Echoing sentiments across the toy trade, Brian Goldner declared 2018 a “very disruptive year” as the US toymaker posted its fifth consecutive quarter of revenue decline.
Hasbro reported a slump in net revenues of 13 per cent in its fourth quarter report, with total earnings falling to $1.39bn – short of analyst expectations. Net revenues for the full-year 2018 decreased 12% to $4.58 billion versus $5.21 billion in 2017.
Toys R Us was the main culprit in Hasbro’s losses, and not just due to reduced retail outlets to sell through.
“We diversified our retailer base, meaningfully lowered retailer inventories and delivered innovative new offerings to our global consumers,” says Brian. “We were not, however, able to recapture as much of the Toys R Us business during the holiday period as we anticipated, as the effect of its liquidated inventory in the market was more impactful than we and industry experts expected.”
The biggest loss was in Hasbro’s Partner Brands, which include Star Wars, Disney Princess and other high-profile licenses, down by 22 per cent. Beyblade and Marvel were the highlights in this division, with sales growth from the pair helping to offset losses elsewhere in the licensed portfolio.
Hasbro’s Entertainment and Licensing segment was the bright spot, seeing a 5 per cent increase in net revenue to $298.5m compared to $285.6 million in 2017. This, Hasbro said, was due to changes in revenue recognition in 2018 and a multi-year digital streaming deal for Hasbro television programming. The introduction of Power Rangers, which has already helped through licensing fees, is expected to bolster Hasbro’s full-year 2019.
Another upside was that investment in new brands paid off. Lost Kitties, a relatively recently launched blind bag collectable, and Yellies both contributed to a 5 per cent upswing in the Emerging Brands division.
Despite the soft result, CEO Brian Goldner was bullish about the year ahead thanks to the introduction of new brands and product innovaiton into the market that have so far only cost Hasbro money.
“In 2019 we are entering the next innovation cycle for Nerf and we will deliver break frame innovation across price points in the market this year,” he says. “Hasbro’s Power Rangers line will hit the market in the second quarter, setting the stage for an all new era for this iconic brand. We are positioned to advance our gaming leadership, leveraging our investments, social relevance, innovative game play and the industry’s broadest games portfolio, including the launch of our digital game Magic: The Gathering Arena.”
He added: “Finally, to successfully deliver these and numerous other initiatives, we’ve re-imagined and re-designed our go-to-market strategy globally supported by compelling, digital-first marketing programs for our consumers and retailers.”