Hasbro reported sales of $2.8 billion for 2002 and a loss of $171 million, compared to sales of $2.9 billion and a profit of $60 million in 2002. But these results mask some good news for Hasbro, including net earnings of $107 million excluding non-recurring items (primarily good will impairment) vs. 2001 net earnings of $72 million calculated similarly, and sales increases in toys for the year and in games for Q4. Fourth quarter sales over-all were up, $997 million vs. $989 million last year.
Toy segment revenues were $997 million for the year and $289 million in Q4, up 7% and 2%, respectively, vs. the year ago numbers. Operating profit in the segment was $76 million, up from $16 million last year. G. I. Joe, Transformers, and Beyblades were among the lines credited for the improvement.
Game segment revenues were $750 million for the year and $269 million in Q4, down 8% and 6%, respectively, vs. 2001 numbers. The decrease was attributed to the decline in licensed trading card games (Pokemon) and electronic games. Operating profit in games was $125 million vs. $156 million last year.
International revenue and profits were down vs. last year, for the same reasons as the game segment. Transformers and Magic: The Gathering sales were credited as bright spots outside of the U.S..
In the company conference call, CEO Alan Hassenfeld told analysts that Hasbro plans to decrease its reliance on licensed brands and focus on its core brands (including Magic) in the coming years. He also said that Star Wars royalties will decline in 2003 from the ouch-level $296 million paid in 2002 (Hasbro renegotiated its Star Wars deal recently, see 'Hasbro Renegotiates, Extends Star Wars License'). The company also expects to reduce expenses another $100 million over the next two years, with $80 million of those in 2003.