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Hasbro (NYSE: HAS), a toymaker that competes with Mattel (NYSE: MAT) and JAKKS Pacific (NASDAQ: JAKK), reported results for the first quarter on Monday. They weren't that spectacular. No big earnings beat here. Net sales were down 6%, even excluding the effect of currency translation. Net income dropped 44% to $0.14 per share. According to this source, that number unfortunately merely met Wall Street expectations.
Of course, I suppose things could have been worse. Hasbro could have missed expectations by a mile. In this kind of economy, we probably should be glad that a company whose products can easily be cut from any discretionary family budget at least was able to keep up with prevailing wisdom.
Nevertheless, this was a tough quarter. Looking at the stock at the time of this writing, I see that it is off by well over 3% in afternoon trading. In a relative sense, that's not too bad, given how bad the overall markets are today. And volume isn't too heavy by my estimation.
I recently wrote an article about Hasbro and its potential as an investment/trading idea ahead of the next Transformers film, due out from Viacom (NYSE: VIA) this summer. The earnings release also mentions that Hasbro may benefit from toys based on Marvel's (NYSE: MVL) X-Men Origins: Wolverine, which will be distributed by News Corp. (NASDAQ: NWS). And don't forget G.I. Joe, which will be arriving in August, also from Viacom.
Will these merchandise lines be hits in a down economy? Well, the box office has been doing well lately, so I think there's a chance that the movies will do great business and that such success will transfer over to retail. Nothing's guaranteed, though. Long-term shareholders don't need to do any selling today, in my opinion at least. The Hasbro story hasn't dramatically shifted or anything like that. Traders can certainly continue to look at Hasbro as a potential vehicle ahead of the summer movies (although the final decision to buy rests with the individual after much due diligence).
Disclosure: I don't own any company mentioned; positions can change without notice.
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