Hasbro Inc. (HAS) reported a 16% decline in revenues to $716.3 million for the first quarter of 2018, due to the liquidation of Toys R Us in the US and UK and the retail inventory overhang in Europe.
The company posted a net loss for the quarter, on a reported basis, of $112.5 million or $0.90 per diluted share compared to a profit in the prior-year quarter. The net loss reflects expenses associated with Toys R Us, Hasbro’s ongoing commercial organization transformation, and the U.S. tax reform.
Excluding these expenses, earnings came in at $12.4 million or $0.10 per diluted share on an adjusted basis.
Both revenues and adjusted EPS missed analyst expectations. Shares fell during premarket trading.
US and Canada segment revenues slid 19% to $364.3 million while International segment revenues lowered to $287.9 million from $345.3 million last year. Revenues in Europe dropped 28% while in Latin America and the Asia Pacific, revenues increased 2% and 3% respectively. Emerging markets revenue fell 5%.
Entertainment and Licensing segment revenues grew 21% versus last year driven by consumer products and digital gaming.
Revenues across all brand portfolios were negatively impacted in the quarter by the Toys R Us liquidation and the retail inventory overhang in Europe.
Franchise Brand revenues fell 19% while Hasbro Gaming revenue declined 22%. Both Emerging Brands and Partner Brands revenues dropped 6% during Q1 2018 compared to the prior-year quarter. Hasbro’s total gaming category fell 20%. Growth in brands such as Monopoly, Marvel, Dungeons and Dragons, Jenga and Littlest Pet Shop were all offset by declines in other brands.
Hasbro expects challenges to continue in 2018 but remains optimistic about achieving growth by 2019.