Hasbro held their Third Quarter 2017 Earnings Conference Call this morning to investors, journalists and other interested parties.
Speaking to the audience, Hasbro CEO Brian Goldner stated “Transformers multi-screen entertainment continued to drive revenue growth in the franchise. Point of sale is up versus last year and up versus the last movie year. This fall we continue with new entertainment initiatives to engage our fans. The global home entertainment release of Transformers: The Last Knight took 6th place on September 28th and all-new episodes of Robots In Disguise and Rescue Bots are running on linear and streamed services. In addition, in partnership with Machinima, in November we are debuting the second chapter of the critically acclaimed Digital Animated series Prime Wars Trilogy…Titans Return.
Royalty expense decreased 20 basis points to 7.8% of revenue, on the small decline in Partner Brand revenues partially offset by the continued 14 growth from Transformers: The Last Knight movie product, which carries some external royalties.”
Mr. Goldner did not forget to add a comment regarding TRU bankruptcy filing:
“Our commercial and finance teams are effectively managing the short-term disruption from the Toys“R”Us restructuring and bankruptcy filing in the U.S. and Canada, as well as ongoing softness in the UK and Brazil.”
Hasbro CFO Deb Thomas also stated “As Brian mentioned, the Toys“R”Us bankruptcy filing in the U.S. and Canada negatively impacted our third quarter revenue and operating profit, including incremental bad debt expense associated with the bankruptcy. Excluding the incremental expense, total company operating profit would have been approximately 100 basis points higher in the quarter. While this event has also negatively impacted our initial growth outlook for the fourth quarter, we continue to work closely with Toys“R”Us to be able to deliver the right products to consumers for a successful holiday season”
You can check out an Infographic summarizing the Third Quarter 2017 Earnings Conference Call, after the jump.
“We have positioned Hasbro to unlock the full potential of our brands, investing significantly across the Brand Blueprint. We are still in the early stages of realizing our ambition. During this quarter we demonstrated our strategy’s ability to deliver growth amid challenging conditions, across a number of dimensions. Revenues grew in each operating segment with double-digit consumer takeaway globally at retail. Franchise Brands, Hasbro Gaming and Emerging Brands revenues increased led by growth in Nerf, Transformers, My Little Pony, Monopoly, Baby Alive, Furreal Friends, Speak Out and Twister. And our investments in our multi-screen content to commerce and omni-channel retail strategies are building deeper consumer engagement across multiple brand experiences as evidenced by the growth in Transformers and My Little Pony.
For the third quarter, Hasbro’s Franchise Brand revenues increased 7%, with growth in NERF, TRANSFORMERS, MY LITTLE PONY and MONOPOLY. Hasbro Gaming increased 22% and Emerging Brands were up 9%.”\
Aimless Misfire
The sky high gas prices during the Gulf War sent the toy prices up. When the gas prices went back down, Hasbro kept the prices going up. And still going & going & going. And production ended up in Vietnam with talk of it moving to India. Now we have shitty QC & I have to repair pretty much every new Transformer I buy. It's all bullshit! (insert jerking off smiley)
Deadend
That has to do with inflation, and was something they were trying to curtail back in 2012 and prior. Which is why we saw such a sharp increase from so many years of trying to keep prices down in spite of inflation. That's an entirely different economics discussion of how costs have been going up, but wages haven't. Which is something Hasbro has to factor into their pricing etc to make sure consumers can still afford the goods they produce.
siccoyote
When I got back into TFs in 2012 I would expect to pay £10.99 for a Deluxe generally. So it's actually OVER a 100% increase in just 5 years.
Deadend
Standing by that would be correct. They are. Net Earnings up 3% shows an increase in profits that can't be argued otherwise. (Net earnings already removes operating costs.) The only people that argue otherwise are trolls that want Hasbro to fail, and if they had their way, they'd drive the company into the ground with bad choices.
The only losses at all reported were from the TRU bankruptcy. Which had nothing to do with Hasbro and impacted all toy manufacturers for this quarter.
TCJJ
You don't have to be an asshat about it.
I still stand by what I said – that they're doing well overall. And, I admit, I don't entirely understand the ins and outs of all these financials, but it seems like a lot of their losses are from things such as the Toys R Us bankruptcy.
And yes, Goldner purposely obfuscated what part(s) of the Transformers brand was succeeding. We all know TLK didn't do well. He's not going to specify something, especially when that something isn't the big blockbuster movie which was meant to do well – the shareholders don't want to hear bad things, and that's ultimately half the point of this to begin with; to tell shareholders the good news and as little of the bad as possible.
MengHao
Critically acclaimed. Lol.
Aimless Misfire
"This fall we continue with new entertainment initiatives to engage our fans."
The only way you're going to engage this fan is by getting the fucking toys in the stores. I don't care about movies, comics or cartoon shows, they're all shit. I'm only in it for the toys, which are never available anymore.
STOP feeding the scalpers!
Deadend
If you browse BBTS often, you see the case revisions. I used to shop there a lot, so I saw them happen often, and recently someone on the board pointed out how fast the Galvatron/Sentinel Prime wave was readjusted.
Well, recently as in when TR first started. xD
It is a little weird, but it also induces demand, which makes retailers order more. Like a sampling platter. Try the different flavors, and then order more of the ones that tasted(sold) best. They also do have to balance it against the fact that the thought is for every autobot sold, a kid may want a decepticon for it to battle against on shelves too. Until they get the sales data back of how many autobots to decepticons sold for how much to meet the demand for sales.
ProtectronPrime
I was unaware that cases were adjusted on the fly like that within a wave. For some weird reason, I thought they only adjusted things each wave. Live and learn!
I still think it's weird that they'd start Cogman at 2 a case though.
Autobot Burnout
Still better than DOTM where characters in the film itself did not get toys.
Deadend
Since he's only just now reaching shelves, marketing data isn't there yet probably. Sales data is how they adjust the cases, and until those start coming in, they can't adjust it. So we'll probably see a case revision in about a month. Right now stores are still working through those initially ordered cases.
That goes back to what you were saying about how long it takes from Hasbro warehouse to store warehouse, to shelf. To then sales data back, and warehouses adjusting/ordering more. It's a lot of little places before we get to store and in our hands, except for the smaller digital outlets (e-shops that don't order as much in bulk as say Walmart or Target or Toys R Us).
ProtectronPrime
Building off this so as to throw everyone off my inability to math, this might be more of the culprit than anything else. If the retail chains aren't sharing the data (or Hasbro isn't asking for it?), then that might account for terrible distribution.
What honestly confuses me is the shortpacking issue of guys like Cogman. This is a dude that was all over TLK, and yet he's 2 to a case? That doesn't make much sense to me – wouldn't kids want the guy that was in all of the movie and not Berserker, who is barely recognizable and literally didn't do anything in the movie whatsoever?
User_120125
I see what you mean. And also, while I was on Linkedin, I just sent a note to the CEO of Hasbro Brian Goldner, and asking him if he and everybody else at Hasbro Studios are really able to bring back "Transformers Robots In Disguise 2015".
Autobot Burnout
We've known for some time that Combiner Force was the end of RID, though.
User_120125
I agree, and also, I was really looking forward to seeing another season of "Transformers Robots In Disguise 2015", right after "Combiner Force".
Deadend
It happens, and you made me have to look stuff up to verify mine, so I made sure to learn something today too.
Like how Net Earnings being up is a good thing, as it already accounts for business operations cost.
ProtectronPrime
At least the toys are nicer in some respects. At least, the ones that aren't just AoE repaints.
AOEGalvatronRox
Honestly, this is what mostly surprised me given the fact that distribution for this toyline has been really shitty since it’s release.
ProtectronPrime
Good point. I was focused more on explaining how profits worked versus revenues and I forgot entirely about the percentages. Very much my error. So much for my maths.