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Hasbro's (HAS) Q4 Earnings Beat, Revenues Miss Estimates
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Hasbro Inc. (HAS - Free Report) posted mixed fourth-quarter 2017 results, with earnings surpassing the Zacks Consensus Estimate and revenues lagging the same.
Adjusted earnings of $2.30 per diluted share surpassed the consensus mark of $1.82 by 26.4%. Earnings grew 40.2% from the year-ago quarter on benefits from the recent U.S. tax reform.
Net revenues totaled $1.60 billion, missing the consensus mark of $1.73 billion by 7.5%. Revenues also fell 1.8% year over year.
Revenues from its Partner Brands and Europe declined in the fourth quarter which significantly affected net revenues. However, strength in the franchise brand revenues drove the top line. Management believes that product innovation and digital initiatives will help the company gain traction in 2018 and beyond.
Notably, shares of Hasbro have lost 1.1% in the past year, underperforming the industry’s gain of 47.1%.
Brand Portfolio Performances
The Franchise Brand portfolio posted revenues of $764.2 million, up 11% year over year driven by revenue growth in NERF, TRANSFORMERS, MY LITTLE PONY and MONOPOLY.
Partner Brand revenues decreased 21% to $342.9 million owing to decline in STAR WARS, YO-KAI WATCH and DISNEY FROZEN, which was partially offset by increase in BEYBLADE, MARVEL and SESAME STREET.
The Hasbro Gaming revenues declined 4% year over year to $343.3 million.
Emerging Brands revenues declined 5% year over year to $145.7 million.
Operating Highlights
Hasbro's cost of sales, as a percentage of net revenues, increased 50 basis points (bps) to 39.4%.
Meanwhile, selling, distribution and administration expenses ratio declined 220 bps and royalty expense ratio fell 60 bps.
Additionally, operating profit, as a percentage of net revenues, increased 130 bps year over year to 17%.
Balance Sheet
Cash and cash equivalents, as of Dec 31, 2017, were $1.6 billion, up from $1.3 billion as of Dec 25, 2016.
Inventories totaled $433.3 million as of Dec 31, 2017, compared with $387.7 million as of Dec 25, 2016.
Long-term debt increased to $1.7 billion as of Dec 31, 2017, from $1.2 billion as of Dec 25, 2016.
In the quarter under review, Hasbro’s board of directors declared a quarterly cash dividend of 63 cents per common share. This represents an increase of 6 cents from the previous payout of 57 cents. The dividend will be payable on May 15, 2018, to shareholders of record at the close of business as on May 1, 2018.
In 2017, the company paid $277.0 million in cash dividends to shareholders and repurchased 1.58 million shares of common stock at a total cost of $150.0 million and an average price of $94.74 per share. At the end of 2017, $178 million was available under the current share repurchase authorization.
2017 Highlights
Net revenues in 2017 increased 4% year over year to $5.21 billion. Adjusted net earnings were $5.46 per diluted share, up from $4.46 in 2016.
In 2017, U.S. and Canada segment net revenues increased 5% to $2.69 billion from a year ago. The segment’s operating profit declined 2% to $509.9 million due to increased advertising as well as higher bad debt expense related to the Toys “R” Us bankruptcy filing.
International segment net revenues increased 2% to $2.23 billion from 2016. The segment’s revenues included a favorable $75.3 million impact from foreign exchange. On a regional basis, Europe net revenues decreased 2%, Latin America increased 5% and Asia Pacific increased 12% year over year. Emerging markets net revenues increased 5% in the year. Segment operating profit decreased 22% to $228.7 million due to higher sales allowances, advertising costs and unfavorable product mix.
Entertainment and Licensing segment net revenues increased 8% to $285.6 million from the previous year, driven by growth in consumer products and digital gaming, as well as the addition of Boulder Media. Operating profit totaled $96.4 million in the year.
Penn National and Nintendo’s current-year earnings are likely to grow 647.1% and 273%, respectively.
Mattel (MAT - Free Report) recently posted lower-than-expected results in fourth-quarter 2017. Adjusted loss of 72 cents per share compared unfavorably with the Zacks Consensus Estimate of earnings of 17 cents.
Zacks Top 10 Stocks for 2018
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?
Last year's 2017 Zacks Top 10 Stocks portfolio produced double-digit winners, including FMC Corp. and VMware which racked up stellar gains of +67.9% and +61%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Hasbro's (HAS) Q4 Earnings Beat, Revenues Miss Estimates
Hasbro Inc. (HAS - Free Report) posted mixed fourth-quarter 2017 results, with earnings surpassing the Zacks Consensus Estimate and revenues lagging the same.
Adjusted earnings of $2.30 per diluted share surpassed the consensus mark of $1.82 by 26.4%. Earnings grew 40.2% from the year-ago quarter on benefits from the recent U.S. tax reform.
Hasbro, Inc. Price, Consensus and EPS Surprise
Hasbro, Inc. Price, Consensus and EPS Surprise | Hasbro, Inc. Quote
Net revenues totaled $1.60 billion, missing the consensus mark of $1.73 billion by 7.5%. Revenues also fell 1.8% year over year.
Revenues from its Partner Brands and Europe declined in the fourth quarter which significantly affected net revenues. However, strength in the franchise brand revenues drove the top line. Management believes that product innovation and digital initiatives will help the company gain traction in 2018 and beyond.
Notably, shares of Hasbro have lost 1.1% in the past year, underperforming the industry’s gain of 47.1%.
Brand Portfolio Performances
The Franchise Brand portfolio posted revenues of $764.2 million, up 11% year over year driven by revenue growth in NERF, TRANSFORMERS, MY LITTLE PONY and MONOPOLY.
Partner Brand revenues decreased 21% to $342.9 million owing to decline in STAR WARS, YO-KAI WATCH and DISNEY FROZEN, which was partially offset by increase in BEYBLADE, MARVEL and SESAME STREET.
The Hasbro Gaming revenues declined 4% year over year to $343.3 million.
Emerging Brands revenues declined 5% year over year to $145.7 million.
Operating Highlights
Hasbro's cost of sales, as a percentage of net revenues, increased 50 basis points (bps) to 39.4%.
Meanwhile, selling, distribution and administration expenses ratio declined 220 bps and royalty expense ratio fell 60 bps.
Additionally, operating profit, as a percentage of net revenues, increased 130 bps year over year to 17%.
Balance Sheet
Cash and cash equivalents, as of Dec 31, 2017, were $1.6 billion, up from $1.3 billion as of Dec 25, 2016.
Inventories totaled $433.3 million as of Dec 31, 2017, compared with $387.7 million as of Dec 25, 2016.
Long-term debt increased to $1.7 billion as of Dec 31, 2017, from $1.2 billion as of Dec 25, 2016.
In the quarter under review, Hasbro’s board of directors declared a quarterly cash dividend of 63 cents per common share. This represents an increase of 6 cents from the previous payout of 57 cents. The dividend will be payable on May 15, 2018, to shareholders of record at the close of business as on May 1, 2018.
In 2017, the company paid $277.0 million in cash dividends to shareholders and repurchased 1.58 million shares of common stock at a total cost of $150.0 million and an average price of $94.74 per share. At the end of 2017, $178 million was available under the current share repurchase authorization.
2017 Highlights
Net revenues in 2017 increased 4% year over year to $5.21 billion. Adjusted net earnings were $5.46 per diluted share, up from $4.46 in 2016.
In 2017, U.S. and Canada segment net revenues increased 5% to $2.69 billion from a year ago. The segment’s operating profit declined 2% to $509.9 million due to increased advertising as well as higher bad debt expense related to the Toys “R” Us bankruptcy filing.
International segment net revenues increased 2% to $2.23 billion from 2016. The segment’s revenues included a favorable $75.3 million impact from foreign exchange. On a regional basis, Europe net revenues decreased 2%, Latin America increased 5% and Asia Pacific increased 12% year over year. Emerging markets net revenues increased 5% in the year. Segment operating profit decreased 22% to $228.7 million due to higher sales allowances, advertising costs and unfavorable product mix.
Entertainment and Licensing segment net revenues increased 8% to $285.6 million from the previous year, driven by growth in consumer products and digital gaming, as well as the addition of Boulder Media. Operating profit totaled $96.4 million in the year.
Zacks Rank, Peer Release & Stocks to Consider
Hasbro carries a Zacks Rank #3 (Hold).
Two better-ranked stocks in the Consumer Discretionary sector are Penn National Gaming (PENN - Free Report) and Nintendo (NTDOY - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Penn National and Nintendo’s current-year earnings are likely to grow 647.1% and 273%, respectively.
Mattel (MAT - Free Report) recently posted lower-than-expected results in fourth-quarter 2017. Adjusted loss of 72 cents per share compared unfavorably with the Zacks Consensus Estimate of earnings of 17 cents.
Zacks Top 10 Stocks for 2018
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?
Last year's 2017 Zacks Top 10 Stocks portfolio produced double-digit winners, including FMC Corp. and VMware which racked up stellar gains of +67.9% and +61%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2018 today >>