Toys R Us liquidation hits Hasbro’s Q1 2018 results

Hasbro’s net revenues for the first quarter 2018 decreased 16 per cent to $716.3m versus $849.7m in 2017.

The firm has put the decrease in revenues down to the liquidation of Toys R Us in the US and UK, along with uncertainty in its other operations, as well as retail inventory overhang, primarily in Europe.

“The Hasbro teams executed extremely well during a challenging first quarter,” said Brian Goldner, Hasbro’s chairman and chief executive officer.

“Hasbro brands are resonating with consumers and consumer takeaway is positive. However, as we discussed earlier in the year, our first quarter was expected to be difficult. We are working to put the near-term disruption from Toys R Us behind us. Our global retailers view this as an opportunity in a key consumer category and are partnering with Hasbro to develop growth plans for our brands.

“New Hasbro initiatives shipping in this quarter and beyond won’t be caught up in the Toys R Us liquidation process. With the rapid shift to a converged retail environment, we accelerated plans we originally had spread throughout the year to transform our commercial organization on a more immediate basis.”

Territory-wise, Q1 2018 US and Canada segment net revenues decreased 19 per cent to $364.3m compared to $451.6m in 2017, while Q1 2018 international segment net revenues were $287.9m compared to $345.3m in 2017.

Europe net revenues decreased 28 per cent, Latin America increased two per cent and Asia Pacific increased three per cent. Emerging markets net revenues decreased five per cent in the quarter.

Hasbro Gaming revenue decreased 22 per cent to $105.2m. Revenue gains in Dungeons and Dragons, Jenga and several new game launches were offset by declines in other properties. Hasbro’s total gaming category was down 20 per cent to $203.5m.

Q1 2018 Franchise Brand revenues decreased 19 per cent to $361.7 million and growth in Monopoly was offset by declines in all other Franchise Brands in the quarter.

Emerging Brands revenue declined six per cent to $48.8 million. Revenue increases from Stretch Armstrong and Littlest Pet Shop products were offset by declines in other Emerging Brands. Emerging Brands revenues grew in the Entertainment and Licensing segment and declined in the U.S. and Canada and international segments.

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