The Energon Pub

Hasbro has published their Q4 and year end earnings today. The boy toys category is where there was the greatest increase of revenue over last year and that was due to Star Wars, Nerf and Marvel. This is great since it offset the decrease in Transformers sales which is routine in a non movie year.

Here are the highlights:

2015 full-year net revenues increased 13%, absent a negative $394.5 million impact of foreign exchange; Including the impact of foreign exchange, revenues increased 4% to $4.45 billion;
2015 revenues grew in all major operating segments and regions, absent the impact of foreign exchange; Including the impact of foreign exchange, the U.S. and Canada segment revenues increased 10%, International segment revenues declined 3% and Entertainment and Licensing segment revenues increased 11%;
Boys, Preschool and Games category revenues increased both as reported and absent the impact of foreign exchange; Franchise Brand revenues increased 7% absent the impact of foreign exchange, but declined 2% including the impact of foreign exchange;
2015 operating profit increased 9% and net earnings increased 9% to $451.8 million or $3.57 per diluted share; Adjusted net earnings increased to $445.0 million or $3.51 per diluted share, excluding the sale of manufacturing operations;
In 2015 Hasbro returned $310.7 million of cash to shareholders; Generated $552.4 million in operating cash flow for the year.

Category Breakdown

Full-year 2015 Boys category revenues increased 20% to $1.78 billion. Franchise Brand NERF revenues increased along with STAR WARS, JURASSIC WORLD and MARVEL. This growth more than offset the decline in TRANSFORMERS, which faced difficult comparisons versus 2014's theatrical release of TRANSFORMERS: AGE OF EXTINCTION. The Boys category grew 30% absent the impact of foreign exchange.

About Foreign Exchange

For those wondering why the exchange is such a big deal in the highlights section, it's because a strong American dollar affects negatively on American companies selling products elsewhere in the world. For instance, looking at the Canadian exchange, the initial contracts were drawn up while the exchange was about the same or close. A deluxe Transformer toy priced at $17.99 will bring you back USD $17.99 in the US regardless, but in Canada, it would be priced the same $17.99 in Canadian dollars. With the American dollar getting stronger, that CDN $17.99 ends up becoming USD $12.94, thus lowering Hasbro's revenue (I am using retail prices, but we can extrapolate to the loss Hasbro has when retailers like Toysrus pay for the contracted amount later when the exchange is lower).

It's sort of sad that Transformers is doing badly compared to a pretty poor performance they had on Age of Extinction.

But it's like I often speculate - I just don't think RID is capturing people hearts as much as it might have.

If only it was possible to crunch the numbers to see if the over abundance of stuff aimed at say 7 year olds is a good thing or a bad thing.

I got the impression that they are still under-selling Rescue Bots compared to it's potential revenue so the younger end should be making more money.

I think if I had to guess (an it is just a guess) I would say they have lost some of the top end via dumbing down and the focus of the children who might be getting say 1 step changer or 3 step changers might actually be a lot smaller segment than you might think it should be if the younger kids gravitate to the Rescue Bots and the older kids don't want to be patronised by 3 step changers.

I expect if they made the 3 step slightly better toys the issues with them might be a bit less of a problem - but my personal opinion or thought is that perhaps those who buy a 3 step don't go out and buy a lot more of them - where as maybe they might buy more warriors.

But the problem with the entire RID line is it isn't sold like Transformers it's sold like Generic Action Figure brand number 200.

What I mean by that is that Transformers used to have a partial focus on new characters and variety and then a large chunk on "key characters"

Now it may as well be a Kenner Batman toyline with the majority being only random repaints of the same thing over and over (even if the toy is another character sometimes as with Combiner Wars or Minicons) but the main chunk is endless Optimus and Bumblebee.

Even when ROTF & DOTM when crzy bonkers for Bumblebee they did still make others too - RID-15/16 has a bit of a lack there though in my opinion at least.

Hopefully they can raise their game a bit once Hasbro's Star Wars mania dies down a bit.

RAR wrote:It's sort of sad that Transformers is doing badly compared to a pretty poor performance they had on Age of Extinction.

But it's like I often speculate - I just don't think RID is capturing people hearts as much as it might have.

RID is doing better than Prime did. Hasbro has gotten great sales on a non movie year, better than other years where there was only prime and generations.

william-james88 wrote:

RAR wrote:It's sort of sad that Transformers is doing badly compared to a pretty poor performance they had on Age of Extinction.

But it's like I often speculate - I just don't think RID is capturing people hearts as much as it might have.

RID is doing better than Prime did. Hasbro has gotten great sales on a non movie year, better than other years where there was only prime and generations.

I remember discussing this on another site back when Hasbro had their investor day. AoE didn't have particularly poor performance:

(Sorry for the compression. You can view the full-size here: http://news.tfw2005.com/2015/11/16/tfw2 ... 015-305388)

As you can see, AoE didn't make RotF money, but its earnings were in line with the other two films. You may be thinking about box office (which, like most sequels, did decrease) but box office and toy sales aren't as closely aligned as we might think. I like this chart because it shows how movie and non-movie years clearly have different baselines.

Also, to echo Will, note how well 2015 looked, considering that that's only the first 9 months (i.e. without Christmas).

Transformers didn't do as well last year? I thought they did great with Combiner Wars - I know I bought a lot more figures in 2015 than I normally get - and it was all CW, man....

Shockwave7 wrote:Transformers didn't do as well last year? I thought they did great with Combiner Wars - I know I bought a lot more figures in 2015 than I normally get - and it was all CW, man....

They did do great. They just didnt do as well as when there were movie toys, which is anticipated.