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Costs eat into Hasbro profits
Source: Agencies |
July 19, 2011, Tuesday
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Print Edition
Print Edition
HASBRO Inc, maker of Nerf foam toys and Transformers action figures, promised investors a "meaningful" rise in 2011 sales and earnings, despite missing profit estimates in the second quarter on higher costs.
The news came just days after larger rival Mattel Inc beat quarterly profit and sales estimates on strong sales of its Barbie dolls and toys based on the "Cars 2" movie. Hasbro shares were down 0.3 percent at US$41.25 in premarket trading yesterday.
Hasbro has been spending more in recent quarters to boost its overseas presence and develop its new television channel, The Hub. It is also battling rising costs of plastics, packaging paper, freight and labor.
The company is counting on its overseas investments and strong product lineup heading into the key holiday selling season to help boost revenue and sales in 2011.
This year, Hasbro began marketing toys based on movies such as "Transformers: Dark of the Moon" and "Thor." It is also making products based on "Captain America: the First Avenger," which is set to hit US theaters this week.
In the third quarter, the company will introduce its new Kre-O construction brand internationally and add Sesame Street-branded toys to its preschool business.
In the second quarter, Hasbro's net profit rose to US$58.1 million, from US$43.6 million, a year earlier.
During the same period net revenue rose 23 percent to US$908.5 million, beating the analysts' average estimate of US$854.8 million.
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