Skip to main content

Toymaker Hasbro Inc topped Wall Street estimates for profit and revenue in the second quarter as it emerged from the worst effects of last year’s Toys ‘R’ Us bankruptcy, sending its shares up nearly 12 per cent.

The company, like other U.S. toymakers, was hit hard by the sooner-than-expected liquidation of Toys ‘R’ Us and had said it would get through the worst by the latter half of the year.

“We are focused on moving beyond the near-term disruption of losing a major customer, with a clear path forward including new retailer activations to meet the consumer demand made available by the Toys ‘R’ Us departure,” Chief Executive Officer Brian Goldner said in a statement. “(This year) is unfolding as expected.”

Story continues below advertisement

Hasbro has partnered with big media producers like Walt Disney to produce toys based on popular movie franchises like Star Wars and Marvel’s superheroes.

In its latest move to expand its brand portfolio, the company spent $522 million in May to add characters from the superhero TV show Power Rangers to its line of products.

For the quarter, net earnings fell 11 per cent to $60.3 million, or 48 cents per share, but topped analysts’ average estimate of 29 cents per share – their biggest beat in nearly two years, according to Thomson Reuters I/B/E/S.

The company’s overall revenue fell 7 per cent to $904.5 million in the quarter, but was nearly half the drop that analysts were expecting. Analysts on an average were estimating revenue of $833.1 million.

Revenue from Hasbro’s franchise brands segment, which makes Monopoly and Baby Alive and generates nearly half of its total revenue, fell 8 per cent.

But the decline was much softer than the 30 per cent drop anticipated by Linda Bolton Weiser, a D.A. Davidson analyst with four-star rating.

The only segment to report a rise in revenue was the entertainment and licensing business, which rose nearly 26 per cent to $64.7 million in the quarter.

Story continues below advertisement

“While product sales were weak in Q2, the benefits of entertainment and licensing was a meaningful offset,” Jefferies analyst Stephanie Wissink said in a note.

Shares of the Pawtucket, Rhode Island-based company, which was trading at $104.90 before the bell, was set to open at its highest in over five months.

Report an error
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments.
  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter