Why has Hasbro (HAS) risen 5.1% since the last earnings report?

IIt’s been about a month since Hasbro’s last earnings report (HAS). Stocks rose about 5.1% during that time, outperforming the S&P 500.

Will the recent positive trend continue until its next earnings release, or is Hasbro likely to suffer a pullback? Before we dive into how investors and analysts have reacted in recent times, let’s take a look at the latest earnings report to better understand the important catalysts.

Hasbro’s third quarter earnings and revenue exceed estimates

Hasbro posted strong results for the third quarter of fiscal 2021, with earnings and revenue exceeding Zacks’ consensus estimate. The bottom line broke the consensus mark for the fifth quarter in a row, while the top line broke the same for the second quarter in a row.

The company reported adjusted earnings of $ 1.96 per share, beating Zacks’ consensus estimate of $ 1.73. In the quarter of the previous year, the company reported adjusted earnings of $ 1.88 per share.

In the quarter under review, net revenues amounted to $ 1,970 million, exceeding the consensus mark of $ 1,957 million. In addition, revenue increased 11% year-on-year.

Brand performance

In the fiscal third quarter, the franchise brand reported revenue of $ 882 million, up 9% year-over-year. The increase was supported by the growth of MAGIC: THE GATHERING, MY LITTLE PONY and TRANSFORMERS.

In the quarter, partner brand revenues fell 10% year-over-year to $ 366.7 million. While the brand saw growth in Hasbro products for the Marvel portfolio, it was more than offset by declines in other properties.

Hasbro Gaming’s revenue was $ 281.9 million, up 18% from levels in the quarter a year earlier. Its total revenue in the games category increased 21% year over year to reach $ 658.6 million. The rise is mainly driven by the growth of tabletop games and digital games including DUNGEONS & DRAGONS, as well as games such as THE GAME OF LIFE, CONNECT 4 and GUESS WHO.

Revenues of emerging brands in the fiscal third quarter increased 15% year-on-year to $ 177.5 million due to product growth in PJ MASKS, PEPPA PIG and GI JOE.

Television / film / entertainment revenues jumped 58% year-on-year to $ 261.9 million. Segment revenues benefited from increased deliveries of scripted, unscripted and animated television and films.

Sector revenues

During the first quarter of fiscal 2021, the company changed its reportable segments to Consumer Products, Wizards of the Coast, and Digital Gaming and Entertainment.

In the fiscal third quarter, net revenues in the consumer products segments fell 3% year-over-year to $ 1,282.7 million. Adjusted operating margin was 16.4% compared to 17.2% in the previous year quarter.

In the quarter under review, Wizards of the Coast and Digital Gaming segment revenues totaled $ 360.2 million, up 32% from the $ 273.4 million reported in the prior year quarter. The segment benefited from the good performances of MAGIC: THE GATHERING and DUNGEONS & DRAGONS as well as licensed digital games. The segment’s adjusted operating margin was 44.3% compared to 51.8% in the same quarter of the previous year.

Entertainment segment revenue increased 76% year-over-year to $ 327.1 million. The segment’s adjusted operating margin was 12.9% compared to (1.9%) reported in the quarter of the previous year.

Highlights of operations

In the fiscal third quarter, Hasbro’s cost of sales (as a percentage of net revenues) was 30.9% compared to 34.3% in the previous year quarter. Selling, distribution and administration expenses – as a percentage of net sales – amounted to 18.4% compared to 18.3% in the previous year quarter.

Balance sheet

Cash and cash equivalents as at September 26, 2021 were $ 1,181.2 million compared to $ 1,132.4 million as at September 27, 2020. At the end of the quarter, inventories stood at $ 544. $ 1 million, up from $ 540 million a year earlier. As at September 26, 2021, long-term debt stood at $ 3,977.4 million, compared to $ 4,777.8 million as of September 27, 2020.

The board of directors of the company announced a dividend of 68 cents per common share. The dividend is payable on November 15, 2021 to shareholders of record at the close of business on November 1.

How have the estimates evolved since then?

It turns out that revised estimates have trended downward over the past month. The consensus estimate has changed by -25.97% due to these changes.

VGM scores

Currently, Hasbro has a good growth score of B, although it is far behind on the Momentum score front with an F. However, the stock received a B rating on the value side, which it place in the second quintile for this investment. strategy.

Overall, the stock has an overall VGM score of B. If you’re not focused on a strategy, this score is the one you should be interested in.

Outlook

Overall, estimates have trended downward for the stock, and the magnitude of these revisions indicates a downward change. Notably, Hasbro has a Zacks Rank # 3 (Hold). We expect the stock to come back online in the coming months.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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