Hasbro posts second quarter results

Hasbro has reported higher than expected quarterly profit thanks to sales of licensed properties.
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Hasbro has posted higher than expected quarterly profit today, boosted by sales for licensed properties including brands like Iron Man and Transformers.

The company said net profit rose to $37.5 million, or 25 cents a share, from $4.8 million, or three cents a share, a year earlier, when it took a charge for repurchasing its warrants from Lucasfilm and Lucas Licensing.

Analysts, on average, had expected a profit of 22 cents per share, according to Reuters Estimates. Hasbro also said sales rose 13 per cent to $784.3 million.

U.S. and Canadian sales rose 11 per cent to $467.7 million, while sales in international markets increased 15 per cent to $293.7 million, aided by the weak dollar.

This year companies are being hit by high commodity prices. Hasbro has cited higher costs for transporting its goods, despite expecting higher earnings this year.

"While input cost inflation continues to be challenging, thus far we have been able to mitigate most of the impact through cost savings initiatives and pricing actions," Hasbro Chief Operating Officer and Chief Financial Officer David Hargreaves said in a statement.

The firm's shares fell four per cent, hurt in part by the company's announcement to raise prices, said Chris White, a Wedbush Morgan Securities analyst: "Clearly, they are starting to feel (the effect of rising costs), and the question now is, how big is it?"

From 1st September, Hasbro will raise prices for its toys in the mid-single-digit percentage range to protect its margins, Hargreaves added on a conference call. Mattel also raised prices on most of its products by mid-to-high-single-digit rates in June.

Stern Agee analyst Margaret Whitfield predicted that sales of toys should remain steady during an unsteady economic period. "Toys are priced typically under $20. A price increase to keep pace with input costs is not as significant as it would be in the case of a higher-priced consumer product,' Whitfield said.

Source: Reuters


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