Post by Admin on Apr 27, 2018 2:41:17 GMT
icv2.com/articles/news/view/40230/hasbro-sales-decline-133-million-q1
HASBRO SALES DECLINE $133 MILLION IN Q1
As It Writes Off $59 Million in Toys 'R' Us Bad Debt
Posted by Milton Griepp on April 23, 2018 @ 6:28 pm CT
Hasbro reported a tough Q1 on Monday, with a sales decline of over $133 million from the same quarter a year ago, and a $59.1 million write-off of debt from Toys ‘R’ Us that will never be paid (see “Toys ‘R’ Us Closing All US and UK Stores”). The bad debt is 100% of the amount owed at the time of the filing last fall, which means that product shipped through the holidays and Q1 was all on a COD or prepaid basis. The sales decline wasn’t all due to Toys ‘R’ Us; the company has problems in Europe, which it said last quarter were primarily due to Brexit.
Hasbro lost $112.5 million in Q1 vs. a $68.6 million profit in the year-ago period. Getting out as much bad news in the quarter as possible, the loss included not only a total of $61.4 million in costs associated with the Toys ‘$’ Us shutdown in the U.S. and the U.K. (mostly the bad debt mentioned above), it also included $15.7 million of severance costs associated with the company’s “commercial organization transformation” (which translates as relying less on sales in stores and more on e-commerce sales), and a $47.8 million charge due to the U.S. tax bill.
Hasbro’s gaming sales, including its “franchise brands” Monopoly and Magic: The Gathering, were down 20% in Q1 to $203.5 million, compared to $253.3 million in Q1 2017.
Magic: The Gathering sales were down for the quarter as anticipated, Hasbro CEO Brian Goldner said in the conference call, with lots of early interest in Dominaria (which had successful pre-releases last weekend, see “Four Noteworthy Things about the ‘Dominaria’ Pre-Release”), and Magic: The Gathering Arena doing well in closed beta.
There were lots of questions in the conference call about the Toys ‘R’ Us bankruptcy, and there were a few key takeaways:
Hasbro believes it has fully accounted for the bad debt, so direct costs from here on out will be limited, but sales impacts are expected to continue into 2019.
The company said it had held back initiatives at retail for Q1 and Q2 so they would not have to compete with the Toys ‘R’ Us liquidations.
The U.S. and UK stores, which are the only ones closing at this point, account for roughly 2/3 of Hasbro’s sales through the chain.
Hasbro has added 21,000 doors over the past three years, helping to give it more places to sell its products as the Toys ‘R’ Us stores close.
Other major retailers are expected to add space for Toys ‘R’ Us categories to pick up some of the volume from the bankrupt chain.
HASBRO SALES DECLINE $133 MILLION IN Q1
As It Writes Off $59 Million in Toys 'R' Us Bad Debt
Posted by Milton Griepp on April 23, 2018 @ 6:28 pm CT
Hasbro reported a tough Q1 on Monday, with a sales decline of over $133 million from the same quarter a year ago, and a $59.1 million write-off of debt from Toys ‘R’ Us that will never be paid (see “Toys ‘R’ Us Closing All US and UK Stores”). The bad debt is 100% of the amount owed at the time of the filing last fall, which means that product shipped through the holidays and Q1 was all on a COD or prepaid basis. The sales decline wasn’t all due to Toys ‘R’ Us; the company has problems in Europe, which it said last quarter were primarily due to Brexit.
Hasbro lost $112.5 million in Q1 vs. a $68.6 million profit in the year-ago period. Getting out as much bad news in the quarter as possible, the loss included not only a total of $61.4 million in costs associated with the Toys ‘$’ Us shutdown in the U.S. and the U.K. (mostly the bad debt mentioned above), it also included $15.7 million of severance costs associated with the company’s “commercial organization transformation” (which translates as relying less on sales in stores and more on e-commerce sales), and a $47.8 million charge due to the U.S. tax bill.
Hasbro’s gaming sales, including its “franchise brands” Monopoly and Magic: The Gathering, were down 20% in Q1 to $203.5 million, compared to $253.3 million in Q1 2017.
Magic: The Gathering sales were down for the quarter as anticipated, Hasbro CEO Brian Goldner said in the conference call, with lots of early interest in Dominaria (which had successful pre-releases last weekend, see “Four Noteworthy Things about the ‘Dominaria’ Pre-Release”), and Magic: The Gathering Arena doing well in closed beta.
There were lots of questions in the conference call about the Toys ‘R’ Us bankruptcy, and there were a few key takeaways:
Hasbro believes it has fully accounted for the bad debt, so direct costs from here on out will be limited, but sales impacts are expected to continue into 2019.
The company said it had held back initiatives at retail for Q1 and Q2 so they would not have to compete with the Toys ‘R’ Us liquidations.
The U.S. and UK stores, which are the only ones closing at this point, account for roughly 2/3 of Hasbro’s sales through the chain.
Hasbro has added 21,000 doors over the past three years, helping to give it more places to sell its products as the Toys ‘R’ Us stores close.
Other major retailers are expected to add space for Toys ‘R’ Us categories to pick up some of the volume from the bankrupt chain.