On Thursday, Mattel exceeded expectations by not having as sharp a decline in revenue as feared compared to this time last year. On Monday, Hasbro exceeded expectations with an increase in first quarter revenues by 5% overall and a 25% increase in operating profit. The seven franchise brands (Littlest Pet Shop, Magic: The Gathering, Monopoly, My Little Pony, Nerf, Play-Doh, Transformers) grew 20% over this time last year.
The Boys category shot up 10% buoyed by Transformers, Marvel tie-ins, and initial shipments of Jurassic World. Games was up 7% on the strength on Magic: The Gathering and Monopoly which offset declines in several other brands such as Angry Birds. Play-Doh and Transformers: Rescue Bots helped lead the Preschool category to a 22% uptick in revenue. The Girls category as a whole was one of the few sore spots as revenue dropped 16% mainly to due to declining sales of Furby, Furreal Friends, and Easy Bake products. Littlest Pet Shop and Play-Doh’s “Doh-Vinci” are noted for helping partially offset those declines.
Where MLP comes in is the increase in Entertainment and Licensing Segment. Along with Transformers, they helped contribute to a 74% increase in net revenues which also includes a multi-year streaming deal for Hasbro Studios television shows. Operating profit grew 174%.
There wasn’t much mention of MLP in the conference call, but Hasbro CEO Brian Goldner has this to say when asked about their first quarter performance as transcribed by Seeking Alpha.
“MY LITTLE PONY continues to perform quite well for us globally,” said Goldner. “It certainly benefits from revenues in several different categories. It goes back to the idea of being a franchise brand, and having licensed product as well as our own toy and game product. We are gearing up for the fifth season of MY LITTLE PONY is just breaking now and will break throughout the year.
So brand-new product lineup around the fifth season that comes in second, third, and fourth quarters. But MY LITTLE PONY performed well, its POS was in the PONY business, the core PONY business was quite good for the quarter, double-digit POS increase there. And again, it’s a small first quarter. And we’re gearing up for the rest of the year, but MY LITTLE PONY continued to grow in the quarter.”
It’s going to be in quarter two through four where we will start to see if Season Five will add to the hot streak that MLP is on in terms of growth. As for this quarter, the news was well-received on Wall Street to say the least. Shares in Hasbro (NASDAQ: HAS) went up $8.27 a share to $74.16. That was enough to once again pass Mattel in terms of market cap if only temporary.