NEW YORK, N.Y. – It was a blue Christmas for Hasbro. The No. 2 toy maker said Monday that its fourth-quarter profit slipped 1 per cent, pinched by softer-than-expected demand in the U.S. and Canada and slow sales of games and puzzles during the key holiday season.
The results contrasted with larger rival, Barbie-maker Mattel Inc., which last week reported better-than-expected results for the season. Toy makers can make up to half of their annual revenue during the holiday quarter.
While earnings for Hasbro – maker of Nerf, Transformers and My Little Pony – matched Wall Street estimates, revenue was slightly below forecasts.
Hasbro owns such classic board games as Monopoly, Life and Scrabble. It has updated the brands with digital versions and high-tech features, but board games were not big sellers this holiday season. It has also started making action movies with board game titles. “Battleship” from Universal hits theatres in May.
“We did not meet our expectations for growth in the U.S. and Canada segment, as we experienced weaker demand than we had anticipated, especially post-Thanksgiving, including challenges in the games and puzzles category,” President and CEO Brian Goldner said in a statement. He added that the company is putting new leadership in charge and has plans to rejuvenate results.
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The company has been revamping its games business and Goldner said in a call with analysts that this will help results improve going forward.
“(We have) established the new Gaming Center of Excellence, and they are innovating, creating new technologies and inventing new brands,” he said. “We continue to believe that through a combination of face-to-face, off-the-board, and digital gaming there is an opportunity to grow our gaming business.”
Hasbro Inc., based in Pawtucket, R.I., reported net income of $139.1 million, or $1.06 per share, for the period ended Dec. 25. That compares with $140 million, or 99 cents per share, a year earlier.
The results matched expectations of analysts surveyed by FactSet. Earnings per share rose because there were fewer shares outstanding in the current quarter.
Last week Mattel, the No. 1 toy maker in the U.S., reported its fourth-quarter profit climbed on strong holiday demand for its toys. But like Hasbro, the El Segundo, Calif., company said that its U.S. performance was weak.
Hasbro’s quarterly revenue rose 4 per cent to $1.33 billion from $1.28 billion, buoyed by overseas sales and its boys and preschool categories. Revenue dropped in its girls and games and puzzles categories
Wall Street expected $1.34 billion in revenue.
Revenue in the U.S. and Canada segment dropped 2 per cent, to $592.8 million, while international sales rose to 8.4 per cent, $669.8 million. Entertainment and licensing segment revenue climbed to $64.1 million from $53.5 million.
For the full year Hasbro earnings fell 3 per cent to $385.4 million, or $2.82 per share, from $397.8 million, or $2.74 per share, in the previous year. Annual revenue increased 7 per cent to $4.29 billion from $4 billion.
Hasbro expects higher earnings per share and revenue in 2012.
Shares rose 80 cents to close at $36.66 Monday.
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