The impact of the COVID-19 pandemic continues to bear unexpected results for the toy industry.
Despite retail closures, layoffs, furloughs, and the beginnings of a recession, the U.S. toy industry saw a sales increase in the first quarter, according to The NPD Group. Retail sales of toys rose by $256 million to $3.6 billion, a 7.6% increase over the same period last year.
As expected, games and puzzles and outdoor and sports toys drove 77% of the growth. Robust sales growth has been seen in sub-categories including family board/action games, adult puzzles, card games, kids’ games, playground equipment, skates/skateboards/scooters, and pools. Building sets and arts and crafts items contributed to the remaining 23% of sales growth as families began to stay safe at home.
NPD notes the early arrival of Easter as being partially responsible for some sales in March.
“With organized and school sports cancellations being one of the casualties of COVID-19, parents and children yearned for something to take the place of those outdoor, physical activities. Trampolines and skates/skateboards/scooters fulfilled that need for many families,” says Juli Lennett, NPD’s toy industry advisor. “And, with warmer weather approaching, outdoor and sports toys will be the supercategory to watch if lockdowns continue.”
Additionally, top properties for the first quarter are a familiar bunch including MGA Entertainment’s L.O.L. Surprise! and Little Tikes, Hasbro’s NERF, Mattel’s Hot Wheels and Barbie brands, and licensed products including Pokémon, Disney’s Frozen, Star Wars, and Marvel. The top 10 properties combined grew 19% versus the rest of the market, which was 5%.
Looking ahead, all signs point to the second quarter as being more challenging. During Hasbro’s first quarter earnings call, the company said it expects major challenges in the second quarter due to increased retail closures. Similar guidance has led to layoffs and furloughs at many toymakers as the industry braces for potential declines in the spring and summer. Still, many variables are at play, making 2020 a wild card all the way around.
Top photo: Hasbro’s G. I. Joe Cobra Officer has been wearing a protective mask since 1982.