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Hasbro Q1 Net Income Jumps 41% on 2% Revenue Gain image

Hasbro Q1 Net Income Jumps 41% on 2% Revenue Gain

Hasbro Q1 posted a 2% gain for Q1 ended March 31 as it sold off excess inventory partly tied to entertainment properties and benefitted from strong sales of toys tied to the Disney Princess and Frozen licenses, company executives told analysts.

Net income jumped 41% to $68.6 million as revenue rose 2% to $849.7 million, including a 24% gain in its entertainment and licensing business sector to $52.7 million.

The company ended Q1 with a 10% decline in inventory from a year earlier to $416 million. Hasbro’s inventory drop contrasts with recent reports from Mattel and Toys R Us.

Sales of Star Wars products in the quarter benefitted from the introduction of new titanium Black Series figures. It also has an “early bird” package set for May featuring a six-inch Black Series Darth Vader figure that’s designed to mark the 40th anniversary of Kenner Corp.’s famed IOU certificate program.

“We will continue to take advantage of marketing windows to move through inventory,” Hasbro’s Brian Goldner said.

Hasbro’s increase in Q1 entertainment and licensing revenue was driven by digital gaming, including higher sales from Hasbro developer/publisher Backflip Studios as well as from third-party mobile game publishers including Electronic Arts (Scrabble, Monopoly, Boggle, Risk). Hasbro’s entertainment licensing operating profit rose 108% to $11.3 million.

Meanwhile, Hasbro sales of licensed brands fell 18% to $213 million as gains with BeyBlade and Trolls-related products were offset by anticipated declines in items tied to the Star Wars and Marvel properties, Hasbro said.

Hasbro expects its Star Wars and Marvel business in Q2 to begin to reflect the promotional buildup toward new theatrical releases. Disney/Lucas is releasing Star Wars: Forces of Destiny animated shorts in July on YouTube, and will unveil the theatrical feature Star Wars: The Last Jedi in December. Marvel has a series of films this year, beginning with Guardians of the Galaxy 2 on May 5.

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