Hasbro, the nation's number two toymaker, posted its first quarter results today, which were largely in line with analysts' expectations, but Hasbro's stock price declined by almost 4% with investors worried about the unsettled conditions among the leading toy retailers and declines in sales of key Hasbro brands Trivial Pursuit and Beyblades. Still the toy giant posted a strong boost in profits for the traditionally slow first quarter with 2004 earnings of $6.5 million versus just $1.2 million in 2003.
Wizards of the Coast led the charge to profitability with a 14% increase in sales ($127.6 million versus $112.2 million in Q1 '03). Magic: the Gathering sales were up a solid 16% for the quarter and Hasbro CEO Alfred Verrecchia characterized WotC's new Duel Masters TCG, which launched late in the quarter, as 'a significant contributor.' Hasbro took an $8 million dollar charge for the quarter associated with the closing of the WotC retail stores (see 'WotC Ankles Retail'), but by eliminating the stores Hasbro staunched an open financial wound, which according to CFO David Hargreaves, bled an average of $20 million per year over the past few years.
Sales of the high tech Beyblade tops, which accounted for some $325 million in 2003, declined in Q1 (as Hasbro expected) as did sales of the Twentieth Anniversary Edition of Trivial Pursuit, which has had a strong run over the past two years. If the news for the Beyblade franchise is less than stellar, other toy properties continue to do well. Sales of Transformers toys were up a significant 21% for the quarter. As is typical with toy companies, Hasbro expects the majority of its growth in sales and profitability to occur during the second half of 2004.