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Mar 29, 2020
Hasbro Q1 2020 Earnings Report
Hasbro's performance was impacted by COVID-19 and the eOne acquisition.
Key Takeaways
Hasbro reported a net loss for Q1 2020, but saw strong demand for Hasbro products, particularly in gaming. The company is managing the impact of COVID-19, including supply chain disruptions and store closures, while integrating eOne.
Completed acquisition of Entertainment One Ltd. (eOne) in early fiscal 2020
First quarter 2020 revenues for the combined company were $1.11 billion, with strong demand for Hasbro products, notably in gaming.
Supply chain is positioned to meet full-year product demand requirements leveraging growing retailer channels, including ecomm and omni-channel
Substantial liquidity and access to cash, including quarter ending cash of $1.2 billion; operating cash flow of $291.6 million; and availability of $1.5 billion under revolving credit facility
Hasbro
Hasbro
Hasbro Revenue by Geographic Location
Revenue by Geographic Location
Europe Revenue
CapyFin.comAsia Pacific Revenue
CapyFin.comLatin America Revenue
CapyFin.com Forward Guidance
Hasbro expects the second quarter to be more challenging than the first quarter of the year with revenues and earnings down versus pro forma 2019 due to COVID-19. They are taking prudent steps to lower expenses and preserve capital while positioning to meet the seasonal peak demand periods of the business in the second half of the year, including the holiday season. While the ultimate impact of COVID-19 will vary depending on how long it takes to reopen markets around the world, they are currently seeing healthy demand for their products and content.
Positive Outlook
- China factories are currently operating at planned capacity for this time of year.
- The global Hasbro team is utilizing its diverse global supply chain to meet demand from open facilities and existing inventory.
- Hasbro brands are resonating as people spend more time at home, including games for families to play together and PLAY-DOH as kids engage in more creative play.
- Ecomm revenues increased double digits in the first quarter, with meaningful point of sale gains.
- Content viewership is high which bodes well for long-term brand engagement
Challenges Ahead
- Manufacturing and warehouse partners outside of China are operating at varying levels of productivity depending on local government and safety considerations.
- Global store closures increased toward the end of the first quarter, and are expected to more negatively impact the second quarter results than during the first quarter.
- Production and delivery of television and film projects for Hasbro's eOne TV and Film business have been delayed, negatively impacting the level and timing of revenues.
- Several film release dates have moved to later in 2020, into 2021 and in some instances are going straight to video on demand/EST windows impacting the timing and level of anticipated revenues.
- Due to the uncertainty related to COVID-19, the Company is withdrawing its 2020 Outlook issued at its Toy Fair presentation on February 21, 2020.
Revenue & Expenses
Visualization of income flow from segment revenue to net income