Are Franchise Brands Enough to Lift Hasbro Earnings?

When Hasbro Inc. (NASDAQ: HAS) reported its third-quarter financial results before the markets opened on Monday, the toymaker said that it had $1.88 in earnings per share (EPS) and $1.78 billion in revenue. The consensus estimates had called for $1.62 in EPS and revenue of $1.73 billion, and the same period of last year reportedly had EPS of $1.84 on $1.58 billion in revenue.

During the latest quarter, the revenue and operating profit in the U.S. and Canada segment grew due to gains in Franchise Brands, led by Magic: The Gathering, as well as growth in Emerging Brands and Hasbro Gaming.

Hasbro products for Lucasfilm’s Star Wars and The Mandalorian also delivered strong revenue growth in the quarter.

Revenues and operating profit declined in the International segment, driven by declines in Latin America. However, European revenues did see growth.

In terms of its segments, the company reported as follows:

  • Franchise Brands net revenues rose 4% year over year to $807.6 million.
  • Partner Brands net revenues decreased by 4% to $409.2 million.
  • Hasbro Gaming net revenues increased 3% to $239.2 million.
  • Emerging Brands net revenues fell 18% to $155.0 million.
  • TV/Film/Entertainment net revenues decreased 28% to $165.7 million.

On the books, Hasbro’s cash and cash equivalents totaled $1.13 billion at the end of the quarter, up from $1.06 billion at the end of the same quarter last year.

The company offered no outlook in the report. However, consensus estimates are calling for $1.14 in EPS and $1.68 billion in revenue for the fourth quarter.

Hasbro stock traded down nearly 4% Monday morning to $88.69. The consensus price target is $93.86, and the 52-week trading range of $41.33 to $109.50.

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