first quarter results keep us on track to achieve our previously stated targets.”
U.S. and Canada Segment net revenues increased 2% to $345.7 million compared to $337.7 million in 2014. The Segment’s results reflect growth in the Boys, Games and Preschool categories, partially offset by a decline in the Girls category. The U.S. and Canada Segment reported 16% operating profit growth to $41.4 million compared to $35.8 million in 2014.
International Segment net revenues were $305.7 million compared to $305.5 million in 2014. Revenues in the Boys and Preschool categories increased but were offset by declines in the Games and Girls categories. On a regional basis, growth in Asia Pacific and Latin America was offset by a decline in Europe. The emerging markets increased revenues 3% in the quarter. Excluding an unfavorable $61.0 million impact of foreign exchange, primarily in Europe, net revenues in the International Segment grew 20% and approximately 25% in the emerging markets. The International Segment reported operating profit of $1.9 million compared to $2.4 million in 2014.
Entertainment and Licensing Segment net revenues increased 74% to $60.6 million compared to $34.9 million in 2014. Segment performance was driven by licensing revenues for Franchise Brands, in particular MY LITTLE PONY and TRANSFORMERS, during the 2014 holiday period and a multi-year digital streaming deal for Hasbro Studios television programming. The Entertainment and Licensing Segment reported 174% operating profit growth to $16.4 million compared to $6.0 million in 2014.
First quarter 2015 net revenues in the Boys category increased 10% to $272.6 million. This growth was driven by year-over-year revenue gains in Franchise Brands TRANSFORMERS and NERF, as well as from growth in MARVEL products and initial shipments of JURASSIC WORLD.
Games category revenues increased 7% in the quarter. Franchise Brands MAGIC: THE GATHERING and MONOPOLY increased revenues in the quarter and were partially offset by declines in several other brands, including ANGRY BIRDS games.
The Girls category revenues declined 16% in the first quarter 2015, primarily due to declines in FURBY, FURREAL FRIENDS and EASY BAKE products. Growth in LITTLEST PET SHOP and PLAY-DOH DOHVINCI products partially offset these declines.
Preschool category revenues increased 22% in the first quarter 2015. The PLAY-DOH brand and PLAYSKOOL HEROES products, fueled by growth in TRANSFORMERS RESCUE BOTS and initial shipments of JURASSIC WORLD, continued to be strong performers in the category and more than offset declines in core PLAYSKOOL products.
Dividend and Share RepurchaseThe Company paid $53.5 million in cash dividends to shareholders during the first quarter 2015. The next quarterly cash dividend payment of $0.46 per common share is scheduled for May 15, 2015 to shareholders of record at the close of business on May 1, 2015.
During the first quarter, Hasbro repurchased approximately 436,000 shares of common stock at a total cost of $25.2 million and an average price of $57.80 per share. At quarter-end, $539.0 million remained available in the current share repurchase authorization.
BigRed
I don't see why Disney would even bother acquiring Hasbro since so many Hasbro licenses are Disney's to the point where they are completely unable to ever compete with Disney and could be easily swayed to follow all of their orders anyway.
Cheebs
If anything could make me go exclusively third party…
…assuming 3P could still exist if Disney was is charge.
tikgnat
I wonder how much Hasbro stock will jump if/when Disney announce a takeover…
ex dtw2003
Brevity. Wit. And all that.
If Hasbro knew tons of girls bought TFs they would include them in promo pics or in other spots because it would make financial sense.
All this micro-aggressive stereotype perpetrating corporate boogeyman stuff is just soooooo ridiculous. Seriously people, get thicker skins and just buy what you like. Companies WILL respond.
Cheebs
Oh dear God. AoE had like one and a half waves. That was not good…
Afterburner
Whatever it was, it reeked of poor planning and poor understanding of collector priorities (hint – car Arcee comes before orange Jhiaxus or Tankor). Why do we know how the final waves end up but they never seem to be able to find a way to mitigate this? Leave the garbage to the final wave if you can't figure out a way to keep retailers interested. Or make less waves.
blackTtop
I highly doubt Hasbro put Arcee at the end of their production run because of prejudice or discrimination against women. It's probably determined by the character's popularity or presence in current media, not because they think male characters should come out first.
Negativedark
The simple toys were a huge amount of what was on the shelves. Although i don't have the sales data, I kinda doubt they'd be reporting better than expected profits if those didn't sell. And if those are what sold well…
I'm not sure he was a factor. 1st quarter is actually last quarter of last year. The CW stuff isn't even fully in distribution in the Brick and Morters now.
BigRed
Don't know why people are yelling "generations totally pwned duh bay movies" thing considering the true comparison between performance of AoE line and this year's output will only come in the second quarter.
What you guys are seeing is the comparison of Combiner Wars/new cartoon RID to last year's beginning which was Generations and the leftovers of Beast Hunter's ending line worldwide, which is a pretty predictable favorable outcome since RID is a brand new show with a new toyline instead of the ending of another and CW is an overall theme that pushes for collecting an entire wave instead of a more usual approach.
Doc bot
Woo hoo! Stock up 12.5% for the day. That should pay off almost all my TF purchases for the year. HAS has been one of my better investment choices. Great dividend too.
I'd like to add that although they give lots of love to TFs in this report, I worry that TFs are about to become much less important to Hasbro by the end of the year. 2 reasons: Star Wars and Frozen. I worry that a lot of staff will start to get moved to those toy lines and our beloved TFs will have less resources and attention paid to it. It's all good if you also collect Star Wars stuff, but I don't think I can handle collecting another toy line.
Cheebs
You guys do know that boys actually are different than girls, right?
It's not just evil marketing.
ZapRowsdower
How was any of that political or silly? It sounded very well worded to me.
Don't forget Arcee, too. How many collectors picked her up? And did any of them stop to thank the TV executives who told Hasbro to create her? I mean, she's the proof: Hasbro is dead set in making ONLY male characters until forced to do otherwise. Have things changed? Yeah… sort of. But the fact is that female characters STILL get pushed to the production end, in order to make room for more and more males, with the result being that a lot of markets simply never got Arcee in their toy aisles (end of wave syndrome). It's a microcosm of the Hasbro-sexism problem, IMO.
I think you don't understand the sociological implications of what Hasbro does with the TF brand. And who cares if you do? No one: most customers are so set with their boy-toy and girl-toy prejudices that you'd have to work pretty hard to break them of those bad habits. For example, I don't see many Barbies with TFs pics on the boards… and why is that? Statistically speaking, SOME Barbies should sneak into the shots (collector owned, child owned, etc), but they don't. And you can thank the stigma: no boy (adult or child) wants to be caught with a Barbie in his room or hands. It's this kind of silly fear and anxiety that prevents these toys from reaching wider markets.
You know, girls identify with girl TFs more than boy TFs, so it wouldn't be too hard for Hasbro to start including girls more in that way. The fact that they don't plays into how they're content to just perpetuate the ignorant "boys-toys" category rather than really pioneer something innovative for both genders.
Why did we need a Nerf REBELLE? Why couldn't Nerf toys be made and marketed to both genders at once? It's really amazing to see kids grow up in much the same way they did in the 50s! You'd think by now that more boys would consider playing Nerf wars with girls, but I guess not. Clearly, Hasbro knew this, and Nerf Rebelle was born and successful. Although, it's important to note that pioneering movies like Hunger Games put the idea in girl's minds: they can be warriors and enjoy a boy-hobby like archery, too! WHO KNEW?
I don't know how so many people don't consider that the G1-inspired toys could be a desperation move to grab more business when the movie line is dying. If the movie lines failed entirely, do you really think G1 would be ignored? Quite contrary, G1 has and will always be a sort of fail-safe, "Plan B" for Hasbro for several good reasons: 1) Built-in consumer-base, 2) solid ideas that work (i.e. Combiners), and 3) a myriad of untapped characters that combat the boredom brought on by seeing the same Camarro and Semi-truck in the aisles!
But you were just being facetious, weren't you? :->
Cheebs
Bay 4 life!
NotRamjet97
…except you wouldn't have Gen. Combiners to begin with had it not been for the movies
YoungPrime
And I doubt is was due to that Bay crap.
Generations CW FTW!!!!
Afterburner
Thanks to the success of Generations and licensing. Thanks to collectors.
rapid_fire
Combiner wars for the win!
SPLIT LIP
Nope and nope.
There's nothing simple or cheap about Combiner Wars Superion. And if there is, then it's given way to a truely excellent figure/group of figures.
Autovolt 127
Hooray A Corporation is Making Profits!
Cheebs
So I guess we're all stuck with simple cheaply made yet expensive Transformers for the time being…seeing as it worked beautifully apparently…