Toy maker Hasbro has reported net earnings for the full-year 2017 of $396.6m compared to $551.4m in 2016 as overall consumer demand slowed in November and December both for the industry and for Hasbro.
Net revenues for the full-year 2017 increased 4% to $5.21bn versus $5.02bn in 2016. This includes a favourable $79.2m impact from foreign exchange.
Adjusted 2017 net earnings were $693.1m, or $5.46 per diluted share, excluding a $296.5m impact from US tax reform. This compared to $566.1m, or $4.46 per diluted share, in 2016 that excluded a post-tax $14.7m non-cash fourth quarter 2016 goodwill impairment charge related to Backflip Studios.
Fourth Quarter net revenues decreased 2% to $1.60bn, including a favourable $44.3m impact of foreign exchange.
In a statement, the company said that given the significant complexities associated with the changes in the US tax code, the estimated financial impact for the fourth-quarter and full year 2017 are provisional and subject to further analysis that could result in changes to this estimate during 2018 as further guidance is issued.
Brian Goldner, Hasbro’s chairman and chief executive officer, said: “Our strong performance ranked Hasbro #1 across the G11 markets for the full-year 2017. In the fourth quarter, HasbroFranchise Brand revenues increased 11%. However, overall consumer demand slowed in November and December both for the industry and for Hasbro.
“A decline in Partner Brands and Europe revenues resulted in us not meeting our fourth quarter revenue expectations. Looking ahead, our innovative lines are supported by robust storytelling and digital initiatives that position us well for 2018 and beyond.”
Deborah Thomas, Hasbro’s chief financial officer, added: “Over the past five years, we added over $1bn in revenues to our top line, growing revenues four consecutive years, while meaningfully increasing operating profit, net earnings and generating significant cash flow.
“Hasbro is in a strong financial position with the cash and profitability to invest in growing our business for the long term. Our team’s excellent job of understanding and assessing the global tax environment and managing associated risks contributed to strong underlying net earnings growth.
"In addition, our 2017 year-end results include an estimate for the expense associated with US tax reform. We expect an on-going benefit to our tax rate in future periods and will discuss this further at our Toy Fair Investor Event.”