Hasbro CEO says '2018 was a very disruptive year'
"2018 was a very disruptive year, driven by the bankruptcy and liquidation of Toys"R"Us across most of the world and a rapidly shifting consumer and retail landscape," said Brian Goldner, Hasbro's chairman and CEO. "During 2018, we diversified our retailer base, meaningfully lowered retailer inventories and delivered innovative new offerings to our global consumers. We were not, however, able to recapture as much of the Toys"R"Us business during the holiday period as we anticipated as the effect of its liquidated inventory in the market was more impactful than we and industry experts expected. It is an unprecedented yet finite event. In addition, as we discussed throughout the year, our European shipments declined as the teams successfully lowered retailer inventories amidst a declining toy and game market." "Throughout 2018, we engaged in several major innovation initiatives and initiated significant organizational changes to enable us to stabilize our European business in 2019 and return Hasbro to profitable growth this year," continued Goldner. "In 2019 we are entering the next innovation cycle for NERF and we will deliver break frame innovation across price points in the market this year. Hasbro's POWER RANGERS line will hit the market in the second quarter, setting the stage for an all new era for this iconic brand. We are positioned to advance our gaming leadership, leveraging our investments, social relevance, innovative game play and the industry's broadest games portfolio, including the launch of our digital game Magic: The Gathering Arena. We will deliver all new play experiences in support of a raft of compelling entertainment properties, including Marvel Studios' Captain Marvel and Avengers: Endgame, Columbia Pictures' Spider-Man: Far From Home, Disney Animation's Frozen 2 and Lucasfilm's Star Wars: Episode IX. Finally, to successfully deliver these and numerous other initiatives, we've re-imagined and re-designed our go-to-market strategy globally supported by compelling, digital-first marketing programs for our consumers and retailers." "Despite the challenging year, Hasbro remains in a strong financial position with the ability to continue investing to drive profitable long-term growth and raise our quarterly dividend 8% in 2019," said Deborah Thomas, Hasbro's chief financial officer. "Given the rapid change in our business, our global teams are focused on identifying incremental opportunities to deliver top and bottom line returns. Investments to drive top line growth include the acquisition of POWER RANGERS, storytelling such as Bumblebee and new growth drivers including Magic: The Gathering Arena and the associated MAGIC esports initiatives. We've also undertaken important operational programs-investing in the geographic diversification of our manufacturing locations and a new Midwest U.S. warehouse opening in 2019. In addition, the organizational actions we outlined are now expected to deliver $50 to $55 million in net pre-tax savings in 2019."