The collapse of Toys “R” Us in the U.S. and other territories had a larger impact than expected for Hasbro. Net revenues for the Rhode Island-based toymaker fell 12 percent to $4.58 billion last year versus $5.21 billion in 2017. The company notes international declines as being a large part of its challenge, particularly in Europe where consumer tastes and the retail landscape are rapidly evolving. Revenue declined 13 percent during the fourth quarter.

“2018 was a very disruptive year, driven by the bankruptcy and liquidation of Toys“R”Us across most of the world and a rapidly shifting consumer and retail landscape,” says Brian Goldner, Hasbro’s chairman and chief executive officer. “During 2018, we diversified our retailer base, meaningfully lowered retailer inventories and delivered innovative new offerings to our global consumers. We were not, however, able to recapture as much of the Toys“R”Us business during the holiday period as we anticipated as the effect of its liquidated inventory in the market was more impactful than we and industry experts expected. It is an unprecedented yet finite event. In addition, as we discussed throughout the year, our European shipments declined as the teams successfully lowered retailer inventories amidst a declining toy and game market.”

For the year, entertainment and licensing segment net revenues increased 5 percent due to digital streaming deals for Hasbro Studios television programming. Franchise brand net revenues fell 9 percent, with gains in Monopoly and Magic: The Gathering offset by losses in all other franchise brands.

Partner brands were hit hard, with a 22 percent drop led by declines in Disney Princess, Frozen and Trolls. The disappointing performance of Solo: A Star Wars Story and its May release vs. the usual holiday positioning for Star Wars films also made impact.

Hasbro gaming revenue declined 12 percent for the year, while emerging brands saw an increase of 1 percent. New collectibles such as Lost Kitties and Yellies, along with the addition of Power Rangers licensing revenues offset declines across Playskool and Furreal Friends.

For this year, Goldner points to an “innovation year” for Nerf (new items previewed here), along with the formal launch of the Hasbro-owned Power Rangers franchise in Q2 (previewed here) as bright spots to look forward to.

On the partner brands front, the company is looking toward a strong movie year for a rebound. “We will deliver all new play experiences in support of a raft of compelling entertainment properties, including Marvel Studios’ Captain Marvel and Avengers: Endgame, Columbia Pictures’ Spider-Man: Far From Home, Disney Animation’s Frozen 2 and Lucasfilm’s Star Wars: Episode IX,” Goldner says.

Additionally, the company has redesigned their market strategy to embrace digital-first marketing programs for consumers and retailers.

About the author

James Zahn

James Zahn

James Zahn, AKA The Rock Father, is Editor-in-Chief of The Toy Book, a Senior Editor at The Toy Insider and The Pop Insider, and Editor of The Toy Report, The Toy Book‘s weekly industry newsletter. As a pop culture and toy industry expert, Zahn has appeared as a panelist and guest at events including Comic-Con International: San Diego (SDCC) Wizard World Chicago, and the ASTRA Marketplace & Academy. Zahn has more than 30 years of experience in the entertainment, retail, and publishing industries, and is frequently called upon to offer expert commentary for publications such as Forbes, Marketwatch, the Wall Street Journal, the New York Times, USA Today, Reuters, the Washington Post, and more. James has appeared on History Channel’s Modern Marvels, was interviewed by Larry King and Anderson Cooper, and has been seen on Yahoo! Finance, CNN, CNBC, FOX Business, NBC, ABC, CBS, WGN, The CW, and more. Zahn joined the Adventure Media & Events family in 2016, initially serving as a member of the Parent Advisory Board after penning articles for the Netflix Stream Team, Fandango Family, PBS KIDS, Sprout Parents (now Universal Kids), PopSugar, and Chicago Parent. He eventually joined the company full time as a Senior Editor and moved up the ranks to Deputy Editor and Editor-in-Chief.