Hasbro: Won't Grow 1Q Revenue Given Forex, Inventory Pressures

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; [e-mail]