On Monday, Hasbro announced their earnings for the second quarter. While they beat Wall Street Estimates, they were still off from the previous year in large part due to the liquidation of Toys R Us. Hasbro is also looking at a “rapidly evolving European retail environment in Europe”.
Revenue was down 7% from Q2 last year and Franchise Brands were down 8% with growth in Baby Alive, Monopoly, and Magic: The Gathering offset by losses in the other four franchise brands (MLP, Transformers, Nerf, and Play-Doh).
When asked how the MLP brand was doing and whether they still see benefits to the franchise following the Movie, Hasbro CEO Brian Goldner had this to say as transcribed by Seeking Alpha.
“The MY LITTLE PONY brand has certainly benefited from the movie home entertainment windows and now the movies move from home entertainment into a lot of the streaming services, its performing quite well and we continue to see in markets around the world where the streaming is taking place and the brand continues to hold up quite well and the POS is good. Revenues were down a little bit in the quarter, but again, POS is quite strong as we move to the disruption and the liquidation at Toys“R”Us,” said Goldner.
“Interestingly, as we’ve now gotten our TV series on the air on CCTV which is Chinese Television, we’re seeing some great growth of MY LITTLE PONY in the China market behind that and you should expect to continue to see momentum in our brand as we’ve just launched the season eight in television and that will roll out around the world. And then again in the future we would expect to do another MY LITTLE PONY animated feature film, because again it contributed quite nicely and it’s also a great way to tell story around that brand.”
Goldner also provided insight as to the economics of the Movie.
“The way the movie worked was we produced this movie with third-party studio. We had it distributed by Lionsgate. They took a distribution fee. We then created a toy and game line and we participated in the toys and games sales and earnings from the toys and games. The consumer products where we had hundreds of licensees and the royalty income that came from that, as well as from the movie after paying the distribution fee and allowing for recruitment of the marketing, so that the total economic value was positive for our company and continues to be positive as the content continues to run through home entertainment which actually performed even better than our expectation and now is what is streaming on a number of different platforms and we’ll continue to be a story asset that will run through different territories.
“And of course this really raised halo for the brand. And then of course we’re using beyond that using the television series now that’s airing around the world including with CCTV in China based on a growing relationship with them across TRANSFORMERS and MY LITTLE PONY and that’s also beneficial.”
Goldner also attributed MLP’s decline in the quarter “a bit” due to the loss of Toys R Us.