Toy company Hasbro reports profit slump after Mattel says sales down
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.
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