Tag Archives: hasbro analysis



My ex-employers Hasbro have been in the new for three announcements in the last week:

Firstly, they announced the acquisition of D&D Beyond from Fandom. This is in effect an acquisition of a collection of fans of the brand via a popular web portal. Clearly new Hasbro CEO Chris Cocks has a deep understanding of the Wizards of the Coast business, and all thinks Strategy and online gaming, and that is reflected in the company’s first major acquisition under Mr. Cocks’ stewardship.

Next Hasbro announced two key appointments – Shane Azzi joins the company from Kimberley Clark as Chief Global Supply Chain Officer, and Matt Austin is promoted to Chief Commercial Officer. These job titles may sound a little bland, but they are key roles in driving the company forward – supply chain is obviously the major challenge for any consumer products business currently, and the Chief Commercial Officer at a major stock market listed company like Hasbro has responsibility for making sure shipments meet market expectations, which is a highly pressured position. Again, we can see the impact and control of Hasbro’s new CEO in these senior level appointments.

Finally, this week (so far at least!), Hasbro reported Q1 results. Bearing in mind the stellar performance of the US toy market in 2021, and Hasbro’s super strong full year in 2021, it will be particularly hard for the company to deliver growth again in a high inflation environment where consumers have less disposable income to spend on such fripperies as toys! Nevertheless, Hasbro reported revenue growth of 6% for Q1 2022 vs 2021 (allowing for a $17m unfavourable FX move). Operating profit was down for the quarter, but Q1 is not the most critical for driving profitability. Overall, Hasbro made good progress in Q1 against the backdrop of a stellar 2021 which was always going to be hard to match let alone beat and extremely difficult times.


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What Hasbro’s FY 2020 Results Can Teach Us About The Toy Business

What Hasbro’s FY 2020 Results Can Teach Us About The Toy Business

Hasbro just released their Q4 & final full year results for the COVID-19 ravaged year of 2020. By Hasbro’s standards of financial performance over the last decade or so, the results (which show a rare sales decline) may on the face of it seem disappointing. However, our read of these results is that they are actually extremely impressive in the face of a crazy (unprecedented!) year.

The big hit Hasbro took for their 2020 business is the reductions in revenues from movie & entertainment related segments (this applies both to franchises owned by Hasbro and 3rd party franchises they license in). When you consider that Hasbro is the primary lead toy licensee across much of Disney’s portfolio including Star Wars and Marvel, and that these mega franchises couldn’t launch cinematically in the usual way whether they were ready to or not in 2020, then actually Hasbro’s performance was not so bad.

Aside from highlighting Hasbro’s results to the stock market, there is something more fundamental to learn from how Hasbro did in 2020. Net revenues reduced by 8% year on year, yet major segments were much further down than this: Partner franchises (which includes Star Wars, Marvel & other Walt Disney Corp owned brands) down a whopping 12%. Hasbro’s TV/Film/Entertainment segment was down a massive 21% and the Emerging Brands segment which includes the major eOne titles Peppa Pig, PJ Masks & Ricky Zoom was down 17%. These are massive reductions in revenues for key segments of Hasbro’s business. But how can the overall business be only down by 8% if these business areas were down so much?

The answer of course is diversification. Hasbro have been in business for a long time. The company first started back in 1923, albeit they didn’t become primarily a toy business until 1942. Mr. Potato Head was the firm’s first hit product, launched in the 1950s. So this is a company with a long history. And over the decades since those early days the company has built an incredible brand portfolio featuring icon brands and products from across the toy & game business. One of Hasbro’s major advantages versus other major toy companies is the overwhelming strength of their games business, especially in North America, where they own if not all, nearly all iconic board games brands from Monopoly to Clue/do, Trivial Pursuit and (for North America) Scrabble.

Hasbro’s 2020 performance was down, but it was saved from being down disastrously by their long-term strategy of diversification and the strength of their Hasbro Gaming brands. Hasbro Gaming was in fact up 15% year on year for 2020, as lockdown increased home play occasions and propensity to play towards a level normally only seen around the festive season.

The key lesson then for small and growing toy companies can be found in a well-known cliché – don’t put all your eggs in one basket. Every year the toy industry as a whole tends to grow, but beneath moderate topline growth is typically a huge amount of churn, there are winners and losers each year. There are unexpected smash hits and massive flops. Some companies achieve record success one year and go out of business not too long after. In an industry which is so up and down, those toy companies who are successful over the long term tend to create a good solid brand which can stay in market (with some ongoing product development), and thus they build up one egg in one basket, but sometimes they fail to put more eggs in more baskets to reduce the risk of the first or any subsequent ‘eggs’ going belly up.

This then is the key learning from Hasbro’s 2020 full year results – product and category diversification can often mitigate against a bad year for one brand or product line.


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