It’s been a good year for Hasbro, but the complex challenges of the global supply chain issue are causing some headaches.
The toy and entertainment giant reported its third quarter earnings today with overall revenues that grew 11% over the same period last year. This is the third quarter of reporting under the new trio of operating and financial reporting segments — Consumer Products, Wizards of the Coast and Digital Gaming, and Entertainment — that were revealed in February. The sales of consumer products, including toys and games, fell 3% in Q3 while Wizards of the Coast and digital gaming spiked more than 32%. Revenue in the entertainment division, Entertainment One (eOne) grew 76%.
“The Hasbro team performed at an extremely high level to deliver double-digit revenue growth, strong earnings, and cash flow for the quarter, driven by our diversified business model,” says Rich Stoddart, interim chief executive officer. “While we mourn the passing of our long-time leader and friend Brian Goldner, our performance is a testament to the power and potential of the ‘Brand Blueprint’ strategy he architected. Entertainment revenues were up significantly, as the business returns to pre-pandemic levels, and the momentum of the Wizards of the Coast business continued. These performances more than overcame a small decline in our consumer product shipments amidst global supply chain challenges in the quarter. Our teams continue to work around the clock to secure transport for our goods to meet the robust demand for Hasbro brands.”
According to Hasbro Chief Financial Officer Deborah Thomas, supply chain issues hit in Q3 that cost the company millions in orders, but many of those orders have since been filled.
“We are working tirelessly to ensure product for the holiday, and are pleased that, through today, we have delivered much of what was delayed in the third quarter despite continued supply chain challenges,” Thomas says. “Given the strength across our diversified business model, for the full year, we continue to target double-digit revenue growth, currently expected in the range of 13% to 16%, and operating margins in line with last year’s adjusted level of approximately 15%. We have orders to support the high end of the revenue growth range, but there are supply chain factors out of our control which could impact our ability to fully achieve the upside.”
As far as toys and games are concerned, Hasbro’s brand portfolio — divided into Franchise Brands, Partner Brands, Hasbro Gaming, Emerging Brands, and TV/Film/Entertainment — was up 11% in Q3 and is up 18% for the first nine months of 2021. In Q3, only Partner Brands (licensed product) declined 10%, though Hasbro notes strong sales growth in Ghostbusters and Marvel, particularly the Spider-Man franchise.
Hasbro’s total gaming category has products spread across reporting segments. The company says that when added together, all gaming revenue — including Magic: The Gathering and Monopoly (both reported as Franchise Brands) — rose 21% over 2020 in Q3.
Additional brand highlights in Q3 include My Little Pony, Peppa Pig, PJ Masks, Transformers, and G.I. Joe. Hasbro also notes strong gaming performance out of Dungeons & Dragons and additional classics, including Connect 4, Guess Who, and The Game of Life.
