Hasbro CEO Brian Goldner told analysts Monday that the company (through its Wizards of the Coast division) is "just scratching the surface of the opportunity" with Magic: The Gathering, which was one of several bright spots in Hasbro’s financials for Q1. Overall, sales for the company were up 5% for the quarter, but would have been up 14% without the negative impact of a strengthening dollar. This is an acceleration in sales growth over the rate of increase in 2014 (see "Hasbro Reports Profitable Q4, Year"). Sales on the company’s "franchise" brands (which include Magic: The Gathering, My Little Pony, Transformers, and others) were up 20% in the period, the company reported.
Game sales were up 7% overall, with increases in sales on Magic and Monopoly partially offset by declining sales of Angry Birds games. Magic sales were up “double digits,” Goldner said in the conference call, as transcribed by Seeking Alpha. One reason for that was that the third release in the Khans block hit Q1, while the third release in the Theros block impacted Q2 sales last year.
But Goldner said that both sales and sell-through of Magic were growing, and emphasized the size of the remaining opportunity. "The engagement with fans and enthusiasts, the tournament play, and our effort and commitment to continue to improve the online experience with Magic: The Gathering is front and center at the company," he said. "It's something that we're investing in. We think Magic long term has incredible growth potential and we're just scratching the surface of the opportunity with that brand."
Sales in the Boys category were up 10%, while the Girls category was down 16%, behind tough comparisons to heavy Furby sales in the year ago period, and preschool was up 22%. Brands with sales increases included Marvel, behind early shipments of Avengers: Age of Ultron product; Jurassic World, and Star Wars. "The Marvel business is performing incredibly well in the first quarter," Goldner said. "Star Wars POS is up significantly in the first quarter behind both action figures and role play."
In Hasbro’s segments, which include U.S. and Canada, International, and Entertainment and Licensing, the big mover was sales in the Entertainment and Licensing category which were up 74% over the year ago period, driven in part by big licensing revenues related to a new deal with Netflix to make Hasbro’s shows available on the service.
Goldner confirmed that Akiva Goldsman is leading a group of writers developing a master plan for Transfomers (see "'Transformers' Are a Universe Too"). "We think there’s any number of stories to be told; that’s a brand that’s been around for 30 years with amazing canon and mythology," Goldner said. The next movie is expected in 2017.
Games, Entertainment Big Drivers at Hasbro
Posted by Milton Griepp on April 21, 2015 @ 1:15 am CT
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