The holidays weren’t as giving as Hasbro had hoped — the company saw profits slip 1% during the fourth quarter, when toymakers typically generate a large portion of their annual sales — but the toymaker is counting on its Hollywood properties to bolster its bottom line going forward.
Sales were off 2% in the U.S. and Canada to $593 million but rose 8.4% overseas to $669.8 million, especially in Asia, Europe, Latin America and Mexico.
Hasbro saw softer returns from its girls, games and puzzles groups, which includes Battleship, Monopoly, Risk, Ouija and Candy Land, all properties being adapted into films. “Battleship” sets sail at plexes in May.
“We did not meet our expectations for growth in the U.S. and Canada segment, as we experienced weaker demand than we had anticipated, especially post-Thanksgiving, including challenges in the games and puzzles category,” off 11%, said Hasbro prexy-CEO Brian Goldner.
Company tapped Wiebe Tinga to lead the division and boost sales after growing Hasbro’s toy line in emerging markets.
That group already has been updating boardgames by adding interactive technology (electronic dice for Yahtzee and a digital bank to Monopoly, for example) while creating digital versions for online play.
“We continue to believe that through a combination of face-to-face, off-the-board and digital gaming, there is an opportunity to grow our gaming business,” Goldner said in a conference call with analysts.
Goldner also told analysts he believes adaptations of Hasbro’s properties as films and TV shows will help increase interest in the toy aisles. Hasbro recently moved “Stretch Armstrong” from Universal to Relativity Media and believes reinventing the brand will boost revenue when the film bows in 2014, considering Hasbro hadn’t promoted the property with marketing dollars in 20 years, Goldner said.
Hasbro has a similar line of film-based toys set to target boys around the upcoming pics “Battleship,” “The Avengers,” “The Amazing-Spider Man,” “Star Wars: Episode I — The Phantom Menace in 3-D” and “G.I. Joe: Retaliation.”
The boys division, Hasbro’s largest, grew 29% in the fourth quarter and 35% during all of 2011, with pre-school toys up 15%. The girls line was off 16%.
Films, along with TV shows that air on its kids cabler the Hub helped entertainment and licensing revenue climb to $64.1 million from $53.5 million during the quarter.
Toys based on “Transformers” rose 85% in 2011, coming in at the low end of Hasbro’s expectations, given the success of “Transformers: Dark of the Moon,” which earned over $1.1 billion at the box office and popular Hub series “Transformers Prime.”
“Similar to how we are successfully reigniting ‘My Little Pony,’ ‘Littlest Pet Shop’ will tell stories, which engage the ‘Littlest Pet Shop’ consumers and carry through our merchandise and retail presence,” Goldner said.