Hasbro Reports Revenue and Earnings Growth for the Second Quarter 2011
- Net revenues for the second quarter 2011 grew 23% to $908.5 million compared to $737.8 million for the second quarter 2010;
- Net earnings increased to $58.1 million, compared to $43.6 million in 2010;
- International segment revenues grew 43% to $374.5 million with growth in every major geographic region;
- U.S. & Canada segment revenues were up 14% to $505.0 million; and
- Boys product category revenues nearly doubled, increasing 96% to $460.4 million
Hasbro, Inc. today reported revenue and earnings growth for the second quarter 2011. The Company reported 23% net revenues growth to $908.5 million compared to $737.8 million in the second quarter 2010. Second quarter 2011 net revenues include a positive $35.8 million impact of foreign exchange. The Company reported net earnings for the second quarter 2011 of $58.1 million compared to $43.6 million in 2010.
"The Hasbro team executed our branded-play strategy globally to deliver both a strong second quarter and to lay the framework for growth in 2011 and beyond," said Brian Goldner, President and Chief Executive Officer. "Today, our brands are bigger and more global, many are backed by entertainment and the application of our brand blueprint is providing consumers with the opportunity to enjoy our brands across an increasingly broad spectrum of consumer goods and entertainment formats."
"As expected, top line momentum in our business began to build during the quarter, led by strong gains in the TRANSFORMERS brand, driven by TRANSFORMERS: Dark of the Moon, and BEYBLADE, as well as continued double-digit growth in the International segment," Goldner said. "We have continued to make important investments in our business which will help drive both top and bottom line growth in the future. In the third quarter we are launching key new initiatives, including the global introduction of KRE-O, our new construction brand, the addition of the SESAME STREET brand to our preschool business, and innovative new products in core brands such as FURREAL FRIENDS and LITTLEST PET SHOP."
During the second quarter, the Company announced the establishment of its Center of Excellence for Hasbro Games in Rhode Island. As part of this announcement, the Company is reorganizing its global games business and moving some games marketing and development employees from East Longmeadow, MA to Rhode Island. This action resulted in $13.1 million of pre-tax expense in the second quarter. An additional $7 million is expected over the next three to four quarters primarily associated with recruiting and office space.
In the second quarter, worldwide net revenues in the Boys product category increased 96% to $460.4 million; the Games and Puzzles category decreased 12% to $231.3 million; the Girls category declined 11% to $119.1 million; and the Preschool category was down 10% to $97.6 million.
U.S. and Canada segment net revenues grew 14% to $505.0 million, an increase of $60.5 million compared to $444.5 million in 2010. The results reflect growth in the Boys category partially offset by a decline in the other three product categories. The U.S. and Canada segment reported an operating profit of $57.7 million, compared to $58.7 million in 2010.
International segment net revenues grew 43% to $374.5 million, an increase of $113.1 million compared to $261.4 million in 2010. Net revenues in the International segment grew 30% absent the positive $34.1 million impact of foreign exchange. Revenue in the International segment reflects growth in the Boys and Games and Puzzles categories partially offset by declines in the Girls and Preschool categories. The International segment reported a 191% increase in operating profit to $33.8 million, compared to an operating profit of $11.6 million in 2010.
Entertainment and Licensing segment net revenues declined 11% to $27.2 million, compared to $30.5 million in 2010. Revenue in the Entertainment and Licensing segment declined primarily due to lower movie-related revenue versus the second quarter 2010 partially offset by higher revenue from television programming. Licensing revenue associated with TRANSFORMERS: Dark of the Moon will begin to be recorded in the third quarter 2011. The Entertainment and Licensing segment reported an operating profit of $0.6 million compared to $13.0 million in 2010.