Hasbro (HAS, Financial) is all set to present its fourth quarter 2014 results before the market opens on Feb. 8, 2015 which posted negative surprises for three preceding years in a row. While in the previous year, the negative surprise percentage was 0.68%. In an average, the negative surprise percentage has been 3.74% for four consecutive quarters. Analysts are still hopeful that tables could turn.
Investing legend Peter Lynch has unleashed positive words for Hasbro which, he thinks, is a fertile investment field for the years to come. The renowned toymaker has always been influencing the childhood of several generations and it will successfully tide over the troubled waters as well. In retrospect, it has given a severe competition to the share prices of its rival Mattel (MAT, Financial) in 2014 by holding the ground strong. Now that the company is all set to announce its fourth-quarter financial results on Monday, the board will also undergo some changes as the current CEO takes on the dual role as board chairman. Shareholders have laid all their positive hopes on Brian Goldner, who they believe will help push up the sales figure of Hasbro in 2015 and prove itself to be a lucrative year altogether.
What the analysts has to say
Analysts have given mixed reaction by cutting the estimates for the current quarter by $0.08 per share and cutting projections for the full year 2015 by between 2% and 3%. The stocks only reported a 2% decline since the end of October except for reporting a high which prompted the investors cut back their views in Hasbro earnings in recent months.
On the flip side, to say the brighter one, Hasbro’s third-quarter earnings reflected that it took the Mattel shares off guard and went up a notch. Antagonizing with the down toward Mattel sales, Hasbro posted a 7% gain in revenue, driven by 22% growth in the boy’s toy division. What strained more nerves to bring more profit in Hasbro’s platter are the attractiveness of the Nerf brand to girls through the Rebelle line of toys and grabbing a huge part of licensing deals for products associated to Marvel, Star Wars and Transformers characters.
Issues that will push up Hasbro’s stock prices
Although investors are little wary of the long-term stagnation in toy sales growth, the success of Disney’s (DIS, Financial) Frozen helped the industry snub the droop somewhat in view of the overall retail sales climbing 4%, as the research firm NPD Group hints at. Hasbro’s preschool sales had been somewhat cold-shouldered amid rising demand for building sets, action figures, puzzles and board games resulting in decelerating preschool sales figures.
During the holiday quarter, Mattel’s results were poor, too, making way for Hasbro to overcome industry hindrances. Mattel’s Barbie, Fisher-Price and American Girl brands have suffered 6% lower sales world-wide which prepares Mattel for fight back hard and thus give a fitting competition to Hasbro. It could hurt both the companies on them being at loggerheads, analysts believe.
Final word
The Monday’s earnings report will be mirror the 2015 market scene, whether it will keep outweighing Mattel. It has to demonstrate its competitive advantage so as not to be disillusioned. Let’s hope that holiday results don’t fall short of expectations and in the long haul, Hasbro uses every opportune moment to push up the growth and leave the investors impressed.
