Last Updated on May 10, 2021 by Danielle
The Force was strong with Hasbro as it reports better than expected revenue and earnings driven by Star Wars.
Hasbro reported strong 4th quarter sales during the holidays, which were driven by a surge in demand for anything Star Wars related. Hasbro’s lineup of Star Wars toys related to the new film led to a 35% sales in its boys segment, causing its net income to rise by 3.4% to $175.8 million.
For the year Hasbro reported a profit of $452.8 million. This exceeded Wall Street expectations as the company breezed by revenue and earnings expectations.
Star Wars, Nerf, Jurassic World, and Marvel all drove toys sales in the boys category, causing sales to skyrocket by 35% compared to the previous year. However, it was Star Wars that led the charge. Hasbro generated 47% of its 4th quarter revenue in international markets.
It’s not surprising that Hasbro had better than expected quarter since it holds the rights to Star Wars toys. As reported, Stars Wars toys flew off the shelves in record numbers thanks to the excitement of the new movie. Movie based toys were some of the best selling toys on Black Friday and Cyber Monday, according to industry experts. This is good news for Disney who plans to release its earning tomorrow.
Hasbro’s CEO, Brian Goldner, said that Stars Wars was very strong. The company’s overall business was impacted in much the same way when the last Star Wars film arrived in 2005. The company is already predicting that the momentum will continue in 2016 with a new spinoff movie hitting in December.
Stars Wars lifted the entire toy industry in 2015 as both children and collectors showed excitement for toys. Star Wars was the hottest toy property in 2015, leading to a rise in the toy industry of 6.7% in 2015. According to the NPD group, these are the best results the toy industry has seen in nearly a decade.
The company did a great job leveraging its biggest brands and there is no reason to believe its momentum won’t continue into 2016. Will Star Wars Toys again be the hottest toys of 2021?
However, all is not rosy in the Hasbro camp. Historically, Hasbro has catered more to boys with lines like GI Joe, Transformers, and Nerf blasters. These are popular boys toys. The company was criticized for not including Daisy Ridley’s character, Ray in its lineup. However, according to Disney, these toys were intentionally held back so as to not spoil any major plot points in the movie. Hasbro has since responded with a second wave of Star Wars toys featuring Ray wielding a light saber.
While there was growth in the preschool, games and boys segments, there were declines in the girls segment. Hasbro still needs to work on its girls segment which fell 17% in 2015. Hasbro will have Anna and Elsa on their side. The company has snatched the Disney Princess and Frozen licenses from Mattel, hoping to attract more girls to its line. These are some of the most popular toys for girls.
The initial toys starting arriving in the 4th quarter of last year. Mattel’s gross sales for the line in 2015 were about $450 million, so it’s going to have a big impact on Hasbro’s revenue.
The bulk of the shipments will roll out in the first quarter with dolls from Cinderella, Beauty and The Beast, and The Little Mermaid. It will be interesting what they do with these new girls properties.
For the toy industry, the final quarter is the most important. It was a big one for Hasbro but even Mattel reported strong 4th quarter sales with strong sales of Barbie. The toy companies are experimenting with their biggest properties in an effort to reach today’s children. Last year, Hasbro launched its Nerf Rival line for girls and boys 14 years and up. Mattel recently announced that it is releasing Barbie with 3 new body types: curvy, tall, and petite.
While Goldner didn’t specifically address the speculative Hasbro Mattel merger, he said that the brand was open to acquisitions that will help it achieve its long term goals. He believes the company is on strong ground from a brand perspective and is continuing forward with its brand Blueprint strategy.
Because of its better than expected 4th quarter earnings, Hasbro raised its dividend by 11%, returning excess cash to its shareholders.