Hasbro reported that its Games and Puzzles sales declined 12% in Q1 to $200.4 million. Magic: The Gathering was an exception; the company reported that sales on the pre-eminent CCG line produced by Hasbro division Wizards of the Coast were actually up in Q1. Magic sales have been on a tear since 2009, and it’s impressive that WotC is still able to drive year over year sales increases (see “WotC, Magic Get a Shout Out” on Q1 2010 sales). Among more mass brands, Bop It, Cuponk, and Scrabble were also positively performing outliers.
The company had a generally lackluster quarter, with sales flat and profits down 71%. Sales declines in games were primarily seen in mass merchants, where Hasbro began reporting weakness in consumer demand in Q4 (see “Hasbro Reports Q4 Sales Decline”). Inventories were also high, although the company said its inventory increases were primarily in perennial products that it did not expect to have to write down. Girls and Preschool brands were also down by double digits, while Boys were up (see “Boys Toys Up at Hasbro”). The change in profit was driven by rapidly growing expenses, tied to product development cost, program production costs for its new Hub programming, and investment in emerging markets.