Hasbro: Won't Grow 1Q Revenue Given Forex, Inventory Pressures
February 13 2009 - 9:36AM
Dow Jones News
Hasbro Inc. (HAS) doesn't expect first-quarter revenue growth,
given the year-over-year negative impact of foreign exchange and
anticipated efforts by retailers to rebalance inventories, company
executives said during a presentation to analysts Friday.
Asked if there was any reason to believe first-quarter earnings
won't be down by a greater percentage than revenue given the
leverage inherent in the toy business, Chief Financial Officer
David Hargreaves said there wasn't. He didn't elaborate.
President and Chief Executive Brian Goldner, however, reiterated
the toy maker's expectation it can grow full-year revenue and
per-share earnings "absent material deterioration in economic
conditions or the value of foreign currencies."
Hargreaves said Hasbro assumes additional retailers will go bust
and that unemployment may rise. But if the global economy contracts
by 3% to 5% more than the current consensus, it would make revenue
growth difficult for the full year, he said.
The company's outlook is also based on benchmarks of $1.30 for
the Euro and $1.50 for pounds Sterling, he added.
While Hasbro was pleased with its inventory reduction actions in
the fourth quarter and so far in the first, more pressure could
come in 2009. "Given the state of retailing and negative consumer
sentiment, it is highly likely that retailers will move quickly to
adjust inventories to a lower level," Hargreaves said.
Hasbro said it plans to lower capital expenditures this year,
and its pension plan won't require additional funding in 2009.
-By Mary Ellen Lloyd, Dow Jones Newswires, 704-948-9145;
maryellen.lloyd@dowjones.com