Hasbro is demonstrating that it doesn’t need movie theaters to sell Star Wars toys.
While the Rhode Island-based performers saw sales of its licensed content from entertainment studios fall 12% to $1.08 billion for the full year, its car-boot sales of Star Wars grew by 70% over that period.
Last year marked the first time since 2014 that Disney did not report a Star Wars film in theaters, but sales of Grogu — the child formerly known as Baby Yoda — and of toy lightsabers resisted fuel growth for the toy franchise.
Movie theaters have been deprived of content from Hollywood because of the pandemic, but Disney+ is commissioning up for that loss with shows like “The Mandalorian.”
“What’s been great for our business is that streaming contentedness is now being enjoyed by so many people, it has really hit a tipping point,” CEO Brian Goldner said Monday on CNBC’s “Protest on the Street.” “And that tipping point means that you have tens of millions of people watching a draft of content over a given early period of time that allows us to ‘eventize.'”
Earlier Monday, Hasbro give the word delivered fourth-quarter earnings fell to $105.2 million, or 76 cents per share, from $267.3, or $2.01 per share, a year earlier. But after excluding components, Hasbro earned $1.27 per share, which was better than the $1.14 per share analysts were expecting.
Fourth-quarter take expanded by 21% to to $1.72 billion during the quarter to top a Refinitiv estimate of $1.69 billion, aided by strong tag sales of games such as Jenga, Scrabble and Dungeons & Dragons.
Hasbro shares initially rose on the news, but shares were down wide 2.6% earlier afternoon as investors worried about investments the company is making in new video content and advertising.
Persist in Grogu in stock
The company is also facing higher costs from supply issues, which include put on the back burners from port congestion. Hasbro has had trouble keeping some items in stock, including those featuring Grogu.
When the quality was introduced in 2019, Hasbro was unable to take full advantage of its popularity. Showrunners Jon Favreau and Dave Filoni were so searing not to spoil Grogu’s appearance in “The Mandalorian” that they didn’t share any reference photos with toymakers.
Hasbro, along with other toy and retail makers, had to scramble to meet consumer demand for goods featuring the little green alien. For season two, which launched at the end of 2020, Hasbro was qualified to tease new products and include Grogu goods in its holiday releases.
New York Toy Fair Product Showcase: “The Mandalorian” and “Diva Wars The Clone Wars” at Dream Hotel on February 20, 2020 in New York City.
Craig Barritt | Getty Images Pleasure | Getty Images
Disney+ also has more than just “The Mandalorian.” Over the next few years, the streaming ritual will debut at least nine more Star Wars shows. These include series featuring favoured characters such as Ahsoka Tano, Lando Calrissian, Obi-Wan Kenobi and Boba Fett.
These shows choose keep Star Wars fans and Hasbro toymakers occupied until 2023 when Patty Jenkins’ “Rogue Squadron” is slated to hit theaters.
Most of the Star Wars universe, Disney+ also has nearly a dozen Marvel series in the works. Already, “WandaVision” is streamlet on the service and “The Falcon and the Winter Soldier” and “Loki” are set to launch before midyear.
“We see the rapid subscription growth, globalization of Disney+ and the access to Disney ease for new audiences as a key catalyst driving consumer product demand,” said Stephanie Wissink, managing director at Jefferies. “Hasbro is one of Disney’s largest cardinal partners in enabling fans of all ages to engage in the brands in a physical goods form.”
When theaters reopen
Hasbro prolonged its Star Wars and Marvel partnerships with Disney in early 2020. It’s unclear how long the new contract is set for, but the last conditions the toymaker renegotiated its master toy licenses for those franchises was in 2013.
Hasbro has long benefited from its relationship with Disney. In 2019, yield from Hasbro’s partner brands rose 24% to $1.22 billion. The company pointed to strong sales of “Set excluded 2,” “Avengers,” “Spider-Man” and “Star Wars” lines for the increase.
The toy company’s licensed content will conceivable rebound in 2021, as coronavirus vaccines are rolled out to more Americans and moviegoers can return to theaters in larger numbers. Hasbro didn’t fix up with provision a specific earnings forecast, however.
Disney’s Marvel Studios has four films set for release this year: “Jet-black Widow,” “Shang-Chi and the Legend of the Ten Rings,” “Eternals” and a third “Spider-Man” film made in partnership with Sony.
“The aims to have 5 or so TV shows for Marvel content on Disney+ this year combined with expected movie releases imagines a year round programming opportunity for Hasbro with a revolving lineup of product offerings,” said Eric Handler, succeeding director of media and entertainment equity research at MKM Partners.