Hasbro, Inc. (NASDAQ: HAS) reported its first quarter financial results on Tuesday and reported an unexpected profit for the quarter. The better-than-expected results sent shares surging by 15.4%.
For the first quarter, Hasbro reported diluted earnings of USD 0.21 on revenue of USD 732.5 Million. Hasbro saw its revenue increase by 2% year-over-year. Notably, the Company’s net earnings saw stronger growth compared to a net loss of USD 0.90 per share the same period a year prior.
The stronger-than-expected quarter was primarily led by the 1% sales growth in Hasbro’s U.S. and Canadian market. Despite the marginally increase, the two regions alone account for almost half of the Company’s revenue. International revenue declined by 2%, while Entertainment, Licensing, and Digital revenue rose by 24% year-over-year.
Hasbro’s franchise brands delivered revenue of USD 393.6 Million, increasing by 9% year-over-year. The Company’s partner brands fell by 14% year-over-year. However, Hasbro’s gaming revenue rose by 2%, while its emerging brands increased by 22%.
The Company’s franchise brand was fueled by revenue from Magic: The Gathering, Monopoly, Play-Doh, and Transformers sales. Gaming revenue was driven by sales of Duel Masters, Connect 4, and Twister. Meanwhile, emerging brands revenue was accelerated by the revenue in collectibles, Supersoaker, Furreal Friends as well as initial shipments of Power Rangers in North America.
“Our long-term investments in new platforms provided a meaningful contribution from our digital and e-sports initiative, Magic: The Gathering Arena, as well as growth in MAGIC: THE GATHERING tabletop revenues. In addition, MONOPOLY, PLAY-DOH and TRANSFORMERS were among the brands posting revenue gains this quarter.” said Brian Goldner, Hasbro’s Chairman and Chief Executive Officer.
“We are beginning to see improvement in our commercial markets, notably in the U.S. and Europe, and operating profit was driven by high margin revenue growth and our cost savings activities. With most of the year ahead of us, we remain on track to deliver profitable growth for the full-year 2019.” concluded Goldner.
However, Goldner said in a FactSet transcript that point-of-sale comparisons will remain a challenge for the first of the new year as Toys “R” Us moved into liquidation around the U.S.
Regardless, analysts still see upside for the toy company moving forward. MKM Partners analysts called the results a “solid beat” in the year’s smallest quarter and now hold a bullish stance on the stock. MKM analysts placed a buy rating with a price of USD 102 on Hasbro’s stock.