Author Topic: Hasbro 1st Quarter Losses  (Read 1773 times)

Offline CHEWIE

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Hasbro 1st Quarter Losses
« on: April 24, 2006, 10:25 PM »
Sorry of there is already a topic on this, I looked and didn't see one...

Mon Apr 24, 11:17 AM ET
 
NEW YORK (Reuters) - Hasbro Inc. (NYSE:HAS - news), the No. 2 U.S. toy company, on Monday said its quarterly loss narrowed as strong sales of board games and its products such as Playskool, Littlest Pet Shop, Nerf and Transformers offset slower "Star Wars" toy sales.

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But Hasbro warned the second quarter will be difficult compared with a year ago when its earnings jumped on strong sales of "Star Wars" merchandise ahead of the May 2005 release of the movie "Star Wars: Episode III-Revenge of the Sith."

"The second quarter will be challenging," President and CEO Alfred Verrecchia said on a conference call. "We shipped $147 million of 'Star Wars' product in second quarter of '05. Even if our first-quarter trend of an approximate 50 percent fall-off continues, we will have to make up over $70 million in volume."

"Star Wars" products, which include lightsabers and action figures, accounted for 16 percent of Hasbro's revenue in 2005. But with no new movie release set for this year, sales of "Star Wars"-related items are expected to drop.

Hasbro shares fell 2.6 percent to $20.37 in morning trading on the     New York Stock Exchange.

FIRST-QUARTER LOSS

Hasbro posted a first-quarter loss of $4.9 million, or 3 cents per share, including a stock-based compensation expense of 2 cents per share. On the same basis, the year-ago net loss was $7.2 million, or 4 cents per share.

The company was not required to report its earnings including stock compensation a year earlier. On that basis, excluding the stock-option expense, its year-earlier net loss was $3.7 million, or 2 cents per share.

Analysts, on average, expected a loss of 2 cents per share, including stock-based compensation, according to Reuters Estimates.

It is not uncommon for toymakers, who ring up the bulk of their profits during the fourth-quarter holiday shopping season, to post losses in the seasonally slow first quarter.

Hasbro's revenue rose 3 percent to $468.2 million, beating analyst targets of $427.3 million.

Revenue in its North American segment rose 7 percent to $310.3 million, boosted in part by sales of board games such as Candy Land and Scrabble. International segment revenue fell 5 percent to $145.5 million, hurt by a foreign exchange impact of about $10.4 million.

Hasbro said shipments of "Star Wars" products in the first quarter were $51 million, down from $101 million the prior year's first quarter.

Toymakers have been suffering from an industrywide slump as electronic gadgets including video games and digital music players pull away once-captive young consumers, and rising costs and cutthroat competition eat into margins.

Hasbro's results came a week after larger rival Mattel Inc. (NYSE:MAT - news) reported an operating loss in its first quarter and forecast a challenging 2006.


After reading this article they released, how can anyone who really feel sorry for them that collects Star Wars stuff?  They've made so many bone-headed decisions for the 2006 lineup that I think it's hilarious.  How about these total bomb ideas (that most collectors knew were horrible ideas) -

- Force Battlers
- Unleashed Mini Figures
- Choppers
- Transformers

What am I forgetting here that was a dumb idea?  Why couldn't they just stick with the regular line?  Focus 90% of the work on the 3-3/4" scale, not the other way around Hasbro. 

I get the feeling that Hasbro is saying Star Wars isn't popular anymore... if that's the case someone over there needs a slap in the face.  They're just making horrible decisions with the line right now.  Some good ones with the basic line, but they've concentrated too much on other sublines (that take up more retail space) that fewer people care about. 

 :)

Offline inadvertent imitation

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Re: Hasbro 1st Quarter Losses
« Reply #1 on: April 24, 2006, 10:56 PM »
You're absolutely right. If they'd have scrapped that other junk and just concentrated on getting better numbers of basic figures to the pegs, it might be a different story.
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Offline Diddly

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Re: Hasbro 1st Quarter Losses
« Reply #2 on: April 24, 2006, 11:02 PM »
Agreed, I couldn't help but laugh when I read that report. Hasbro wasted so much money on Choppers, Force Battlers, Transformers, and Mini-Unleashed, and basically neglected the Basic line. Combine that with the fact that hardly any stores recieve as many cases of basic figs, the big sellers, as they did last year. It's a losing combination for everyone.

Offline Darth Broem

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Re: Hasbro 1st Quarter Losses
« Reply #3 on: April 24, 2006, 11:09 PM »
Well that should be no surprise.  The farther away you get away from the film the slower it will sell.   But yeah all that other crap did not help either.  Their idiotic raise in prices screwed them as well.

Offline Rob

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Re: Hasbro 1st Quarter Losses
« Reply #4 on: April 25, 2006, 12:03 AM »
Doesn't hasbro almost always post a first quarter loss or at very least post their lowest revenues of the year?  So many toys bought in the fourth quarter of the previous quarter means people are buying fewer toys in the subsequent quarter.




Offline Darby

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Re: Hasbro 1st Quarter Losses
« Reply #5 on: April 25, 2006, 01:30 AM »
They always post a loss this time of year (or usually) and SW sales are half of what they were this time last year, but that's to be expected.  The article (and maybe Hasbro, too) is somewhat misleading, because if SW weren't still a hot commodity, they wouldn't be rushing out assortments of ROTS figs to fill lingering demand.

Offline Jon

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Re: Hasbro 1st Quarter Losses
« Reply #6 on: April 25, 2006, 01:44 AM »
Like how their revenue rose but their first quarter was a loss??!

Agree with all here..too much experimental waste on poorly thought out, non selling lines ::)

They could stick with the basics 'literally' and be in better shape.

Offline Jesse James

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Re: Hasbro 1st Quarter Losses
« Reply #7 on: April 25, 2006, 02:17 AM »
There's other things listed as the focal points of the "loss" too in the article...  It's rough all over, but Rob's right they always generally are on a downslope 1st quarter...  X-Mas is over, retail cuts back...

It did, at least in part, read like Star Wars was unpopular and they'd have to rely on other licenses like Transformers and Marvel in the near future...  That seems comical to me given the state of things at retail, however...

While things have been selling well for most of 2006 it seems, I am noticing some heavy back-up on the pegs in the last month or so.  WM is just now catching up, and they are backing up with the same crap Target/TRU had last month...  The fact they went from barren to slight pegwarming at WM's in my area is a good indication things aren't FLYING off the shelves like they were in late 2005.

Interest will inevitably diminish for the line...  I think it's starting now, but I think it's still lively...  A lot of the 1st quarter slowdown seems to be either Hasbro misjudging demand and being unable to supply retailers, or retailers not putting in the proper orders...  Or both.

Now though, we're at May and things are starting to back up...  Certain figures.  Certain others aren't still, for whatever reason, and the line's lively I do believe...  I think it slowed though some, so what they say is "true" to an extent, but I also think they're covering up that they didn't gauge demand properly (possibly tied with Retail misjudgment too of course).

Seemed like they really wanted to say that Star Wars just magically fell from under their feet in January though, and that they spent 3 months of dismal performance, and as a collector I find it more true that THEY didn't get the figures to retailers...  Because I sure as **** was ready to buy and didn't find a whole lot out there in quantity.
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Offline Paul

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Re: Hasbro 1st Quarter Losses
« Reply #8 on: April 25, 2006, 08:28 AM »
Disturbing that they called out Star Wars like that...almost like somebody was looking for a scapegoat...but like most of you guys, I'd like to look at:

SW Transformers
Choppers
LightSabers
Unleashed Mini's Battlepacks
Titanium (ships and figures)
Force Battlers
AttackTix

and those are just the Star Wars dregs...the whole company lost money...they might want to walk across the hall and see what Sigma 6 did to the GI Joe money they used to get.

I also agree that Distribution and Ordering are also two big factors that they did not even address. 

It just worries me that if they single out "OUR" line, then they may cut it.

And from looking at their numbers, it is not that they lost money, their stock paid 2 cents less per share, making it a down trend in profits from last year.  Only a fool would put 2006 expectations at the same level as 2005 performance.  Mostly because of the movie year, but from our level...can they expect to sell as many figures as last year, when they re-pack more, articulate less and don't ship the good Army Builders in bulk?

just my 2 cents (which is a loss)


 

Offline ruiner

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Re: Hasbro 1st Quarter Losses
« Reply #9 on: April 25, 2006, 10:16 AM »
You have to remember that last year at this time most retailers had 12 foot sections of SW product - that lasted for quite a while.  Around August maybe?

Gaining that much space at retail makes a huge difference in sales.


Offline Gatillo

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Re: Hasbro 1st Quarter Losses
« Reply #10 on: April 25, 2006, 10:27 AM »
I know how they can improve sales, besides dumping all the crap, just put out better case ratios of all products.  Obviously this applies to SW but there are other Hasbro lines that have crappy distribution as well.  I hear guys and gals talking about this in the toy aisles as I see the same crap over and over again.
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Offline Morgbug

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Re: Hasbro 1st Quarter Losses
« Reply #11 on: April 25, 2006, 01:03 PM »
The absolute junk they focused on has already been mentioned, but perhaps we should reiterate that the the figure selection for the first two waves of the Saga '06 collection didn't start with a huge bang:

Chewbacca rehash
Boba Fett rehash
Han with undersized Carbonite
Leia Boushh
Bib Fortuna
Barada

I'm a collector, so most of those are ok by me, but if you follow Hasbro's mantra of for the kiddies is there really any surprise that the first wave of 2006 was a dud?

Hoth:

Bren Derlin
General Veers
Snowtrooper rehash
Darth Vader rehash
AT-AT driver
General Rieekan redo
R2-D2
Gonk Droid

Again, how are you drawing the kiddies?  Wouldn't the kiddies be more inclined to PT figures?  Nah, never mind they can buy R2 and Vader.  But weren't Derlin/Veers/Rieekan responsible for half the Hoth case?  What rocket scientist thought that one up?

As indicated above, you've got your core lineup filled with undesirable product (poorly done, unnecessary repacks, etc.) packed in lousy ratios, where exactly is the surprise Hasbro?

Now had you gone merrily along and released the Geonosis/Coruscant waves first, you'd have probably retained the core kiddie market that gobbled up the ROTS stuff.  Sure, you'd still have to deal with the Christmas hangover, but it would have flown a lot better than releasing some money "saving" waves. 
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Offline Dan

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Re: Hasbro 1st Quarter Losses
« Reply #12 on: April 25, 2006, 01:40 PM »
Everything mentioned here makes sense, it is too bad the license has been treated this way.
If they can't afford tooling to make another mid-size ship that people have been clamoring for (Sith infiltrator, cloud car, etc) Than what are we doing with choppers and transformers? Those things took some cash to get rolling, and had a pretty poor chance of being successful. Now that sours retail on Star Wars (it occupies shelf space and doesn't sell), which convinces Hasbro it needs to focus its' efforts on other brands. Sideshow is a nice example of someone taking a Hasbro licensed scale that has been on the market for 11 years and making it work- Give buyers a quality product with a clear way of purchasing it while it is desired, and watch it succeed.

And there is no denying that the first two waves of figures were doomed to fail to capture the interest of new young fans who have only experienced the prequels or even only Revenge of the Sith. I love OT toys, but 1st quarter 2006 was nothing short of abandoning the kids new to the line. The only PT items available were mini-figures at a 9.99 price point and metal ships. After 80 odd figures in 2005 for one movie, that was quite a change.

And don't forget UGH- making it even harder for kids and collectors to find what they want.

Offline TheBlackDog65

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Re: Hasbro 1st Quarter Losses
« Reply #13 on: April 25, 2006, 02:28 PM »
To be honest this is what I would have expected from Hasbro. Basically they are saying that the line has lost popularity to the media to cover some bad decisions on their part in terms of the newer products (transformers, new unleashed etc). I would really like to see the profit line on the 3 3/4 line. I woudl bet that it is still profitable. So I don't think this means anything for the demise of the line. The 3 3/4 line is like the energizer bunny, it keeps going, and going, and going and will until that specific line is no longer profitable. I think that is some ways off yet.
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Offline Rob

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Re: Hasbro 1st Quarter Losses
« Reply #14 on: April 25, 2006, 02:37 PM »
Sideshow is a nice example of someone taking a Hasbro licensed scale that has been on the market for 11 years and making it work- Give buyers a quality product with a clear way of purchasing it while it is desired, and watch it succeed.

Yeah, with a limited run of internet-only figures and a 150% price increase.  I had to jump right out of the 12" game when Sideshow took over - $50.00 plus shipping per?!
« Last Edit: April 25, 2006, 02:38 PM by Rob »