Hasbro’s brand initiatives for the 2013 holiday shopping season are resonating with consumers and retailers globally as the company saw revenues and earnings grow in the third quarter.
The company’s net revenues for the third quarter increased 2% to $1.37 billion, compared to $1.35 billion in 2012. Adjusted to exclude pre-tax restructuring and other charges, net earnings for the quarter increased 5% to $172.5 million, or $1.31 per diluted share, versus $164.9 million, or $1.24 per diluted share, in 2012.
“In addition to our innovative holiday launches, our expanded presence in faster growing geographies is delivering growth, including emerging markets growth of 22% in the third quarter,” said president and CEO Brian Goldner. “We’ve also streamlined our organization and focused on the opportunities within our franchise and partner brand portfolio which offer the greatest long-term potential across our global brand blueprint. These strategic steps are increasingly important as we continue to operate in a challenging consumer environment in developed economies.”
U.S. and Canada segment net revenues were $735.6 million compared to $774.5 million in 2012. The results reflect growth in the girls category and a flat games category offset by declines in the boys and preschool categories. The U.S. and Canada segment reported operating profit of $147 million compared to $154.2 million in 2012.
International segment net revenues increased 11% to $582.7 million compared to $524.1 million in 2012. Revenues in Europe, Latin America and Asia Pacific grew in the quarter, including 22% growth in emerging markets. Additionally, the games, girls and preschool categories were up in the third quarter. The international segment reported 24% operating profit growth to $105.7 million compared to $85.5 million in 2012.
Entertainment and licensing segment net revenues increased 13% to $48.6 million compared to $43.1 million in 2012, primarily driven by higher entertainment revenues as well as the addition of Backflip Studios to the segment. The entertainment and licensing segment reported operating profit of $7.6 million compared to $10.7 million in 2012. Segment profitability was impacted by the acquisition of Backflip Studios in July 2013.
For the third quarter 2013, net revenues in the boys category decreased 17% to $392 million. Transformers and Star Wars revenues grew in the quarter; however, several brands, including Marvel and Beyblade, continued to face difficult comparisons with 2012.
The games category posted its fourth consecutive quarter of growth, increasing revenues 6% in the third quarter 2013 versus last year. Magic: The Gathering, Jenga, the Elefun & Friends Collection and the launch of the new Telepods Gaming Platform, featuring the Angry Birds Star Wars Ii Game, were among the brands which posted higher revenues in the quarter.
The girls category posted its fifth straight quarter of growth, increasing 29% in the third quarter. Furby, My Little Pony, including the highly successful launch of My Little Pony Equestria Girls, and the launch of Nerf Rebelle contributed to the continued growth in the girls category.
The preschool category declined 2% in the quarter despite growth in Play-Doh, Sesame Street and Transformers Rescue Bots products.