GI Joe no… Hasbro, the toy giant behind Monopoly, Jenga, and My Little Pony, dropped not-so-fun earnings yesterday. Its sales fell a worse-than-expected 17% last quarter, and it swung to a $128M loss after posting a profit the year before. Hasbro (like Barbie maker Mattel) struggled during the holidays as parents cut back on costlier name brands. Hasbro said toy-flation could extend the buying blues through the first half of the year.
Un-boxing: Hasbro shares are down 40% this year, and last month it laid off 15% of its workforce as it looks to cut costs and offload its TV and film biz.
Halo effect: But Hasbro had record revenue for its Marvel toys and fantasy card game “Magic: The Gathering,” and says new expansion packs could pay off in later quarters.
Bibbidi Bobbidi boost… Hasbro started the year on a sour note after losing its Disney princess licensing rights to Mattel and dropping other popular franchises like Trollz. But it had Magic to fall back on: last quarter the card game became Hasbro’s first billion-dollar brand, making up nearly a fifth of its annual revenue. Magic’s popularity has inspired video games, comic books, a Caribbean cruise, and an animated Netflix series.
A magic player can carry the team… As consumer shopping slows from its pandemic highs, companies are leveraging franchises with passionate fan bases to keep sales afloat. Hasbro’s CEO said Magic fans are “very resilient” and motivated to spend on things they really enjoy. It’s also leaning on its hit Dungeons & Dragons franchise. Still, some analysts say that player fatigue and pricey cards (think $50/pack) could hurt growth.