Hasbro posted a strong 13% growth in net revenues for the first quarter of 2008 driven by sales of Transformers, Star Wars, Littlest Pet Shop and board games.  In a conference call with analysts Hasbro’s CEO Alfred J. Verrecchia noted that the “Boys” category grew by 29% for the quarter with sales of Transformers, Star Wars, and Spider-Man toys up 38% (on a combined basis) over last year. 

Transformers sales are still being driven by sales of the movie on DVD—it was the bestselling DVD of 2007 (13+ million) and has sold an additional 700,000 units in 2008.  The Transformers Animated series, which debuted in Q1, was the highest rated program on the Cartoon Network during the quarter.  Hasbro plans to debut a line of Transformers toys based on the animated series in the fall, which should help maintain strong sales on the brand.

Sales of Star Wars toys were up 19% for the quarter and Hasbro is hoping that the August theatrical debut of the Star Wars: The Clone Wars will keep this venerable property viable.  After its theatrical debut, The Clone Wars heads to the Cartoon Network, where like the new Transformers Animated series, it should provide some long term sales. Verrecchia also indicated that sales of Marvel toys were on target, helped by the popularity of the Spectacular Spider-Man TV series.

But TV shows aren’t the only sales drivers for Hasbro, which has major product line launches for three 2008 movies, Iron Man, Indiana Jones, and The Incredible Hulk.  “Retail expectations for all three movies -- Iron Man, The Incredible Hulk, and Indiana Jones -- are quite a bit better today than they were at the beginning of the year," Verrecchia said.  "In addition, initial sales of our Iron Man product, as well as initial sales of a number of Indiana Jones offerings already on the market in other categories, have been above expectations.”

With Iron Man performing better than expected, one analyst asked if Hasbro was going to be able to keep up with demand if the movie and its attendant merchandise really take off.  Verrecchia replied that Hasbro has “a fair amount of flexibility,” and “should be able to satisfy the market.” 

When asked whether the negative buzz surrounding The Incredible Hulk could affect sales of Hulk toys (which are shipping Q2), Hasbro COO Brian Goldner appeared to imply that negative buzz can’t hurt when he said: “We are seeing good retail excitement about the product line and what goes on in Hollywood really doesn’t affect the overall impact of our toy line.”

Early indications are that the Indiana Jones toys will also do well, though Hasbro has not shipped very much product yet.  But in spite of the potential of the three movies, Brian Goldner believes that “the biggest properties of the year will continue to be Transformers, Spider-Man and Star Wars.”

While the continuing strong performance of Hasbro’s board games was mentioned as a key contributor to the company’s Q1 success, the only mention of Wizards of the Coast was that Hasbro was going to continue to invest substantially in the Gleemax Website, which is designed to push WotC sales over the long term (see “Gleemax: WotC’s New Online Initiative”)