Hasbro expands Marvel, ‘Star Wars’ deals as superhero toy sales slow
Hasbro Inc., the country’s largest toymaker behind Southern California’s Mattel Inc., suffered a 16% slump in second-quarter profit as its boys category struggled to recoup last summer’s strength.
During the period, which ended June 30, the division’s sales tanked 35%.
The Nerf brand of squishy, foam-based toys did well, but labels such as superhero-centric Marvel and Beyblade spinning tops failed to match the success of products linked to summer blockbuster films last year.
Overall, revenue at the Pawtucket, R.I., company dove 6% to $766.3 million compared with the same quarter in 2012. Net income deflated to $26.5 million, or 28 cents a share, from $43.4 million, or 33 cents a share.
The earnings came in under Wall Street expectations. However, in mid-morning trading in New York, Hasbro stock was up nearly 2%, or 87 cents, to $46.25 cents a share.
In North America, sales declined 4%. The gauge was 6% lower internationally.
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Hasbro is in the midst of a cost-savings initiative that seeks $100 million in annual savings by 2015. The effort claimed dozens of jobs this spring.
But Hasbro was matching, if not outperforming, its larger rival Mattel in several categories.
The El Segundo giant reported its second-quarter earnings last week, reporting a 12% revenue decline. Weakness in its Barbie brand kept girl brands to a 23% upswing, while its Fisher-Price category for the uber-young sank 3%.
At Hasbro, sales of girls toys soared 43% in its fourth-straight quarter of growth on the popularity of Furby and My Little Pony. Board games, propelled by Magic: The Gathering and Monopoly, surged 19%. Play-doh and Sesame Street helped the preschool division to a 4% boost.
The company also said it is expanding its digital gaming offerings and is developing more products linked to film and television properties, such as next year’s “Transformers 4.” During the second quarter, sales at Hasbro’s entertainment and licensing division slid 18%.
On Monday, Hasbro said it was expanding its merchandising contracts with Marvel and the Walt Disney Co., which owns “Star Wars” creator Lucasfilm.
The deal stretches Hasbro’s rights to 8,000 Marvel characters, such as Spider-Man and Iron Man, for an extra two years through 2020. The toy company’s hold over the “Star Wars” franchise runs through the same time-frame.
Hasbro also agreed to pay up to $225 million in guaranteed payments ahead of the next three planned “Star Wars” sequel films, including summer 2015’s “Episode VII.”
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Follow Tiffany Hsu on Twitter at @tiffhsulatimes
