Hasbro Reports Third Quarter 2019 Financial Results
Hasbro, Inc. (NASDAQ: HAS), a global play and entertainment company, today reported financial results for the third quarter 2019. Net revenues for the third quarter 2019 were $1.58 billion versus $1.57 billion in 2018. Absent a negative $20.5 million impact of foreign exchange, third quarter 2019 revenues grew 2%.
During the third quarter 2019, Hasbro entered into a definitive agreement to acquire Entertainment One Ltd. (eOne) in an all-cash transaction valued at approximately £3.3 billion. As a result of hedging part of the British Pound purchase price of eOne, Hasbro recognized an after-tax foreign exchange loss of $20.9 million after-tax charge, or $0.16 per diluted share. Third quarter 2018 net earnings include a favorable $17.3 million, or $0.14 per diluted share, tax benefit from U.S. tax reform. Including these items in both periods, net earnings for the third quarter 2019 decreased to $212.9 million, or $1.67 per diluted share, versus $263.9 million, or $2.06 per diluted share, for the third quarter of 2018. Excluding the charges, third quarter 2019 adjusted net earnings decreased to $233.8 million, or $1.84 per diluted share compared to third quarter 2018 adjusted net earnings of $246.5 million, or $1.93 per diluted share.
“Hasbro remains on track to deliver profitable revenue growth in 2019, behind innovation in gaming, toys and around Hasbro's Brand Blueprint. However, as we've communicated, the threat and enactment of tariffs reduced revenues in the third quarter and increased expenses to deliver product to retail," said Brian Goldner, Hasbro’s chairman and chief executive officer. "The team drove continued growth in the Wizards of the Coast gaming brands, MAGIC: THE GATHERING and DUNGEONS & DRAGONS, and delivered significant new holiday initiatives. To start the fourth quarter, we are seeing a strong consumer response to the global launch of Hasbro's line for Disney's Frozen 2 and Star Wars: The Rise of Skywalker as well as the U.S. launch of the new NERF Ultra."
"In addition, we are pleased with the progress toward completing our acquisition of eOne, including last week's overwhelming approval by eOne shareholders. We expect to close the transaction during the fourth quarter," continued Goldner. "The strategic opportunity to bring onboard the brands, capabilities and talent from eOne is compelling to our long-term prospects as a leading global play and entertainment company and we look forward to sharing more about our plans after the close."