Toy company Hasbro reports profit slump after Mattel says sales down

Toy company Hasbro reports profit slump after Mattel says sales down
Hasbro is hoping that toy sales related to the May 4 opening of "The Avengers" and other summer blockbusters help boost its earnings, which slumped in the first quarter. (Marvel / Disney)

Big summer movies such as “Battleship,” “The Avengers,” “Amazing Spiderman” and “

G.I. Joe

” – and the packaged toys that will be sold with them – can’t come soon enough forHasbro Inc., whose financial situation soured in the first quarter.

Hasbro fell to a loss of $2.6 million, or 2 cents a share, compared with profit of $17.2 million, or 12 cents a share, during the first quarter of 2011. Excluding $11.1 million in severance costs following some  layoffs during the quarter, the toymaker’s net earnings were $5.1 million, or 4 cents a share.

Revenue also slumped, sliding 3.4% to $648.9 million.

Of that, $289.7 million in revenue came from international markets, a 14% rise. Sales in the U.S. and Canada, however, dove 16% to $329 million.

Marvel and Star Wars-branded toys helped push sales in Hasbro's boys category up 4%; Sesame Street and Playskool Rescue Heroes products gave the preschool segment a 2% boost.

Even though brands such as Magic: The Gathering did well, Hasbro's games business slumped 9%. The resurgence in interest in My Little Pony couldn't keep the company's girls category from falling 18%.


Rhode Island-based Hasbro said it planned to spend more in future quarters on marketing and advertising. It's also looking forward to the return of the Gremlin-like toy robot Furby to its product lineup this fall, despite keeping mum on any major details.

The company's president Brian D. Goldner was optimistic in a conference call with analysts, saying that Hasbro has for months expected "a greater percentage of our business to come later in the year" (read: the all-important holiday season).

After having "reduced our head count and right-sized the business during the first quarter," Goldner also said that he expects revenue and earnings per share growth for 2012.

The toy company’s disappointing earnings come a week after rival Mattel Inc.reported similarly distressing numbers. The El Segundo-based maker of Barbie and Hot Wheels said its net income fell 53% in its first quarter to $7.8 million from $16.6 million a year earlier.


Follow Tiffany Hsu on Twitter and Google+