Toy and game company Hasbro (HAS 96.03) reported its first quarter results this morning. Once again, it reported a positive surprise, and, once again, it made Mattel's (MAT 21.79) recent earnings report look bad.
The dichotomy between the two companies was apparent in their top and bottom lines. Hasbro reported growth in both while Mattel reported a net sales decline and a loss for the period on both a GAAP and non-GAAP basis.
The strength in Hasbro's results was rooted in its Hasbro Gaming and Emerging Brands segments, which enjoyed net revenue increases of 43% and 25%, respectively. The core Franchise Brands category saw net revenues improve 2% to $423.6 million while Partner Brands net revenues declined 18% to $213.0 million on some weakness in Star Wars and Marvel product sales ahead of major movie releases later this year.
The U.S. and Canada segment reported a 2% increase in external net revenues while International segment net revenues were flat. Entertainment and Licensing segment net revenues surged 24%.
Net earnings for the period increased 41% to $68.6 million, or $0.54 per diluted share, and were bolstered by an $0.11 per diluted share benefit related to an accounting change. The bottom-line result was comfortably ahead of analysts' average expectation and the profit of $0.38 per diluted share in the year-ago period; Hasbro also exceeded analysts' average expectation for revenues.
The year-over-year increase in earnings per share could have been better, yet Hasbro faced a 14-week operating period this year versus a 13-week period last year. That extra week, the company said, produced an additional week of expense, but did not contribute a comparable level of revenue. That distinction was apparent in the 9% drop in Hasbro's operating profit.
The company didn't provide any specific earnings guidance in its press release, although Hasbro did say that, based on its first quarter performance, its full-year expectations remain in-line with its previously stated objectives.
Shares of HAS, which are up 23.5% year-to-date, are trading 5.2% higher in pre-market action and testing an all-time high.