Hasbro is proving that it doesn’t need movie theaters to sell Star Wars toys.
Although the Rhode Island-based toy company saw sales of its associated brands, licensed entertainment studios, fell 12%, to $ 1.08 million year-round , its Star Wars sales grew by 70% in 2020.
Last year was the first time since 2014 that Disney did not release a Star Wars movie in theaters, but Yellow, the boy formerly known as Baby Yoda; High-end collectibles and toy lightsabers fueled the growth of the toy franchise.
Movie theaters have been deprived of quality Hollywood content due to the ongoing pandemic, but Disney + is making up for that loss with shows like “The Mandalorian.”
“What’s been fantastic about our business is that there are now so many people enjoying streaming content, that it’s reached a turning point,” CEO Brian Goldner told CNBC’s “Squawk on the Street”. “And that turning point means you have tens of millions of people watching content over a certain period of time that allows us to do events.”
Earlier Monday, Hasbro said its fourth-quarter earnings fell to $ 105.2 million, or 76 cents a share, from $ 267.3, or $ 2.01 a share, a year ago. But after excluding items, Hasbro earned $ 1.27 per share, which was better than analysts expected at $ 1.14 per share.
Revenue rose 21% to $ 1.72 million, exceeding expectations of $ 1.698 billion, helped by strong sales of games like Jenga, Scrabble and Dungeons & Dragons.
Hasbro shares initially rose in the news, but recently shares fell about 3% at noon as investors worried about the company’s investments in new video and advertising content.
Keep Grogu in stock
The company also faces higher costs due to supply problems, which have included delays due to port congestion. Hasbro has had trouble keeping some items in stock, including those featuring Yellow.
When the character was introduced in 2019, Hasbro was unable to make the most of its popularity. Showrunners Jon Favreau and Dave Filoni were so eager not to spoil their appearance on “The Mandalorian” that they didn’t share any reference photos with toy makers.
Hasbro, along with other toy manufacturers and retailers, had to struggle to meet consumer demand for goods with the little green alien. For the second season, which launched in late 2020, Hasbro was able to test new products and include Grogu products in their holiday versions.
Showcase of products from the New York Toy Fair: “The Mandalorian” and “Star Wars The Clone Wars” at the Dream Hotel on February 20, 2020 in New York City.
Craig Barritt | Getty Images Entertainment | Getty Images
And Disney + has something more than “The Mandalorian.” Over the next few years, the broadcast service will premiere at least nine more Star Wars shows. These include series with popular characters such as Ahsoka Tano, Lando Calrissian, Obi-Wan Kenobi and Boba Fett.
These shows will keep Star Wars fans and Hasbro toy makers busy until 2023, when Patty Jenkin’s “Rogue Squadron” hits theaters.
Outside of the Star Wars universe, Disney + also has about a dozen Marvel series in practice. “WandaVision” is already streaming on the service and “The Hawk and the Winter Soldier” and “Loki” will be released before the middle of the year.
“We see the rapid growth of subscriptions, the globalization of Disney + and access to Disney content for new audiences as a key catalyst driving demand for consumer products,” said Stephanie Wissink, CEO of Jefferies. “Hasbro is one of Disney’s biggest strategic partners in allowing fans of all ages to participate in brands in the form of physical goods.”
When the theaters reopen
Hasbro expanded its alliances with Star Wars and Marvel at Disney in early 2020. It is unclear how long this new contract will be set, but the last time the toy maker renegotiated its master toy licenses for to these franchises was in 2013.
Hasbro has long benefited from its relationship with Disney. In 2019, Hasbro’s associated brand revenue increased 24% to $ 1.222 billion. The company pointed to strong sales of the “Frozen 2”, “Avengers”, “Spider-Man” and “Star Wars” lines.
The licensed content of the toy company is likely to recover in 2021, as coronavirus vaccines will be released to more Americans and moviegoers can return to theaters in larger groups. But Hasbro did not provide a specific earnings forecast.
Disney’s Marvel Studios has four films released this year: “Black Widow,” “Shang-Chi and the Legend of the Ten Rings,” “Eternals” and a third “Spider-Man” movie made in colloquium. collaboration with Sony.
“Plans to have five or more TV shows for Marvel content at Disney + this year combined with expected movie releases create a year-round programming opportunity for Hasbro with a revolving line of deals of products, ”said Eric Handler, general manager of own resources and entertainment research at MKM Partners.