Hasbro (HAS) Shares Soar on +83 Pct. Increase in First Quarter Profit

Shares of Hasbro Inc. (HAS) were trading up +4.09 or +4.96 percent to $86.50 per share in Monday’s premarket after the company reported a better than expected net profit and revenue for the company’s first quarter early this morning. Hasbro stock closed at $82.41 per share, up +1.08 or +1.33 percent in Friday’s regular trading session.

Stock Analysis

Pawtucket, Rhode Island based Hasbro Inc. was originally founded as Hassenfeld Brothers in 1923 as a company that sold textile remnants.
The company incorporated in 1926 and began selling school supplies and pencil cases. In the 1940’s the company began producing its first toys, selling doctor and nurse kits and modeling clay. In 1952 the company had its first big hit, Mr. Potato Head and in 1954, Hassenfeld Brothers became a major Disney (DIS) licensee. The company’s second big hit came ten years later with the release of the GI Joe “action figure”, a new term coined to market the toy to boys that didn’t want to play with dolls.

In 1968, the company shortened its name to Hasbro Industries and in 1982, the company bought the My Little Pony franchise. In 1984, Hasbro bought the Milton Bradley Company becoming Hasbro Bradley only to change its name back to Hasbro Inc. one year later. The company is one of the largest toy makers in the world, selling board games and toys globally under the Milton Bradley, Parker Brothers, Playskool and Tonka brands.

Hasbro reported its net profit had risen to $48.8 million or $0.38 per share compared to $26.7 million or $0.21 per share in the same period one year ago, an increase of +83 percent. Revenue for the first quarter came to $831.2 million versus $713.5 million in 2015’s first quarter, an increase of +16 percent.

The company said that revenue was negatively impacted by $28.6 million by the strong U.S. Dollar in the quarter. The analyst consensus was for the company to report earnings of $0.24 per share on revenue of $779.2 million.

Hasbro's Chairman, President and Chief Executive Officer Brian Goldner stated in the company’s press release that, “The momentum with which we ended last year has continued throughout the first quarter 2016, delivering revenue and earnings growth. Our focus on executing our Brand Blueprint continues to drive strong retail and consumer demand for our brands, while enhancing overall profitability of Hasbro.”

Goldner continued saying, “Hasbro Franchise Brand revenue increased behind continued double-digit growth in NERF and PLAY-DOH, overcoming expected difficult quarterly comparisons in TRANSFORMERS as well as a digital streaming deal in the Entertainment and Licensing segment recorded last first quarter. Demand for STAR WARS: THE FORCE AWAKENS products continued to be high and we benefited from the addition of DISNEY PRINCESS and FROZEN fashion and small dolls. We are very encouraged with global demand and our outlook for 2016.”

For the United States and Canada, net revenues increased +28 percent to $443.6 million compared to $345.7 million last year, up +89 percent. The company’s International division showed net revenues of $345.0 million versus $305.7 million in 2015’s first quarter, an increase of +13 percent. Nevertheless, the company’s Entertainment and Licensing division revenue declined to $42.5 million from $60.6 million, down -30 percent with only $5.4 million in operating profit compared to $16.4 million last year, a decline of -67 percent.

Hasbro investors and the market are reflecting the optimism generated by the earnings report in this morning’s premarket. The stock will open at a new all-time high.

Other News About HAS

Hasbro Doubles Down in Burbank

Company will move into a new 80,000 square foot office in Burbank, California’s Media Studios North Office Park.


Analyst increased the stock’s price target from $74 per share to $76 per share.

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Published on Apr 18, 2016
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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