Sales in Hasbro’s "total gaming category" were up 14% in Q2, one of the few bright spots in a mostly down quarter. Both overall sales and profits declined substantially from the year ago period, but were still above expectations, pushing the stock up nearly 13% on Monday.Hasbro’s total gaming sales were $312.8 million for the quarter vs. $273.3 million in Q2 2017, with Magic: The Gathering (especially Dominaria) and Monopoly (especially Gamer Edition and Cheaters Edition) called out as notable contributors. Other contributors included Dungeons & Dragons, Duel Master, Jenga, and Don’t Step In It, the company said. Introductions included Don’t Lose Your Cool, Chow Crown, and Connect 4 Shots.
CEO Brian Goldner said both Magic: The Gathering and Dungeons & Dragons were adding new customers at double-digit rates. Goldner also reminded analysts that back in 2012, he’d noted that Magic had doubled to nearly $200 million in sales as of 2011 (see "’Magic’ the Largest Game Brand"), and that he thought it had the potential to double again.
Magic Arena has signed up over a million people for the closed beta, Goldner revealed, a sign that the new game will launch strong, presumably having an impact on sales of the tabletop game as well.
Hasbro’s overall sales for Q2 were down 7% due to the Toys 'R' Us liquidations around the world and even softer sales in Europe due to retail changes, the company said. U.S. and Canada sales were down 7% and international sales were down 11%. Those declines were only partially offset by a 26% increase in Entertainment and Licensing revenues, driven primarily by a change in accounting that allowed the company to book licensing revenues faster.
Profits were down 11% to $60.3 million for the quarter, from $67.7 million in the year ago period. Games are among Hasbro’s higher margin products; higher sales of Magic: The Gathering, D&D, and Duel Masters helped keep profits as strong as they were despite the declining overall sales, CFO Deborah Thomas said in the conference call.
Can 'Magic' Double Again?
Posted by Milton Griepp on July 24, 2018 @ 3:50 am CT
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