'Transformers,' 'Joe' boost toymaker's profits
Movies are helping Hasbro move a lot of toys.
The second-largest toymaker said summer actioners “Transformers: Revenge of the Fallen” and “G.I. Joe: Rise of Cobra” — adaptations of popular Hasbro brands — boosted the company’s third-quarter earnings, with profits up 9% from the same period a year ago.
Hasbro’s line of Transformers action figures and toys were especially aided by the second installment of Paramount’s film franchise, which has earned $833 million worldwide.
While Hasbro declined to disclose just how many of the “Transformers”-based toys it has sold, it expected the sequel to generate as much as $600 million in sales for the brand this year. First “Transformers” pic generated some $484 million in toy sales after its bow in 2007.
“G.I. Joe” which crossed the $300 million mark at the worldwide box office over the weekend, helped drive up interest in the toy line, as well. It expects revenue of more than $100 million for the property this year.
While that figure hardly comes close to what Transformers has collected, it’s still three times more than what G.I. Joe sold a year ago, and most of that is associated with Par’s release of “Rise of the Cobra” in August.
“I don’t think we can expect every motion picture we put out to be ‘Transformers,'” said Hasbro CEO Brian Goldner.
But the pics are helping boost Hasbro’s overall sales — up nearly 10% for the year — while the rest of the toy industry is down 2% to $10.3 billion through August, according to NPD Group.
Hasbro has sequels of “Transformers” and “G.I. Joe” in the works at Paramount, and several high-profile projects set up at Universal, including pics based on its board games like Battleship, Monopoly, Candyland and Ouija that should also boost interest in those lines outside the Christmas holiday season when toymakers can earn half their annual sales.
It will produce toys based on “Iron Man 2” and “Toy Story 3” next year.
The movie-based toys drove up sales for Hasbro’s boy brands, with the division accounting for 35% of the company’s haul during the quarter. Overall, its sales fell 2% during the three-month period, especially in toys for the girls, preschool, games and puzzle categories, which includes Monopoly, Scrabble and Trivial Pursuit. Nerf, Littlest Pet Shop, Play-Doh and Tonka also performed well, however.
Hasbro announced its joint venture with Discovery Communications, to bow a kids TV channel next year, reduced profits, as did investments in a new digital studio.
Hasbro earned $150 million during the quarter, which ended Sept. 27, up from $138 million, while revenues fell to $1.28 billion from $1.3 billion a year ago.