Hasbro proves he does not need movie theaters to sell Star Wars toys.
While the Rhode Island-based toy company dropped sales of its partner brands, licensed entertainment studio content, by 12% to $ 1.08 billion for the full year, 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 Grogu, the kid formerly known as Baby Yoda; high-end collectibles and toy lights have fueled growth for the toy franchise.
Movie theaters have been deprived of quality content from Hollywood due to the ongoing pandemic, but Disney + is compensating for the loss with shows like ‘The Mandalorian’.
“What’s great about our business is that so many people are now enjoying streaming content, it’s reached a turning point,” CEO Brian Goldner said on CNBC’s “Squawk on the Street” on Monday. “And that tipping point means that tens of millions of people are watching a piece of content during an early period that enables us to happen.”
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 $ 1.14 per share.
Revenue rose 21% to $ 1.72 billion and exceeded expectations of $ 1.69 billion, helped by strong sales of games such as Jenga, Scrabble and Dungeons & Dragons.
Hasbro shares initially rose with the news, but the shares fell by 3% recently at noon as investors worried about the company’s investments in new video content and advertising.
Keep Grogu in stock
The company also has higher costs due to supply issues, which include delays in port congestion. Hasbro has had trouble keeping some items in stock, including those containing Grogu.
When the character was launched in 2019, Hasbro could not take full advantage of its popularity. Jon Favreau and Dave Filoni were so eager not to spoil his appearance in “The Mandalorian” that they did not share any reference photos with playmakers.
Hasbro had to scramble with other toy and retail manufacturers to meet the consumer demand for goods with the little green stranger. For season two, which was launched at the end of 2020, Hasbro was able to tease new products and include Grogu goods in its holiday releases.
New York Toy Fair Product Showcase: ‘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’. Over the next few years, the streaming service will show at least nine more Star Wars shows. These include series featuring popular characters such as Ahsoka Tano, Lando Calrissian, Obi-Wan Kenobi and Boba Fett.
These shows will keep Hasbro’s Star Wars fans and playmakers busy until 2023 when Patty Jenkin’s “Rogue Squadron” hits theaters.
In addition to the Star Wars universe, Disney + also has nearly a dozen Marvel series in the works. “WandaVision” is already streaming out on the service and “The Falcon and the Winter Soldier” and “Loki” are being launched before the middle of the year.
“We see the rapid growth in subscribers, globalization of Disney + and the access to Disney content for new audiences as a major catalyst driving the demand for consumer products,” said Stephanie Wissink, CEO of Jefferies. “Hasbro is one of Disney’s largest strategic partners in enabling fans of all ages to engage the brands in a physical goods form.”
When theaters reopen
Hasbro extended its Star Wars and Marvel partnerships with Disney in early 2020. It is unclear how long this new contract is planned, but the last time the toy maker renegotiated its master toy licenses for the franchises was in 2013.
Hasbro has long benefited from its relationship with Disney. In 2019, Hasbro’s brand revenue increased 24% to $ 1.22 billion. The company pointed to strong sales of ‘Frozen 2’, ‘Avengers’, ‘Spider-Man’ and ‘Star Wars’ for the increase.
The licensed content of the toy business is likely to recover in 2021, as coronavirus vaccines are rolled out to more Americans and moviegoers in larger groups can return to cinemas. But Hasbro did not provide a specific earnings estimate.
Disney’s Marvel Studios has released four films this year: ‘Black Widow’, ‘Shang-Chi and the Legend of the Ten Rings’, ‘Eternals’ and a third ‘Spider-Man’ film in partnership with Sony was made.
“The plans to have five or more Marvel content TV shows on Disney + this year, along with expected movie releases, create an annual opportunity for Hasbro with a revolving product offering,” said Eric Handler, managing director of media- and entertainment interest, said research at MKM Partners.