Like Mattel, Hasbro Boosts Prices In 1Q To Recoup Costs
09 Febbraio 2009 - 4:16PM
Dow Jones News
Hasbro Inc. (HAS) said it began implementing a price increase
Feb. 1 to cover increased costs on such things as paperboard
packaging materials and labor rates in China.
During a conference call to discuss fourth-quarter results,
Hasbro Chief Financial Officer and Operating Chief David D. R.
Hargreaves said the world's second-largest toy maker is increasing
prices by mid-single-digit percentages to make up for higher
costs.
"There's a lot of pressures on vendors," he said.
Mattel Corp. (MAT), the largest toy maker, last week said it
boosted prices Jan. 1 by mid-single-digit percentages due to higher
costs.
Hasbro said costs for resins and related products may have gone
down, but they represent a smaller portion of commodity costs than
paperboard and printing, which are more expensive. Minimum labor
rates and testing-safety costs in China were also higher at the end
of 2008 than in 2007, and working capital costs for vendors have
increased due to the tight credit markets, executives said.
Earlier Monday, Hasbro posted a 30% drop in fourth-quarter net
income as margins fell due to weak holiday toy sales and the
stronger dollar.
Hasbro, known for its GI Joe action figures and Tonka trucks,
reported fourth-quarter net income of 62 cents a share, down from
84 cents a share a year earlier. Revenue fell 5.1% to $1.23
billion, despite strong sales of Playskool and Nerf products.
Excluding the stronger dollar's impact, revenue rose 1%.
Analysts were expecting earnings of 75 cents a share on revenue
of $1.27 billion.
Shares of Hasbro were recently up 4.3% to $24.56.
-By Mary Ellen Lloyd, Dow Jones Newswires; 704-948-9145;
maryellen.lloyd@dowjones.com