Strong sales of Star Wars and Frozen II toys have helped Hasbro enjoy a three per cent increase in revenue, hitting $1.43 billion in sales in the fourth quarter.
Despite the fallout felt from President Trump’s trade war with China, net income rose to $267.3 million in Q4, ended December 29, a stark increase from the $8.8 million it made just one year earlier.
It’s a return to form for Hasbro who was previously weighed with the threat of tariffs in the third quarter, disrupting the company’s supply chain and leading some retailers to cancel shipments. The company had been working to diversify its supply chain and reduce its reliance on sourcing in China.
On an earnings call, chief financial officer, Deborah Thomas, said that the coronavirus has since disrupted Hasbro’s supply chain and commercial operations in China, citing a ‘small impact’ to date, yet highlighting the difficulty in quantifying the potential magnitude.
The biggest increase for Hasbro in its q4 results came from its entertainment, licensing, and digital segment in which it saw revenues rise 22 per cent. The company recently completed a $4 billion, all cash purchase of the British production and distribution company, Entertainment One.
While it saw particular success in Frozen II and Star Wars toys, it was Hasbro’s Magic: The Gathering Arena and the Transformers: Bumblebee film that helped drive entertainment and licensing revenue.
For the full year, partner brands rose 24 per cent to $1.22 billion, with strong sales of Frozen II, Avengers, Spider-Man, and Star Wars lines. Hasbro currently owns the master toy license for Disney’s Marvel and Star Wars franchises.
Hasbro CEO Brian Goldner said that the partnership with Disney is “very successful” and noted that “The Rise of Skywalker” and “The Mandalorian” have been big drivers of sales for the company.”
On the topic of the impact of the coronavirus on Hasbro’s business, Deb Hancock, senior vice president of investor relations for Hasbro, said: “Impact to our business today is small, but it’s challenging to quantify the potential magnitude at this time, as it will depend on how long it takes to contain the outbreak.
“If it takes a significant period of time to control, there could be a larger impact of our business.”
In games, Hasbro saw revenue fall eight per cent to $246.4 million, driven downwards by a decline in in sales of Pie Face and Speak Out. Even strong sales of Hasbro’s Dungeons and Dragons couldn’t off-set the drop.
Dungeons and Dragons revenue grow for the sixth year running, and Magic revenue increases more than 30 per cent during the year.
Disney’s Frozen II has become the highest-grossing animated film in history, having generated $1.325 billion at the global box office to date and pushing past the franchise’s 2013 flagship, Frozen.
The sequel has surpassed both the $1.281 billion made by Frozen, and the $1.243 billion made by The Incredibles to secure the top spot. It hasn’t quite trounced the remake of The Lion King, which stands at $1.65 billion in 2019.
The announcement has stamped Disney’s dominance over the animated film scene, being responsible for the top three biggest cartooned movies of all time.
Frozen 2 notched a number of box office milestones since debuting on November 22. It launched with $130 million, setting a November record for an animated movie and becoming the first animated title outside of summer to surpass triple digits in its first weekend.
The movie also set a new pinnacle for the Thanksgiving box office, earning $123 million over the five-day holiday frame.
Frozen 2 was Disney’s sixth 2019 release to reach $1 billion in ticket sales and Star Wars: Rise of Skywalker will soon become its seventh. That’s the most billion-dollar films from a single studio in one year.