NEW YORK – Hasbro Inc. (HAS), the No. 2 U.S. toymaker, Friday said second-quarter earnings rose less than expected, hurt by weak sales of its Beyblade battling-top toys.
Pawtucket, R.I.-based Hasbro, which also makes GI Joe and the Easy-Bake oven (search), posted net income of $18.8 million, or 6 cents per share, up from $11.4 million, or 6 cents per share, a year earlier.
Analysts, on average, had expected profit of 8 cents per share, according to Reuters Estimates.
Chief Executive Alfred Verrecchia said in a statement he was confident Hasbro could meet its full-year goal of increased revenue and earnings, despite an uncertain retail environment and an expected decline from Beyblade.
"We believe that it will be difficult for Hasbro to enjoy meaningful top-line growth in (2004) with large declines in these product lines. Hasbro faces a very tough 18 percent revenue comparison" in the third quarter, Banc of Americas Securities analyst Gary Cooper said in a research note.
The U.S. toy-selling environment has been weak, as cut-throat price competition and slowing sales have pushed retailers like KB Toys (search) and FAO Schwarz (search) into bankruptcy. Toys R Us Inc. (TOY), the No. 2 toy seller, is evaluating its operations and analysts expect it to close some stores.
Hasbro has been a strong performer in recent quarters as it benefited from a restructuring, but it may not be able to keep up the momentum.
Revenue for the second quarter fell to $516.4 million from $581.5 million a year ago. Revenue included a benefit of $8.0 million from the weak dollar, which raises the value of overseas sales when they are converted into dollars.
Revenue in the U.S. Toys segment, which includes products like My Little Pony (search) and Transformers, was $167.2 million, compared with $208.4 million a year ago, reflecting an overall softness in the boys business, including a decline of $34 million in Beyblade.
International revenue slipped to $179.2 million from $203.8 million a year ago, also hurt by weak Beyblade performance.
Revenue in Hasbro's games business, which includes Candyland and Monopoly, rose to $161.6 million from $148.6 million. The segment was helped by trading card games like Duel Masters, launched in March.
Hasbro said it is planning more new product launches in the second half of this year, compared with 2003, including a color version of its handheld video player VideoNow, Lazer Tag, and is bringing back the wobbling Weebles figures.