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Hasbro (HAS) Surpasses Earnings and Revenue Estimates in Q3

Hasbro Inc.HAS posted robust third-quarter 2017 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.

Change in Reporting

Notably, since first-quarter 2017, Hasbro started reporting its revenues by brand portfolios that include Franchise Brands, Partner Brands, Hasbro Gaming and Emerging Brands. In fact, the company has ceased providing revenue breakdown by product category: Boys, Games, Girls and Preschool.

Earnings and Revenues Discussion

Adjusted earnings of $2.09 per share beat the Zacks Consensus Estimate of $1.93 by 8.3% and grew 3% year over year.

Hasbro's net revenue of $1.79 billion also improved 7% over the prior-year quarter and surpassed the Zacks Consensus Estimate of $1.77 billion by more than 1%. Notably, revenues improved in three of its four brand portfolios.

Hasbro, Inc. Price, Consensus and EPS Surprise

Hasbro, Inc. Price, Consensus and EPS Surprise | Hasbro, Inc. Quote

While Franchise Brands, Hasbro Gaming and Emerging Brands recorded a gain, revenues declined at Partner Brands.

Hasbro's cost of sales ratio increased 160 basis points (bps) to 40.8%. Meanwhile, selling, distribution and administration expenses ratio rose 40 bps but royalty expense ratio declined 20 bps. Additionally, operating profit fell 0.3% year over year to $360.9 million.

Behind the Headline Numbers

The Franchise Brand portfolio posted revenues of $827.3 million, up 7% year over year, driven by revenue growth in Nerf, Transformers, My Little Pony and Monopoly.

Partner Brand revenues decreased 2% to $485.7 million owing to declines in certain brands, including Yo-Kai Watch and Dreamworks' Trolls, which were partially offset by revenue gains in Beyblade, Star Wars, Disney Descendants and Sesame Street brands.

The Hasbro Gaming portfolio recorded a 22% year-over-year increase in revenues to $280.1 million. This uptick reflects Hasbro's diverse gaming portfolio, including face-to-face gaming and digital gaming.

Also, Emerging Brands revenues increased 9% to $198.3 million, driven primarily by growth in Baby Alive and Furreal Friends.

Regionally, net revenue from the United States and Canada segment increased 7% to $993.8 million, supported by growth across all portfolios. However, the segment was negatively impacted by the Toys "R" Us bankruptcy in the both the places as well as a shift in product mix. Consequently, the segment's operating profit declined 5% year over year to $217.3 million.

International revenues were $739.2 million, up 7% year over year. Revenue growth in Franchise Brands and Hasbro Gaming was offset by a decline in Emerging and Partner Brands. Notably, increased sales were registered across Latin America, Emerging markets, Europe and Asia Pacific regions. However, international operating profit was $132 million, down about 1% from a year ago.

The Entertainment and licensing segment revenues grew 4% year over year to $58.4 million, backed by higher consumer products and entertainment revenues. Also, the segment's operating profit increased 20% to $16.9 million.

Zacks Rank

Hasbro carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Upcoming Releases

JAKKS Pacific, Inc. JAKK and Mattel, Inc. MAT are scheduled to report third-quarter 2017 numbers on Oct 26. The Zacks Consensus Estimate for the quarter's earnings is pegged 87 cents per share for JAKKS Pacific and 56 cents per share for Mattel.

Meanwhile, Electronic Arts, Inc. EA is slated to release its quarterly numbers on Oct 31. The Zacks Consensus Estimate for the quarter's earnings is pegged at 54 cents.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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