In the fourth quarter, ending December 26, revenue climbed 17% compared with the year-earlier period to reach $2 billion. Analysts had been expecting a shade less than $1.9 billion. Earnings of $1.21 per share on an adjusted basis far surpassed estimates of 88 cents.
Despite the glowing quarterly report, the company’s stock has shed 1% today to about $93 a share after executives warned of rising costs for shipping and raw materials. For 2022, they expect the squeeze to keep revenue growth in the low-single digits.
In addition to coping with the pandemic and supply-chain issues, the company has been working through a significant management transition. Brian Goldner, who had been CEO since 2008, spearheading Hasbro’s entertainment push with franchise properties like Transformers and G.I. Joe, died last October. Chris Cocks, who has been head of Hasbro’s digital gaming division, will become CEO on February 25.
During a conference call with analysts, CFO Deborah Thomas was asked about the outlook for Hasbro’s 40% stake in Discovery Family Channel given the evolution of the pay-TV business. The company reported a $54 million net loss on the investment in the quarter.
In 2009, Hasbro paid $300 million to enter a joint venture with Discovery for a kids-focused network initially called The Hub. In 2014, it rebranded as Discovery Family Channel and has been lucrative, Thomas said, despite timing issues and accounting rules periodically resulting in losses. While she didn’t definitively say the stake would be unloaded, she spoke about it in a fairly valedictory tone.
“It was a great investment for us,” she said. “It allowed us to get our programming on the air and really drove the beginning of the brand blueprint strategy.”
Thanks to properties like My Little Pony, which thrived on the cable network and then transitioned to Netflix, the company has made more than $1 billion in revenue from the venture, Thomas added. “There are just changes happening in the cable industry … more people are moving to streaming and different things.”