Hasbro kicked off 2021 with strong performance during its first quarter of reporting under its recently announced new trio of operating and financial reporting segments: Consumer Products, Wizards of the Coast and Digital Gaming, and Entertainment. The sales of consumer products, including toys and games, grew 14% while Wizards of the Coast and digital gaming spiked 15%.
Overall revenue grew 1% as the production pipeline of Entertainment One (eOne) remains disrupted due to the COVID-19 pandemic and a delay in project delivery and release. The Entertainment segment fell 32% in Q1.
“The global Hasbro team executed a very good quarter, driving strong sell-in and demand in the consumer products segment; growing both analog and digital revenues in Wizards and our licensed digital gaming business, and positioning us to deliver growth for the full year in the Entertainment segment,” says Hasbro Chairman and CEO Brian Goldner.”We continue to target full-year double-digit revenue growth for Hasbro supported by innovation and quality execution throughout the business. Across Hasbro, we are focused on unlocking the full potential value of our brands and capabilities as a play and entertainment leader.”
Hasbro says that Magic: The Gathering, Play-Doh, NERF, Transformers, and Baby Alive saw big growth in its owned franchise brands. Partner brands, including Lucasfilm’s Star Wars and The Mandalorian, Marvel products, and Disney Princess continue to see a big boost thanks to the availability of streaming content based on Disney+. Consumer products sales in North America spiked 13% in Q1. Emerging Hasbro brands, including G.I. Joe, Super Soaker, and Furreal Friends were highlighted as experiencing growth.
Hasbro Gaming was down slightly in Q1 as it begins to run up against hard comps from the beginning of the pandemic era in which the segment outperformed. Still, total gaming was up 7% with highlights including Dungeons & Dragons, Yahtzee, Clue, and the new brand, Foosketball.
At the cash registers, POS is up 9% globally. Transformers POS is up 40% driven by fresh digital content, including the War for Cybertron Trilogy on Netflix. Disney Princess POS was up 60%. Total e-commerce sales spiked 70% in Q1.
While entertainment slid over the past year and into the first quarter, on this morning’s earnings call Goldner said that the company expects solid growth this year as delivery kicks in and new projects enter production. The live-action Dungeons & Dragons movie is in pre-production, and Goldner says that the upcoming Power Rangers feature film “will be headed to a platform to be announced soon.” Snake Eyes: G.I. Joe Origins hits theaters on July 23 and the My Little Pony reboot movie hits Netflix this fall.
One developing challenge for the entire toy industry is rising costs and Hasbro is no exception. Deborah Thomas, Hasbro’s chief financial officer, joined Goldner in expressing concern for rising materials costs, including resin and metals, along with huge increases in freight and logistics. Costs for shipping and storage space are up across the board, and Hasbro is incurring additional costs by skipping the container ships and logjams at the ports by shipping select products via air freight.