Hasbro share price soars as Transformers and Marvel toys drive sales

Joe Hall
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Hasbro's revenues rose five per cent in the first quarter (Source: Getty)

The figures

Hasbro's share price rose almost nine per cent on Monday as the toymaker beat profit, revenue and earnings forecasts.

In the minutes following the Nasdaq's opening bell, stock in the company, which owns the Monopoly and Transformers brands, shot to a price of over $71 per share.

First-quarter earnings for 2015 came in at 21 cents per share - smashing forecasts closer to 10 per cent, while net revenue rose five per cent to $713.5m, in spite of a strong dollar, which caused a negative currency impact of $62.6m. The company's operating profit rose 7.6 per cent to $54m.

Toys marked in the company's "Boys" category contributed the largest chunk of turnover, with franchise brands such as Transformers, Nerf and Marvel recording gains as well as preliminary shipments of Jurassic World toys ahead of the Universal film's forthcoming release.

Games such as Monopoly and Magic: The Gathering performed well but sales of Angry Birds products declined.

Why it's interesting

Despite the proliferation of tablet smartphone games made to keep today's youth entertained, Hasbro's latest results further demonstrate that you still can't beat a well-stocked toybox.

In fact, according to the Toy Industry Association in the US, domestic and international toy sales are steadily on the rise. That's likely to be the case for Hasbro this year too, as the first quarter has traditionally been the company's leanest of the year.

The toymaker is producing merchandise for a number of blockbuster films soon to be released in cinemas, including The Avengers: Age of Ultron, Star Wars: The Force Awakens, Jurassic World and Ant-Man.

Euromonitor's Matthew Hudak commented: "Many of the new movies coming out in 2015, like the new Star Wars, are just the beginning of a planned series of films that will be a strong source of licensing for years to come. In addition, major existing licensed properties will see new films released in the near future, such as the Frozen sequel Disney has already announced."

What Hasbro said

In 2015 there is a tremendous film slate we are supporting, headlined by The Avengers: Age of Ultron in theatres on 1 May and Star Wars: The Force Awakens on 18 December. These release dates are spread across a greater period of time versus last year's concentrated timing of summer releases. There are also several other notable films. including Jurassic World on 12 June, Ant-Man on 17 July and our own Jem and the Holograms on 23 October.

Our first quarter performance reinforces that our strategy and approach to brand-building is working. For the full-year, our teams are delivering innovative brands and executing against a robust entertainment slate, while facing a difficult foreign exchange environment.

- Hasbro president and chief executive Brian Goldner

In short

Collect $713.5m and advance to Q2, when Hasbro looks set to report even bigger revenues.

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