Hasbro Looks Better Than Mattel, but Problems Remain for Both

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When Hasbro Inc. (NASDAQ: HAS) reported its second-quarter financial results before the markets opened on Monday, the company said that it had $0.53 in earnings per share (EPS) and $972.5 million in revenue. That compared with consensus estimates from Thomson Reuters of for $0.46 in EPS and revenue of $972.37 million. The same period of last year reportedly had EPS of $0.41 and $878.95 million in revenue.

Later this week, rival Mattel Inc. (NASDAQ: MAT) is scheduled to release its most recent quarterly results as well. Analysts expect to see a net loss of $0.09 per share and $979.66 million in revenue. In the second quarter of last year, Mattel posted a net loss of $0.02 per share and revenue of $957.3 million.

Mattel is also looking to replace its long-standing chief financial officer, Kevin Farr. This is definitely another step in reshaping the senior management team, as recently appointed CEO Margo Georgiadis continues to make changes at the toy maker.

CFO Farr served under four different chief executives over 17 years. In this time, the stock has had a mixed performance. Since 2000, it has gained only about 50%, although it has been up over 300% as recently as 2013 (compared to July 2000).

Back to Hasbro: During this quarter the U.S. and Canada segment net revenues increased 16% to $494.4 million, versus $425.9 million in 2016. Revenues grew in Franchise Brands, Partner Brands and Hasbro Gaming, but declined in Emerging Brands.

The International segment net revenues increased 6% to $426.6 million, and the Entertainment and Licensing segment net revenues decreased 1% to $51.5 million.

In terms of its brands the company reported as follows:

  • Franchise Brands grew 21% to $545.7 million.
  • Partner Brands increased only 1% to $230.0 million.
  • Hasbro Gaming grew 6% to $133.9 million.
  • Emerging Brands fell 14% to $62.9 million.

Hasbro’s cash and cash equivalents totaled $1.43 billion at the end of the quarter, compared with $924.1 million in the same period of last year.

Brian Goldner, Hasbro’s board chair and chief executive, commented:

The Hasbro team executed another very strong quarter across the Brand Blueprint. Story-led brands and innovative brand initiatives drove double-digit revenue growth and an increase in operating profit margin. Franchise Brand, Hasbro Gaming and Partner Brand revenues grew year-over-year, and revenue increased across all geographic regions. We entered the important second half of the year with strong consumer momentum, a robust and diverse entertainment slate and compelling new brand initiatives.

Shares of Hasbro traded Monday morning down 8.5% to $106.10, with a consensus analyst price target of $108.73 and a 52-week range of $76.14 to $116.20.