Hasbro is proving that it doesn’t need cinemas to sell Star Wars toys.
While the Rhode Island-based toy company saw sales from its partner brands, licensed entertainment studio content, drop 12% to $ 1.08 billion for the full year, its Star Wars sales grew 70% in 2020.
Last year marked the first time since 2014 that Disney did not release a Star Wars movie in theaters, but Grogu, the child formerly known as Baby Yoda; collectible items and toy lightsabers fueled the growth of the toy franchise.
Theaters have been deprived of Hollywood quality content because of the ongoing pandemic, but Disney + is making up for that loss with programs like “The Mandalorian”.
“What has been great for our business is that streaming content is now being enjoyed by so many people that it has really reached a critical point,” said CEO Brian Goldner on CNBC’s “Squawk on the Street” program on Monday . “And that tipping point means that you have tens of millions of people watching certain content over a period of time that allows us to materialize.”
On Monday, Hasbro said its fourth-quarter earnings dropped to $ 105.2 million, or 76 cents per share, from $ 267.3, or $ 2.01 per share, a year ago. But after deleting items, Hasbro earned $ 1.27 per share, which was better than the $ 1.14 per share analysts had expected.
Revenue grew 21%, to $ 1.72 billion, and exceeded expectations of $ 1.69 billion, aided by strong sales of games like Jenga, Scrabble and Dungeons & Dragons.
Hasbro’s shares initially rose with the news, but recently fell about 3% at noon, with investors concerned about the company’s investments in new video and advertising content.
Keeping Grogu in stock
The company is also facing higher costs with supply problems, which include delays due to port congestion. Hasbro had trouble keeping some items in stock, including those that featured Grogu.
When the character was released in 2019, Hasbro failed to make the most of its popularity. Showrunners Jon Favreau and Dave Filoni were so anxious not to spoil their appearance on “The Mandalorian” that they didn’t share any reference photos with toy makers.
Hasbro, along with other toy and retail manufacturers, had to struggle to meet consumer demand for products characterized by the little green alien. For the second season, which launched in late 2020, Hasbro was able to launch new products and include Grogu products in its holiday launches.
Showcase of New York Toy Fair products: “The Mandalorian” and “Star Wars The Clone Wars” at Dream Hotel on February 20, 2020 in New York City.
Craig Barritt | Getty Images Entertainment | Getty Images
And Disney + has more than just “The Mandalorian”. In the coming years, the streaming service will debut at least nine more Star Wars programs. This includes series with popular characters like 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” is due to hit theaters.
Outside of the Star Wars universe, Disney + also has nearly a dozen Marvel series in progress. “WandaVision” is already being broadcast on the service and “The Falcon and the Winter Soldier” and “Loki” are scheduled to 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 an important catalyst for consumer product demand,” said Stephanie Wissink, managing director at Jefferies. “Hasbro is one of Disney’s biggest strategic partners in allowing fans of all ages to engage with brands in a physical form of merchandise.”
When theaters reopen
Hasbro extended its Star Wars and Marvel partnerships with Disney in early 2020. It is unclear how long this new contract will be defined, but the last time the toy maker renegotiated its master toy licenses for these franchises was in 2013 .
Hasbro has long benefited from its relationship with Disney. In 2019, Hasbro’s partner brand revenue grew 24% to $ 1.22 billion. The company indicated strong sales of the lines “Frozen 2”, “Avengers”, “Spider-Man” and “Star Wars” for the increase.
Licensed content from the toy company is likely to recover in 2021, as coronavirus vaccines are rolled out to more Americans and viewers can return to movie theaters in larger groups. But Hasbro has not provided a specific profit forecast.
Disney’s Marvel Studios has four films scheduled for release this year: “Black Widow”, “Shang-Chi and the Legend of the Ten Rings”, “Eternals” and a third “Spider-Man” film made in partnership with Sony.
“Plans to have 5 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 product offerings “said Eric Handler, managing director of media and entertainment. research at MKM Partners.