Innovation and acquisitions
Hasbro (HAS) and other toy companies have been impacted by the liquidation of one of their biggest retail partners—Toys “R” Us. The increasing trend of children playing video games and mobile games has reduced demand for traditional toys.
To compete for kids’ attention, Hasbro is focused on product innovation. In its second-quarter conference call on July 23, Hasbro CEO Brian Goldner stated that in the face of the Toys “R” Us liquidation, brand innovation would drive its long-term growth. The company has quite a few products in the pipeline for the holiday season. These products include its Disney Princess business, Monopoly, Nerf, Transformers, and Baby Alive franchise brands.
Hasbro recently signed a deal with Epic Games. Under this agreement, Hasbro plans to launch Nerf and Monopoly experiences inspired by the popular Fortnite games. The Monopoly: Fortnite Edition game is scheduled for launch this fall in both the United States and the UK. The company plans to gradually launch the game in other territories in 2019. It plans to launch Nerf Fortnite Blasters in 2019.
Hasbro has been developing product lines inspired by recent movies, including Venom, Deadpool, Ant-Man and the Wasp, and Spider-Man: Into the Spider-Verse. These releases are expected to add to the company’s top-line growth. The Power Rangers acquisition is also expected to emerge as a growth catalyst.
Hasbro is committing considerable monetary resources to its omnichannel initiatives. Hasbro is producing an animated series called Transformers: Cyberverse for the Cartoon Network. Hasbro and Paramount already have a deal for Transformers and G.I. Joe. Hasbro is gearing up for the release of Bumblebee, which is one of the main Transformers characters, this December. The Hasbro-Paramount collaboration also includes another four Transformers movies and two G.I. Joe movies.
A look at the top-line numbers
In the trailing four quarters, Hasbro’s revenues have exceeded analysts’ estimates twice and missed in the other two quarters. The liquidation of Toys “R” Us was the primary factor that impacted the top lines for major toymakers such as Hasbro.
During its second-quarter earnings conference call, Goldner stated that Hasbro doesn’t expect to “recapture” the lost revenue by 2018. However, it expects that it will stop feeling the negative impact of the Toys “R” Us liquidation by 2019.