Before the opening bell on Oct. 26, Hasbro Inc. (HAS, Financial) released its third-quarter results. The toy company recorded an earnings and revenue beat as stay-at-home orders and social distancing measures led to high sales of Monopoly and other board games.
Shares soared more than 3% in premarket trading following the earnings announcement.
By the numbers
The American toy company posted earnings of $1.88 per share, up 2.17% from the prior-year quarter. Revenue of $1.78 billion declined 4% on a year-over-year basis. Analysts had predicted earnings of $1.62 on $1.73 billion in revenue.
Chairman and CEO Brian Goldner commented on the company's quarterly performance:
"Hasbro's third quarter performance was the result of great work from our global team and continued growing consumer demand for Hasbro brands in most markets. Our broad, innovative product line, including leadership in gaming, excellence in global ecomm and compelling marketing campaigns drove meaningfully better performance in the third quarter."
Segment performance
Revenue in the U.S. and Canada segment grew a combined 9% to $977.1 million. Hasbro cited growth in the "Magic: The Gathering" brand as one of the main contributors. In addition, stunning performance of Emerging Brands and Hasbro Gaming boosted the segment's overall quarterly growth. The division's operating profit rose 36% to $263 million.
In the International segment, revenue dipped 8% to $517 million, while the operating profit tumbled 5% to $63.9 million. Revenue was down due to lower sales in Latin America, partially offset by growth in Europe. The operating profit declined due to efforts to clear retail inventory in Latin America, which was partially negated by favorable product mix and cost control.
The Entertainment, Licensing and Digital segment saw revenue decrease a combined 23% year over year to $89 million. By contrast, operating profit of $32.8 million gained 33% as compared to the prior year thanks to favorable mix from growth in licensed digital gaming. Lower advertisement expenses associated with the launch of "Magic: The Gathering Arena" in 2019 coupled with lower development costs related to the closure of Backflip Studios.
The eOne division, which is mainly involved in the acquisition, distribution and production of films, music and television series, saw revenue decrease 32% to $193.5 million. The company attributed the decline to lower TV and film revenue as live-action productions and theaters were shuttered worldwide for a majority of the quarter due to the Covid-19 pandemic. Lower Family Brand revenue also contributed to the decline. Hasbro recorded an operating loss of $25.9 million in the segment.
Guidance
The company did not provide any guidance figures for earnings and revenue.
Disclosure: I do not hold any positions in the stocks mentioned.
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