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Hasbro (HAS) Up 2.3% Since Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Hasbro, Inc. (HAS - Free Report) . Shares have added about 2.3% in that time frame, underperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Hasbro Beats on Q4 Earnings, Revenue Estimates
Hasbro posted robust fourth-quarter 2016 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.
Earnings and Revenues Discussion
Earnings of $1.64 per share beat the Zacks Consensus Estimate of $1.28 by 28.1%, and surged nearly 18% year over year (y/y).
Hasbro's net revenue of $1.63 billion also soared 11%. Excluding a negative $11.9 million impact from foreign exchange, revenues were up 12%. Moreover, revenues beat the Zacks Consensus Estimate of $1.51 billion by nearly 8%. Notably, revenues improved in two out of its four product segments category. While Games and Girls segment recorded a gain, revenues declined at Boys and Preschool.
Hasbro's cost of sales ratio increased 100 basis points (bps) to 38.9%. Meanwhile, selling, distribution and administration expenses rose 180 bps and royalty expense ratio declined 190 bps. Operating profit grew almost 16% y/yto $255.2 million, due to higher revenues.
Behind the Headline Numbers
Revenues at the Games and Girls category witnessed a year-over-year growth of 11% and 52%, respectively. Meanwhile, the Preschool and the Boys category revenues deteriorated 4% and 3%, respectively, in the fourth quarter. Notably, before this, the Boys category had posted revenue growth for eleven consecutive quarters.
2016 Results
Hasbro’s full-year adjusted earnings of $4.46 surpassed the Zacks Consensus Estimate of $4.11 by 8.5%. In addition, it increased 27.1% from the year-ago quarter figure of $3.51. The upside reflects an increase in revenues.
Full-year revenues of $5.02 billion came above the Zacks Consensus Estimate of $4.89 billion by 2.7% and increased 13% year over year.
2016 Revenue Breakdown by Product Segments Category & Regionally
In 2016, the Boys category posted revenues of $1.85 billion, up 4% y/y, bolstered by improvement in the Nerf brand as well as increased shipments of the Yokai Watch brand.
Preschool revenues declined 1% to $589.2 million, as weakness in Playskool Heroes and core Playskool itemsmore than offset the growth in Play-Doh brand.
Games revenues inched up 9% to $1.39 billion as Hasbro’s differentiated gaming portfolio drove growth across multiple gaming formats including face-to-face gaming, off-the-board gaming and digital gaming.
The Girls category recorded a 50% year-over-year rise in revenues to a record $1.19 billion. Notably, this segment witnessed growth in each of the four quarters in 2016, thereby marking a turnaround after the five consecutive quarterly declines, previously. Growth was mainly driven by Hasbro’s Disney Princess and Disney’s Frozen fashion and small dolls, and Dreamworks’ Trolls. Additionally, Baby Alive, Furreal Friends and Easy-Bake Oven brands too supported sales in the year.
Regionally, full-year 2016 net revenue from the U.S. and Canada segment soared 15% to $2.56 billion, supported by growth in the Girls, Games and Boys categories. But the net revenues were partly offset by the dip in Preschool revenues. The segment reported operating profit of $522.3 million, reflecting a surge of 21% y/y.
International revenues were $2.19 billion, up 11% y/y supported by growth in all the four product categories: Boys, Girls, Games and Preschool. Increase in sales were registered in Europe, Latin America, Asia Pacific and Emerging markets. International operating profit was $294.5 million, up 15% from a year ago.
Entertainment and licensing segment revenues improved 8% y/yto $265.2 million, on the back of growth in Consumer Products and Digital Gaming, as well as the addition of Boulder Media. However, the segment's operating profit decreased 35% to $49.9 million.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimate. There has been one revision lower for the current quarter. While looking back an additional 30 days, we can see even more downward momentum. There has been one move higher compared to two lower two months ago.
At this time, Hasbro's stock has a great Growth Score of 'A', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than value investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.
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Hasbro (HAS) Up 2.3% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Hasbro, Inc. (HAS - Free Report) . Shares have added about 2.3% in that time frame, underperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Hasbro Beats on Q4 Earnings, Revenue Estimates
Hasbro posted robust fourth-quarter 2016 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.
Earnings and Revenues Discussion
Earnings of $1.64 per share beat the Zacks Consensus Estimate of $1.28 by 28.1%, and surged nearly 18% year over year (y/y).
Hasbro's net revenue of $1.63 billion also soared 11%. Excluding a negative $11.9 million impact from foreign exchange, revenues were up 12%. Moreover, revenues beat the Zacks Consensus Estimate of $1.51 billion by nearly 8%. Notably, revenues improved in two out of its four product segments category. While Games and Girls segment recorded a gain, revenues declined at Boys and Preschool.
Hasbro's cost of sales ratio increased 100 basis points (bps) to 38.9%. Meanwhile, selling, distribution and administration expenses rose 180 bps and royalty expense ratio declined 190 bps. Operating profit grew almost 16% y/yto $255.2 million, due to higher revenues.
Behind the Headline Numbers
Revenues at the Games and Girls category witnessed a year-over-year growth of 11% and 52%, respectively. Meanwhile, the Preschool and the Boys category revenues deteriorated 4% and 3%, respectively, in the fourth quarter. Notably, before this, the Boys category had posted revenue growth for eleven consecutive quarters.
2016 Results
Hasbro’s full-year adjusted earnings of $4.46 surpassed the Zacks Consensus Estimate of $4.11 by 8.5%. In addition, it increased 27.1% from the year-ago quarter figure of $3.51. The upside reflects an increase in revenues.
Full-year revenues of $5.02 billion came above the Zacks Consensus Estimate of $4.89 billion by 2.7% and increased 13% year over year.
2016 Revenue Breakdown by Product Segments Category & Regionally
In 2016, the Boys category posted revenues of $1.85 billion, up 4% y/y, bolstered by improvement in the Nerf brand as well as increased shipments of the Yokai Watch brand.
Preschool revenues declined 1% to $589.2 million, as weakness in Playskool Heroes and core Playskool itemsmore than offset the growth in Play-Doh brand.
Games revenues inched up 9% to $1.39 billion as Hasbro’s differentiated gaming portfolio drove growth across multiple gaming formats including face-to-face gaming, off-the-board gaming and digital gaming.
The Girls category recorded a 50% year-over-year rise in revenues to a record $1.19 billion. Notably, this segment witnessed growth in each of the four quarters in 2016, thereby marking a turnaround after the five consecutive quarterly declines, previously. Growth was mainly driven by Hasbro’s Disney Princess and Disney’s Frozen fashion and small dolls, and Dreamworks’ Trolls. Additionally, Baby Alive, Furreal Friends and Easy-Bake Oven brands too supported sales in the year.
Regionally, full-year 2016 net revenue from the U.S. and Canada segment soared 15% to $2.56 billion, supported by growth in the Girls, Games and Boys categories. But the net revenues were partly offset by the dip in Preschool revenues. The segment reported operating profit of $522.3 million, reflecting a surge of 21% y/y.
International revenues were $2.19 billion, up 11% y/y supported by growth in all the four product categories: Boys, Girls, Games and Preschool. Increase in sales were registered in Europe, Latin America, Asia Pacific and Emerging markets. International operating profit was $294.5 million, up 15% from a year ago.
Entertainment and licensing segment revenues improved 8% y/yto $265.2 million, on the back of growth in Consumer Products and Digital Gaming, as well as the addition of Boulder Media. However, the segment's operating profit decreased 35% to $49.9 million.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimate. There has been one revision lower for the current quarter. While looking back an additional 30 days, we can see even more downward momentum. There has been one move higher compared to two lower two months ago.
Hasbro, Inc. Price and Consensus
Hasbro, Inc. Price and Consensus | Hasbro, Inc. Quote
VGM Scores
At this time, Hasbro's stock has a great Growth Score of 'A', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for growth investors than value investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #2 (Buy). We are expecting an above average return from the stock in the next few months.