Post by Admin on Oct 28, 2018 23:48:33 GMT
icv2.com/articles/news/view/41665/hasbro-sales-decline-post-toys-r-us-layoffs-coming
HASBRO SALES DECLINE POST-TOYS 'R' US, LAYOFFS COMING
Games a Bright Spot
Posted by Milton Griepp on October 23, 2018 @ 5:37 am CT
Games were one of the bright spots in a quarter when Hasbro sales declined 12%, according to information released in conjunction with the company’s Q3 report Monday. Layoffs in the range of a mid-single digit percentage of the company’s workforce are expected, according to the earnings call transcript.
The sales declines weren’t even geographically, with U.S. and Canada sales down a more modest 7%, while international was down 24%. The loss of Toys 'R' Us was the big reason cited for the U.S. sales decline, along with "not meeting all shipping demands late in the quarter across an expanded retail footprint," which moved $50 million in sales into Q4.
The Toys 'R' Us stores were in final liquidation in Q2, which pulled sales of what Hasbro estimated as 2.5 million units into the period. Those extra sales in Q2 were part of the Q3 decline. Hasbro estimated that it has picked up about one third of the Toys 'R' Us sales overall in the U.S. so far.
Sales in Hasbro’s game category, including both its gaming group and franchise brands Magic: The Gathering and Monopoly, were up 5% in the quarter, from $424.8 million to $447.8 million. Nine-month game category sales were up 1% to $964.2 million from $951.4 million in the year ago period.
Game sales growth was attributed to Magic: The Gathering (including the Core Set and Guilds of Ravnica), Dungeons & Dragons, Jenga, Don’t Step in it, and social game launches, which were partially offset by declines in Pie Face and some other brands.
The other bright spot was entertainment and licensing, where revenue was up 45%, primarily due to a multi-year streaming deal for Hasbro content.
The biggest area of decline was in Partner Brands, where increases in Marvel sales were not enough to offset declines from Star Wars and Disney properties.
The layoffs, which Hasbro was loath to describe as such, were presented as "organizational steps to ensure it has the right talent and capabilities to profitably grow going forward." The company will take a $50 to $60 million charge in Q4 for severance and other employee costs. The layoffs will produce annual savings of $30 to $40 million per year by 2020, the company said.
Overall, net revenues were down 12% to $1.57 billion vs. $1.79 billion in Q3 2017. Profits remained strong, at $263.9 million vs. $265.6 million in the year ago period, but $17.3 million of that was from the U.S. tax cut, so profits absent the tax cut would have been down about 7%.
Looking ahead, Hasbro expects to work through the biggest Toys 'R' Us impacts in the next few quarters, building on online sales, which were up high single digits in Q3, and new retail outlets, which the company is opening at a furious pace (10,000 new doors in the past year, according to CEO Brian Goldner in the conference call).
The company was high on the launch of online game Magic: The Gathering Arena, which went into Open Beta on September 27 and served 70 million games in the first four days. All measures, including monetization (micro-transactions in the free-to-play game), were ahead of goals, Goldner said.
Magic: The Gathering Arena is going to anchor a major move into e-sports, according to Goldner, who told Jim Cramer on Mad Money on CNBC, "You’ll see us in e-sports in a big way."
On the tabletop front, Hasbro called out the launch of the Transformers TCG at the end of Q3 and Monopoly: Fortnite, which had a big launch in early Q4; it was the top new item in the games super-category for the week ended October 6, according to NPD data.
HASBRO SALES DECLINE POST-TOYS 'R' US, LAYOFFS COMING
Games a Bright Spot
Posted by Milton Griepp on October 23, 2018 @ 5:37 am CT
Games were one of the bright spots in a quarter when Hasbro sales declined 12%, according to information released in conjunction with the company’s Q3 report Monday. Layoffs in the range of a mid-single digit percentage of the company’s workforce are expected, according to the earnings call transcript.
The sales declines weren’t even geographically, with U.S. and Canada sales down a more modest 7%, while international was down 24%. The loss of Toys 'R' Us was the big reason cited for the U.S. sales decline, along with "not meeting all shipping demands late in the quarter across an expanded retail footprint," which moved $50 million in sales into Q4.
The Toys 'R' Us stores were in final liquidation in Q2, which pulled sales of what Hasbro estimated as 2.5 million units into the period. Those extra sales in Q2 were part of the Q3 decline. Hasbro estimated that it has picked up about one third of the Toys 'R' Us sales overall in the U.S. so far.
Sales in Hasbro’s game category, including both its gaming group and franchise brands Magic: The Gathering and Monopoly, were up 5% in the quarter, from $424.8 million to $447.8 million. Nine-month game category sales were up 1% to $964.2 million from $951.4 million in the year ago period.
Game sales growth was attributed to Magic: The Gathering (including the Core Set and Guilds of Ravnica), Dungeons & Dragons, Jenga, Don’t Step in it, and social game launches, which were partially offset by declines in Pie Face and some other brands.
The other bright spot was entertainment and licensing, where revenue was up 45%, primarily due to a multi-year streaming deal for Hasbro content.
The biggest area of decline was in Partner Brands, where increases in Marvel sales were not enough to offset declines from Star Wars and Disney properties.
The layoffs, which Hasbro was loath to describe as such, were presented as "organizational steps to ensure it has the right talent and capabilities to profitably grow going forward." The company will take a $50 to $60 million charge in Q4 for severance and other employee costs. The layoffs will produce annual savings of $30 to $40 million per year by 2020, the company said.
Overall, net revenues were down 12% to $1.57 billion vs. $1.79 billion in Q3 2017. Profits remained strong, at $263.9 million vs. $265.6 million in the year ago period, but $17.3 million of that was from the U.S. tax cut, so profits absent the tax cut would have been down about 7%.
Looking ahead, Hasbro expects to work through the biggest Toys 'R' Us impacts in the next few quarters, building on online sales, which were up high single digits in Q3, and new retail outlets, which the company is opening at a furious pace (10,000 new doors in the past year, according to CEO Brian Goldner in the conference call).
The company was high on the launch of online game Magic: The Gathering Arena, which went into Open Beta on September 27 and served 70 million games in the first four days. All measures, including monetization (micro-transactions in the free-to-play game), were ahead of goals, Goldner said.
Magic: The Gathering Arena is going to anchor a major move into e-sports, according to Goldner, who told Jim Cramer on Mad Money on CNBC, "You’ll see us in e-sports in a big way."
On the tabletop front, Hasbro called out the launch of the Transformers TCG at the end of Q3 and Monopoly: Fortnite, which had a big launch in early Q4; it was the top new item in the games super-category for the week ended October 6, according to NPD data.