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Toymaker shares rise Thursday after rivals Hasbro and Mattel released quarterly results and made upbeat comments about how their intellectual property will boost their business.
Hasbro Shares of the toymaker soared more than 13% on Thursday report first quarter Revenue beat Wall Street expectations. The Monopoly board game maker reported net revenue of $1 billion, beating analysts’ average estimate of $878.4 million compiled by Refinitiv. Revenue fell 14% from $1.16 billion a year earlier.
The toymaker reported a first-quarter net loss of $22.1 million, or 16 cents a share, compared with a net profit of $61.2 million, or 44 cents a share, last year.
“First-quarter results exceeded our expectations and enabled Hasbro to meet our full-year financial goals,” Hasbro CEO Chris Cox said in a statement.
Other toy stocks, including Hasbro rivals Mattel and pop culture consumer companies Fengzi, also jumped on Thursday. Funko is preparing to report first-quarter earnings next week. Toymakers said this week that they will focus more on leveraging the popularity of major brands to expand their reach.
Barbie Maker Mattel Releases first quarter results That came after markets closed Wednesday beating revenue expectations but missing the bottom line of expectations. Mattel continues to face rising costs and falling demand for toys.
Overall, the toy industry has slowed since its pandemic-era highs, when parents rushed to buy toys to keep their new-home kids entertained. In the process, inflation has raised costs for toymakers such as Mattel — and consumers have largely put off spending as toy prices soar.
In a challenging toy and games market, both Hasbro and Mattel have set their sights on an increasingly intellectual-property-focused future.
On Monday, rival firms entered multi-year license agreement There will be co-branded toys and games using the two companies’ popular brands.
Hasbro will start producing a Barbie-branded Monopoly game starting in fall 2023, while Mattel will produce a Transformers-branded UNO game and Hot Wheels cars, slated for release in 2023 and 2024, respectively.
The two toymakers have battled for licensing rights in the past. In 2022, Mattel beat Hasbro to the license to produce toys based on the Disney princess line. Mattel previously lost Hasbro’s license in 2016.
In addition to their collaboration, both companies are making strides in expanding the reach of their own IPs as they gear up for big movie releases this summer.Hasbro’s Transformers: Rise of the Beasts from paramount Set for release on June 9, Mattel’s much-hyped “Barbie” movie comes from Warner Bros. Scheduled for release on July 21st.
Last fall, Hasbro’s board of directors Authorized Sales Process part of its entertainment assets. Cocks told CNBC on Thursday that the company is “satisfied with the progress” it has made so far, and said it will update in the second quarter.
“The global Hasbro team continues to execute on our strategy to unlock the value of our rich IP library across our growth priorities, including games, direct-to-consumer and licensing,” Cocks said in a statement related to Thursday’s earnings report. stated in the statement.
Hasbro’s entertainment segment revenue fell 19% year-over-year to $185.4 million in the first quarter from $227.5 million last year.
Meanwhile, analysts are looking at the impact, if any, of a Barbie movie starring Hollywood heavyweights Margot Robbie and Ryan Gosling on Mattel.
Mattel also announced that JJ Abrams’ production company, Bad Robot, will be working with the Warner Bros. Discovery Channel on a Hot Wheels movie. The company is also producing films for other brands, including Polly Pocket and Barney.
“As we continue to grow the toy side of the business, we are also developing a strategy to continue to see our intellectual property grow and capture value in incredible franchises outside of the toy aisle,” Mattel said. CEO Ynon Kreiz said in a statement. 2022 CNBC interview.
In past investor calls, Mattel executives noted A live-action movie like Barbie is unlikely to spark the same boost in toy sales as an animated film, meaning the movie’s possible success may not end up generating doll revenue for the toymaker.
In the first quarter, Dolls’ total billing, or the amount invoiced to customers, was $306 million. They were down year-over-year, in part because of lower sales of Barbie dolls; Barbie’s total worldwide revenue plummeted 41% in the first quarter.
Total doll sales were $396 million in the first quarter of last year, driven largely by growth in Barbie and Polly Pocket sales.
Mattel has yet to reveal its full plan to capitalize on the hype surrounding the Barbie movie. Previously, executives had said the company would announce a movie-related toy line that would appeal to children and collectors.