• Toy maker Hasbro loses $2.6M in 1st quarter on severance costs, revenue declines

      Hasbro Inc. posted a first-quarter loss on Monday mostly on hefty severance costs as revenue declined. The results from the maker of Monopoly and Transformers missed Wall Street estimates, and its shares tumbled more than 4 per cent in premarket trading.



      The first quarter is typically quiet for toy makers, especially compared with the run-up to the crucial holiday season. But first-quarter results do indicate how willing Americans are to spend on non-essential items.

      The nation's second biggest toy company experienced soft sales in its games and girls' products, but its preschool and boys' segments experienced higher sales.

      In March, Hasbro said it was cutting 170 workers because of the "underperformance" in Hasbro's U.S. and Canadian divisions, which are under new leadership. That led to $11.1 million in severance costs. The company also increased marketing and advertising in the U.S. and Canada in an effort to return to profit in those regions.

      President and CEO Brian Goldner said in a statement that Hasbro still expects a higher percentage of its full-year revenue to come in the second half of the year as compared with previous years, since it has four movie tie-ins in coming months.

      Those include "Battleship," which is tied to the popular Hasbro game and opens May 18. "Avengers" opens May 4, "G.I. Joe: Retaliation" opens June 29 and "Spiderman" opens July 3.
      The toy maker also anticipates that its 2012 earnings and revenue will climb, when removing the impact of foreign exchange rates.

      The company based in Pawtucket, R.I., said it lost $2.6 million, or 2 cents per share, for the period ended April 1. A year ago, it reported net income of $17.2 million, or 12 cents per share.

      Excluding 6 cents per share in severance costs, earnings were 4 cents per share. Analysts polled by FactSet expected earnings of 8 cents per share.
      There was one extra week in the current quarter.

      Revenue dropped 3 per cent to $648.9 million from $672 million a year ago, hurt by unfavourable foreign currency exchange rates. This missed Wall Street's estimate of $667.6 million.

      Hasbro shares fell $1.60, or 4.5 per cent, to $34.32 in premarket trading. Its shares have traded in a 52-week range of $31.36 to $48.43.

      The preschool category benefited from strong sales of Sesame Street and Playskool Rescue Heroes products, including the Transformers Rescue Bots. Its boys' category was helped by strong sales of its Marvel and Star Wars brands as well as its new construction toy line, KRE-O.

      Revenue slipped 16 per cent for the U.S. and Canada, but rose 14 per cent overseas. Entertainment and licensing revenue increased 19 per cent.

      Last week rival Mattel Inc., whose brands include Barbie and Hot Wheels, reported that its first-quarter profit declined, weighed down by lower sales and costs tied to an acquisition.

      The Canadian Press, 2012


      Read it on Global News: Global Edmonton | Toy maker Hasbro loses $2.6M in 1st quarter on severance costs, revenue declines
      Buy the hottest collectibles from: BigBadToyStore.com and BriansToys.com.


      Comments 17 Comments
      1. El Chuxter's Avatar
        El Chuxter -
        I can't help but wonder if anyone at the corporate level is smart enough or observant enough to notice practically everyone complaining about distribution, case assortments, and availability, and figure out the reason for the drop that seems obvious to the customers.

        I WANT to give them my money. I just can't, because I can't find anything.
      1. OC47150's Avatar
        OC47150 -
        I wholeheartedly agree, El Chuxter. Distribution continues to be an issue everywhere. And the increase price costs don't help.
      1. JediTricks's Avatar
        JediTricks -
        While I absolutely agree that Hasbro distribution is now the worst it's been across the board in all their collectible lines, I don't think what's going on with their losses is entirely related to that. Not only did they have some write-downs from underperforming brands like Transformers. The fact that "Star Wars" wasn't mentioned, good or bad, suggests that either they see it as treading water, or they were able to energize the retailers to buy product that the market won't support in a few months, leading to a glut that will see 3rd quarter problems.
      1. El Chuxter's Avatar
        El Chuxter -
        I was thinking more "across the board." GIJoe has been particularly bad; I've never seen more than half the figures and vehicles that were released since this time last year, and actually had to ask a friend in Canada to get some of them for me. (Pretty bad when "A Real American Hero" seems to be available everywhere but the United States of America.)
      1. Snowtrooper's Avatar
        Snowtrooper -
        I hope losing millions of dollars lights a fire under someone's ***.
      1. El Chuxter's Avatar
        El Chuxter -
        Another thought: wonder how much of this is due to (or offset by) The Hub?

        I still think they were idiots to so heavily promote TF:Prime and bury Renegades. Both had equally off-putting visual styles, but the difference was that Renegades had solid enough writing to make you forget that within a few minutes. It looked like the only reason they had was the the TF movie did better than the Joe movie.

        Also, I may not be a Brony, and, in fact, they may scare the hell out of me with their borderline obsession (I kid! You Bronies are really no different from the rest of us crazy collectors!), but Hasbro is foolish if they don't somehow appeal to that market with merchandise.

        Seriously, I think if every Hasbro team had one person who did nothing but interact with fans (and do it well, in an honest, informed, and non-condensing manner), and maybe even a few "official collector advisors" or something like that, they could better anticipate what will and won't sell with adults. I'm not about to argue that there are more kids spending money (or having money spent on their behalf) than adults; I've even argued against that notion and will continue to do so. But most kids will last a few years, at best, and have limited funds, whereas collectors generally have more disposable income and will stick with a line until it's no longer made or someone screws up really, really badly.
      1. Darth Duranium's Avatar
        Darth Duranium -
        Quote Originally Posted by El Chuxter View Post
        I was thinking more "across the board." GIJoe has been particularly bad; I've never seen more than half the figures and vehicles that were released since this time last year, and actually had to ask a friend in Canada to get some of them for me. (Pretty bad when "A Real American Hero" seems to be available everywhere but the United States of America.)
        I just sent a Cycle Armour GI Joe to a US pal so I can vouch for that, though I'd point out that I live in one of the 35 real American countries. Maybe Joe's not picky about which one.
        Another example of lousy US distribution: the US got very few Titanium C-9979s, but we were awash in them.

        The opposite happened a few years back: Hasbro Canada dropped the Titanium line in its last year which left us high and dry, and they didn't bother with an announcement. Nice.
        My newest beef is that Hasbro reintroduced the Titanium line this year... and every single release has been a straight repack. If Hasbro's losing money, it really doesn't come as a shock.
      1. El Chuxter's Avatar
        El Chuxter -
        I wasn't trying to imply that the US is the only American country, just that the team is a US team, and it's bizarre that there are ones that can't be found here.

        Another screw-up on the Joe line that I hope doesn't spread to other lines: the discount store repaint wave line (it's on its own packaging, so I guess it's its own line). Five very highly-requested repaints of existing figures and one ripe for custom fodder, along with repaints of each that include a color scheme very close to a vintage figure who was a repaint in the first place. And they're one per case, going to places like Dollar General that aren't everywhere and have lousy distribution. (The discount figures aren't even shown at conventions or announced in advance; it looks like some dude just happened to find them one day.) This despite Renegades Firefly being a huge pegwarmer in what they consider their "main line" because he was the last Renegades character anyone wanted as a figure but got made in huge numbers anyway.

        Like I said, listen to us when we tell you what we want, Hasbro. It may not always be feasible to do what we want, but at least we know what we want. You generally seem to guess wrong.
      1. Obsession is Nute's Avatar
        Quote Originally Posted by El Chuxter View Post
        I WANT to give them my money. I just can't, because I can't find anything.
        I say this ALL the time, I am glad I am not the only one that feels this way. I often find myself on eBay trying to get my Star Wars fix because the retail world is so barren. January 30 was THREE months ago Hasbro, I need NEW things to buy!
      1. Darth Duranium's Avatar
        Darth Duranium -
        Quote Originally Posted by El Chuxter View Post
        I WANT to give them my money. I just can't, because I can't find anything.
        Quote Originally Posted by Obsession is Nute View Post
        I say this ALL the time, I am glad I am not the only one that feels this way. I often find myself on eBay trying to get my Star Wars fix because the retail world is so barren!
        Agreed! I'm also finding that a lot of the smaller brick-and-mortar shops have closed, which doesn't help matters.
      1. JediTricks's Avatar
        JediTricks -
        Quote Originally Posted by Snowtrooper View Post
        I hope losing millions of dollars lights a fire under someone's ***.
        Part of the loss is the fire someone already had lit under them to pink-slip 55 Rhode Island HQ employees, they had to pay severance on those people.


        Quote Originally Posted by El Chuxter View Post
        Another thought: wonder how much of this is due to (or offset by) The Hub?

        I still think they were idiots to so heavily promote TF:Prime and bury Renegades. Both had equally off-putting visual styles, but the difference was that Renegades had solid enough writing to make you forget that within a few minutes. It looked like the only reason they had was the the TF movie did better than the Joe movie.

        Also, I may not be a Brony, and, in fact, they may scare the hell out of me with their borderline obsession (I kid! You Bronies are really no different from the rest of us crazy collectors!), but Hasbro is foolish if they don't somehow appeal to that market with merchandise.
        Interesting. It says the Hub is up 32%, but it doesn't say whether it's self-sustaining yet or if it's a drag on the company.

        I think Renegades was the loser in that tug-of-war match mainly because it was traditionally-animated which is expensive and slow. Also, with a war on, GI Joe is a difficult brand to market. I doubt it's about which movie did better, if anything that's an argument to put more effort into raising identification of the weaker brand, not the stronger.

        "Brony", that's a My Little Pony fanboy? I really don't get where that's coming from, but it sure has taken off the last few years. I thought they had merch for MLP already out. Or do you mean non-girl merch?


        Quote Originally Posted by Darth Duranium View Post
        I just sent a Cycle Armour GI Joe to a US pal so I can vouch for that, though I'd point out that I live in one of the 35 real American countries. Maybe Joe's not picky about which one.
        Another example of lousy US distribution: the US got very few Titanium C-9979s, but we were awash in them.

        The opposite happened a few years back: Hasbro Canada dropped the Titanium line in its last year which left us high and dry, and they didn't bother with an announcement. Nice.
        My newest beef is that Hasbro reintroduced the Titanium line this year... and every single release has been a straight repack. If Hasbro's losing money, it really doesn't come as a shock.
        Hasbro Canada and Hasbro UK/Europe are usually brand-sufferers, they generally get hosed, so when product shows up in those markets stronger, it usually means imminent collapse of that brand. Titanium Series, Star Wars originally, Transformers G2, GI Joe, MOTU all those brands started favoring the non-US distribution methods within a year of the brands' folding up.
      1. OC47150's Avatar
        OC47150 -
        Distribution may not be the entire problem, but a big source of the problem, IMO. In the last six months, I've found particular waves at only one store. At Christmas, it was the vintage Hoth Rebel trooper wave at TRU, and no where else. I've been fortunate enough to find the deleted scene wave -- twice! -- but only at WM. The last time I bought a figure at Target was last month and it was when Target ran the 50 percent off coupon. I hate letting coupons like that go to waste, so I picked up a Qui-Gon for customizing.

        Pricing is a factor, too. I try to wait for a sale before buying more than one figure at the current prices. I can afford a couple once a month at $9 - $10 apiece, but not too many more than that. And I'm really puzzled why the GI Joe figures are more than SW.

        I've bought just as many clearance figures for customizing as I have new figures this year!

        Here ends my rant.
      1. El Chuxter's Avatar
        El Chuxter -
        Quote Originally Posted by OC47150 View Post
        And I'm really puzzled why the GI Joe figures are more than SW.
        Not that it makes it smart, but part of this (particularly at Target) has been a markup of old product so they can mark it back down before the Retaliation stuff comes out and honestly say it's been marked down.
      1. JediTricks's Avatar
        JediTricks -
        GI Joe is not a product that should EVER cost the same as SW because SW has built-in licensing costs while GI Joe is an in-house brand. Of course, that doesn't take into account more accessories or lower sales of GI Joe, but in general it's a good rule of thumb. Marvel Universe and Marvel movie figures aren't as expensive as SW or Joe.
      1. El Chuxter's Avatar
        El Chuxter -
        More accessories.

        And, like the original line, more re-used parts.
      1. JediTricks's Avatar
        JediTricks -
        Quote Originally Posted by El Chuxter View Post
        More accessories.

        And, like the original line, more re-used parts.
        Don't forget more re-used accessories. It still shocks me to see accessories from when I was a kid with brand new figures.
      1. El Chuxter's Avatar
        El Chuxter -
        Especially when they don't work (Blowtorch) or are missing pieces (Mindbender)!

        They finally resculpted Order to come with the Renegades Law (as in the card art shows the Renegades character, but the figure inside is clearly a vintage update), but an earlier Law in a multipack came with a frickin' 1987 Order... unpainted, no less! (I actually got one of those uber-crappy Big Lots knockoffs a couple of years ago because the German Shepherd he came with was a better sculpt than the official Hasbro Order!) Too bad Croc Master still has a crappy 1987 gator that looks like a widdle baby with no teeth, and there aren't many gators in the right scale (though I've considered getting one of those overpriced "nature" toys).
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