Hasbro Inc. (HAS - Free Report) posted robust third-quarter 2016 results, wherein both earnings and revenues surpassed the respective Zacks Consensus Estimate.

Earnings and Revenue Discussion

Earnings of $2.03 per share beat the Zacks Consensus Estimate of $1.74 by 16.7% and surged nearly 29% year over year (y/y).

Hasbro's net revenue of $1.68 billion also soared 14%. Excluding a negative $2.8 million impact from foreign exchange, revenues were up 16%. Moreover, revenues beat the Zacks Consensus Estimate of $1.57 billion by 7%. Notably, revenues improved in three out of its four product segments category – Games, Girls, Boys – on a y/y basis, with Preschool being the exception.

Hasbro's cost of sales ratio decreased 20 basis points (bps) to 39%. Meanwhile, selling, distribution and administration expenses and royalty expense ratio inched up 20 bps and 30 bps, respectively. Operating profit grew almost 22% y/y to $362.1 million, due to higher revenues.

HASBRO INC Price, Consensus and EPS Surprise

HASBRO INC Price, Consensus and EPS Surprise | HASBRO INC Quote

Behind the Headline Numbers

The Boys category posted revenue growth for the eleventh consecutive quarter. Sales came in at $605.5 million, up 2% y/y, bolstered by improvement in the Nerf and Transformers brands. The Yokai Watch brand also drove the segment’s sales.

Preschool revenues declined 8% to $202.8 million as weakness in Playskool Heroes and core Playskool items more than offset the growth in Play-Doh brand.

Games revenues inched up 13% to $409.5 million, on the back of growth in multiple gaming formats including face-to-face gaming, off-the-board gaming ,and digital gaming.

The Girls category recorded a 57% year-over-year rise in revenues to $462 million. Notably, the segment witnessed growth for the third successive quarter, thereby marking a turnaround after prior five consecutive quarterly declines. Growth was mainly driven by Hasbro’s Disney Princess and Disney’s Frozen fashion and small dolls and Dreamworks’ Trolls. Additionally, Baby Alive and Furby products too supported sales in the quarter.

Regionally, net revenue from the U.S. and Canada segment soared 16% to $932.8 million, supported by growth in the Girls and Games categories, partly offset by the dip in Boys and Preschool revenues. The segment reported operating profit of $228 million, reflecting a 22% y/y surge.

International revenues were $690.7 million, up 13% y/y. Notably, revenues grew in the Boys, Girls, and Preschool categories, but was flat in the Games category. Sales in Europe, Latin America, and Asia Pacific, all registered an increase. International operating profit was $133.1 million, up 17% from a year ago.

Entertainment and licensing segment revenues improved 8% y/y to $56.1 million, on the back of growth in Consumer Products and Digital Gaming. The segment's operating profit decreased 13% to $14.1 million.

Zacks Rank & Stocks to Consider

Currently, Hasbro carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the industry include Electronic Arts, Inc. (EA - Free Report) , Mattel, Inc. (MAT - Free Report) and Nintendo Co. Ltd. (NTDOY - Free Report) .

Electronic Arts’ current year growth estimate is pegged at 16.2% compared with the industry average of 9.6%. The company currently sports a Zacks Rank #1(Strong Buy).

Mattel sports a Zacks Rank #1 too. It has witnessed three upward estimate revisions for its current quarter earnings over the past 60 days, as against only one downward revision.

Nintendo carries a Zacks Rank #2 (Buy). Its current year growth estimate of 184.4% is much higher than the industry average of 9.6%.