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Hasbro Reports First Quarter 2018 Financial Results

Transformers News: Hasbro Reports First Quarter 2018 Financial Results

Monday, April 23rd, 2018 7:59AM CDT

Categories: Press Releases, Company News
Posted by: Va'al   Views: 15,285

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We received from Hasbro their report for the first quarter of 2018, regarding the company's faring during the Toys R Us troubles, and everything else taking place since the start of this financial year. The full text of the release can be found below, but if you're also interested in additional numbers, you can take a look here.

  • First quarter 2018 revenues decreased to $716.3 million due to the liquidation of Toys“R”Us and retail inventory overhang, primarily in Europe;
  • Reported net loss of $112.5 million or $0.90 per diluted share, includes after-tax expenses of $61.4 million associated with Toys“R”Us; $15.7 million of severance costs associated with an acceleration of the Company’s ongoing commercial organization transformation; and a net charge of $47.8 million related to U.S. tax reform (the “Non-GAAP Adjustments”);
  • Adjusted net earnings of $12.4 million or $0.10 per diluted share;
  • Ended the quarter with $1.6 billion in cash and returned $109.6 million to shareholders; $70.8 million in dividends and $38.8 million in share repurchases.

PAWTUCKET, R.I.--(BUSINESS WIRE)--Apr. 23, 2018-- Hasbro, Inc. (NASDAQ: HAS) today reported financial results for the first quarter 2018. Net revenues for the first quarter 2018 decreased 16% to $716.3 million versus $849.7 million in 2017. The decrease in revenues is the result of the liquidation of Toys“R”Us in the U.S. and U.K., along with uncertainty in its other operations, as well as retail inventory overhang, primarily in Europe.

Net loss for the first quarter 2018 was $112.5 million, or $0.90 per diluted share, compared to net earnings of $68.6 million, or $0.54 per diluted share, in 2017. Excluding the Non-GAAP Adjustments noted above, adjusted net earnings for the quarter were $12.4 million or $0.10 per diluted share. The first quarter 2018 was a 13-week period versus the first quarter 2017 which was a 14-week period.

“The Hasbro teams executed extremely well during a challenging first quarter,” said Brian Goldner, Hasbro’s chairman and chief executive officer. “Hasbro brands are resonating with consumers and consumer takeaway is positive. However, as we discussed earlier in the year, our first quarter was expected to be difficult. We are working to put the near-term disruption from Toys“R”Us behind us. Our global retailers view this as an opportunity in a key consumer category and are partnering with Hasbro to develop growth plans for our brands. New Hasbro initiatives shipping in this quarter and beyond won’t be caught up in the Toys“R”Us liquidation process. With the rapid shift to a converged retail environment, we accelerated plans we originally had spread throughout the year to transform our commercial organization on a more immediate basis.”

“Our underlying financial strength is sound, and despite the near-term challenges associated with a major customer liquidation, Hasbro is positioned to manage a challenging 2018 and drive growth in 2019 and beyond,” said Deborah Thomas, Hasbro’s chief financial officer. “The quarter’s revenue and profits were negatively impacted by lower revenues and higher expenses associated with events that do not reflect the health of our underlying business. We remain on track to meet our goal of generating $600 to $700 million in operating cash flow this year while investing to build our brands, transform our organization and return cash to shareholders.”

First Quarter 2018 Major Segment Performance



Net Revenues
($ Millions)


Operating Profit (Loss)
($ Millions)


Adjusted Operating
Profit (Loss) ($M)
Q1 2018 Q1 2017 % Change Q1 2018 Q1 2017 Q1 2018
U.S. and Canada $364.3 $451.6 -19% $(23.4) $64.8 $28.9
International $287.9 $345.3 -17% $(56.1) $0.5 $(44.9)
Entertainment and Licensing $64.0 $52.7 +21% $13.9 $11.3 $13.9


First quarter 2018 U.S. and Canada segment net revenues decreased 19% to $364.3 million compared to $451.6 million in 2017. The segment reported an operating loss of $23.4 million compared to an operating profit of $64.8 million in 2017. The segment’s first quarter performance reflected the Toys“R”Us liquidation both in lower revenues and $52.3 million of pre-tax expenses, primarily bad debt.

First quarter 2018 International segment net revenues were $287.9 million compared to $345.3 million in 2017. Revenues in the segment were negatively impacted by efforts to clear excess inventory in Europe, as well as the Toys“R”Us U.K. liquidation and uncertainty in its other international operations. International segment revenues include a favorable $19.5 million impact of foreign exchange. On a regional basis, Europe net revenues decreased 28%, Latin America increased 2% and Asia Pacific increased 3%. Emerging markets net revenues decreased 5% in the quarter. The International segment reported an operating loss of $56.1 million compared to an operating profit of $0.5 million in 2017. The decline in operating profit reflects lower revenues and includes $11.2 million of pre-tax expense associated with Toys“R”Us.

Entertainment and Licensing segment net revenues increased 21% to $64.0 million compared to $52.7 million in 2017. Operating profit increased 23% to $13.9 million, or 21.7% of net revenues, compared to $11.3 million, or 21.5% of net revenues, in 2017. Revenue growth was driven by consumer products and digital gaming. During the quarter, the Company adopted ASC 606 Revenue from Contracts with Customers which favorably impacted the timing of revenue recognition in the quarter.

Additional pre-tax expense of $7.0 million associated with Toys“R”Us and $17.3 million from accelerating the commercial organization transformation are included in the Corporate and Eliminations segment.

First Quarter 2018 Brand Portfolio Performance

Net Revenues ($ Millions)
Q1 2018 Q1 2017 % Change
Franchise Brands $361.7 $449.2 -19%
Partner Brands $200.6 $213.0 -6%
Hasbro Gaming* $105.2 $135.8 -22%
Emerging Brands $48.8 $51.8 -6%

*Hasbro’s total gaming category, including all gaming revenue, most notably MAGIC: THE GATHERING and MONOPOLY, which are included in Franchise Brands in the table above, totaled $203.5 million for the first quarter 2018, down 20%, versus $253.3 million for the first quarter 2017. Hasbro believes its gaming portfolio is a competitive differentiator and views it in its entirety.

First quarter 2018 revenues were negatively impacted across all Brand Portfolio categories by the liquidation of Toys“R”Us in the U.S. and U.K., along with uncertainty in its other operations, as well as retail inventory overhang, primarily in Europe.

First quarter 2018 Franchise Brand revenues decreased 19% to $361.7 million. Growth in MONOPOLY was offset by declines in all other Franchise Brands in the quarter. Franchise Brand revenues grew in the Entertainment and Licensing segment and declined in the U.S. and Canada and International segments.

Partner Brand revenues declined 6% to $200.6 million. Revenue growth in MARVEL and BEYBLADE was more than offset by declines in other Partner Brands. Partner Brand revenues increased slightly in the U.S. and Canada segment, but declined in the International segment.

Hasbro Gaming revenue decreased 22% to $105.2 million. Revenue gains in DUNGEONS AND DRAGONS, JENGA and several new game launches were offset by declines in other properties. Hasbro’s total gaming category was down 20% to $203.5 million. Hasbro Gaming revenues declined in all three major operating segments.

Emerging Brands revenue declined 6% to $48.8 million. Revenue increases from STRETCH ARMSTRONG and LITTLEST PET SHOP products were offset by declines in other Emerging Brands. Emerging Brands revenues grew in the Entertainment and Licensing segment and declined in the U.S. and Canada and International segments.

Dividend and Share Repurchase

The Company paid $70.8 million in cash dividends to shareholders during the first quarter 2018. The next quarterly cash dividend payment of $0.63 per common share is scheduled for May 15, 2018 to shareholders of record at the close of business on May 1, 2018.

During the first quarter, Hasbro repurchased 427.1 thousand shares of common stock at a total cost of $38.8 million and an average price of $90.81 per share. At quarter-end, $139.2 million remained available in the current share repurchase authorization.

Non-GAAP Adjustments

During the first quarter, the Company recorded lower revenues in part due to the loss of revenues from Toys“R”Us in the U.S. and Europe, as a result of the related liquidations as well as uncertainty in the other Toys“R”Us operations. In association with this, the Company recorded after-tax expenses of $61.4 million, primarily bad debt.

Hasbro also recorded $15.7 million of after tax expense associated with accelerating its commercial organization transformation. Over the past several years, the Company has invested in developing an omni-channel retail presence, and in 2018 is bringing onboard new skill sets and talent to lead in today’s converged retail environment. These actions were initially planned to occur over time, commencing later this year. Given the current retail environment the Company chose to accelerate its actions.

In 2017, the Company recognized a provisional net charge of $296.5 million from the U.S. Tax Cuts and Jobs Act. Additional changes and guidance issued since year end resulted in a first quarter 2018 charge of $47.8 million, or $0.38 per diluted share. This charge is related to an increase in the Company’s repatriation tax liability and a reversal of tax benefits no longer permitted under the new guidance. The Company expects its full-year underlying tax rate to be at the high end of its previously projected range of 15% to 17%.

Conference Call Webcast

Hasbro will webcast its first quarter 2018 earnings conference call at 8:30 a.m. Eastern Time today. To listen to the live webcast and access the accompanying presentation slides, please go to http://investor.hasbro.com. The replay of the call will be available on Hasbro’s web site approximately 2 hours following completion of the call.

About Hasbro: Hasbro (NASDAQ: HAS) is a global play and entertainment company committed to Creating the World's Best Play Experiences. From toys and games to television, movies, digital gaming and consumer products, Hasbro offers a variety of ways for audiences to experience its iconic brands, including NERF, MY LITTLE PONY, TRANSFORMERS, PLAY-DOH, MONOPOLY, BABY ALIVE and MAGIC: THE GATHERING, as well as premier partner brands. Through its entertainment labels, Allspark Pictures and Allspark Animation, the Company is building its brands globally through great storytelling and content on all screens. Hasbro is committed to making the world a better place for children and their families through corporate social responsibility and philanthropy. Hasbro ranked No. 1 on the 2017 100 Best Corporate Citizens list by CR Magazine, and has been named one of the World’s Most Ethical Companies® by Ethisphere Institute for the past seven years. Learn more at www.hasbro.com, and follow us on Twitter (@Hasbro & @HasbroNews) and Instagram (@Hasbro).

© 2018 Hasbro, Inc. All Rights Reserved.

Certain statements in this release contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include expectations concerning the Company’s potential performance in the future and the Company’s ability to achieve its financial and business goals and may be identified by the use of forward-looking words or phrases. The Company's actual actions or results may differ materially from those expected or anticipated in the forward-looking statements due to both known and unknown risks and uncertainties. Specific factors that might cause such a difference include, but are not limited to: (i) the Company's ability to design, develop, produce, manufacture, source and ship products on a timely and cost-effective basis, as well as interest in and purchase of those products by retail customers and consumers in quantities and at prices that will be sufficient to recover the Company’s costs and earn a profit; (ii) downturns in economic conditions impacting one or more of the markets in which the Company sells products, such as the economic downturns which impacted the United Kingdom and Brazil in 2017, which can negatively impact the Company’s retail customers and consumers, and which can result in lower employment levels, lower consumer disposable income, lower retailer inventories and lower spending, including lower spending on purchases of the Company’s products; (iii) other factors which can lower discretionary consumer spending, such as higher costs for fuel and food, drops in the value of homes or other consumer assets, and high levels of consumer debt; (iv) consumer interest in entertainment properties, such as motion pictures, for which the Company is developing and marketing products, and the ability to drive sales of products associated with such entertainment properties, (v) potential difficulties or delays the Company may experience in implementing cost savings and efficiency enhancing initiatives; (vi) other economic and public health conditions or regulatory changes in the markets in which the Company and its customers and suppliers operate which could create delays or increase the Company’s costs, such as higher commodity prices, labor costs or transportation costs, or outbreaks of disease; (vii) currency fluctuations, including movements in foreign exchange rates, which can lower the Company’s net revenues and earnings, and significantly impact the Company’s costs; (viii) the concentration of the Company's customers, potentially increasing the negative impact to the Company of difficulties experienced by any of the Company’s customers or changes in their purchasing or selling patterns; (ix) consumer interest in and acceptance of the Discovery Family Channel, and programming created by Hasbro Studios, and other factors impacting the financial performance of the network and Hasbro Studios; (x) the inventory policies of the Company’s retail customers, including retailers’ potential decisions to lower their inventories, even if it results in lost sales, as well as the concentration of the Company's revenues in the second half and fourth quarter of the year, which coupled with reliance by retailers on quick response inventory management techniques increases the risk of underproduction of popular items, overproduction of less popular items and failure to achieve compressed shipping schedules; (xi) delays, increased costs or difficulties associated with any of our or our partners’ planned digital applications or media initiatives; (xii) work disruptions, which may impact the Company's ability to manufacture or deliver product in a timely and cost-effective manner; (xiii) the bankruptcy or other lack of success of one of the Company's significant retailers, such as the bankruptcy of Toys“R”Us in the United States and Canada in the fourth quarter of 2017 and the beginning of liquidation of those businesses, as well as economic difficulty of Toys“R”Us in other markets, which could negatively impact the Company's revenues or bad debt exposure; (xiv) the impact of competition on revenues, margins and other aspects of the Company's business, including the ability to offer Company products which consumers choose to buy instead of competitive products, the ability to secure, maintain and renew popular licenses and the ability to attract and retain talented employees; (xv) concentration of manufacturing for many of the Company’s products in the People’s Republic of China and the associated impact to the Company of social, economic or public health conditions and other factors affecting China, the movement of products into and out of China, the cost of producing products in China and exporting them to other countries, including without limitation, the potential application of tariffs to products the Company purchases from vendors in China, which would significantly increase the price of the Company’s products and harm sales; (xvi) the risk of product recalls or product liability suits and costs associated with product safety regulations; (xvii) the impact of other market conditions, third party actions or approvals and competition which could reduce demand for the Company’s products or delay or increase the cost of implementation of the Company's programs or alter the Company's actions and reduce actual results; (xviii) changes in tax laws or regulations, or the interpretation and application of such laws and regulations, such as what may occur as the U.S. Tax Cuts and Jobs Act is interpreted and applied, which may cause the Company to alter tax reserves or make other changes which significantly impact its reported financial results; (xix) the impact of litigation or arbitration decisions or settlement actions; and (xx) other risks and uncertainties as may be detailed from time to time in the Company's public announcements and Securities and Exchange Commission (“SEC”) filings. The Company undertakes no obligation to make any revisions to the forward-looking statements contained in this release or to update them to reflect events or circumstances occurring after the date of this release.

This press release includes non-GAAP financial measures as defined under SEC rules, specifically Adjusted net earnings and adjusted earnings per diluted share, excluding the impact of charges associated with the Toys“R”Us liquidation; severance costs and U.S. tax reform in the first quarter of 2018, as well as adjusted operating profit absent the impact of the charges associated with the Toys“R”Us liquidation and severance costs. Also included in the financial tables attached to this release are the non-GAAP financial measures of EBITDA and Adjusted EBITDA. EBITDA represents net earnings attributable to Hasbro, Inc. excluding interest expense, income taxes, depreciation and amortization. Adjusted EBITDA also excludes the impact of charges associated with the Toys“R”Us liquidation and severance costs in the first quarter of 2018. As required by SEC rules, we have provided reconciliation on the attached schedule of these measures to the most directly comparable GAAP measure. Management believes that Adjusted net earnings, Adjusted earnings per diluted share and adjusted operating profit absent the impact of charges associated with the Toys“R”Us liquidation and severance costs in the first quarter of 2018 provides investors with an understanding of the underlying performance of the Company’s business absent these unusual events. Management believes that EBITDA and Adjusted EBITDA are appropriate measures for evaluating the operating performance of the Company because they reflect the resources available for strategic opportunities including, among others, to invest in the business, strengthen the balance sheet and make strategic acquisitions. These non-GAAP measures should be considered in addition to, not as a substitute for, or superior to, net earnings or other measures of financial performance prepared in accordance with GAAP as more fully discussed in the Company's financial statements and filings with the SEC. As used herein, "GAAP" refers to accounting principles generally accepted in the United States of America.

HAS-E
Credit(s): Hasbro

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Re: Hasbro Reports First Quarter 2018 Financial Results (1955433)
Posted by Aimless Misfire on April 23rd, 2018 @ 10:06am CDT
Whatever! I don't care anymore. After what happened with Titans Return wave 5 I'm pretty much done with Hasbro. I can no longer go into a store & find anything but empty pegs so I'm moving on. Misfire is my favorite character from Titans Return & I never ever saw him in any store not even once. To me that is 100% unacceptable! I can understand a figure being hard to find but if they're going to make it impossible then I'm not playing anymore.
Re: Hasbro Reports First Quarter 2018 Financial Results (1955484)
Posted by Cheetron on April 23rd, 2018 @ 1:13pm CDT
I'm done looking in stores. Empty pegs everywhere. I have barely seen anything new since tlk, oh, the wave before cogman. Now it's pop and poor distribution. It's not the stores. They order and get none or wave 1 deluxes.
Re: Hasbro Reports First Quarter 2018 Financial Results (1955714)
Posted by LevelRage on April 23rd, 2018 @ 11:55pm CDT
It'd probably help them if they'd keep their own online store stocked with the figures people wanted, such as Cogman and Studio Series (out of stock). You'd think Hasbro would put their own store in front of others.
Re: Hasbro Reports First Quarter 2018 Financial Results (1956881)
Posted by WreckerJack on April 30th, 2018 @ 12:07am CDT
They should learn from ToysRus's mistake and give the fans what they want to buy.
Re: Hasbro Reports First Quarter 2018 Financial Results (1973596)
Posted by Va'al on July 24th, 2018 @ 8:08am CDT
In amidst of all the consumer news out this past weekend, there was also some big investor news from Hasbro out of their second quarter conference call, which dealt with the closing of Toys R Us among the usual factors (and the subsequent stock move up 13%), and the move of production definitely out of China. All of the information can be seen in the official press release below, but you can follow the links above for some additional thoughts on those two points in particular!

Second quarter 2018 revenues of $904.5 million;
U.S. and Canada segment revenues down 7%; International segment revenues down 11%; Entertainment and Licensing revenues up 26%;
Operating profit margin of 9.7%;
Reported net earnings of $60.3 million, or $0.48 per diluted share;
Strengthened brand portfolio with acquisition of POWER RANGERS;
Ended the quarter with $1.2 billion in cash and returned $152.8 million to shareholders; $78.7 million in dividends and $74.1 million in share repurchases.

PAWTUCKET, R.I.--(BUSINESS WIRE)--Jul. 23, 2018-- Hasbro, Inc. (NASDAQ: HAS) today reported financial results for the second quarter 2018. Net revenues for the second quarter 2018 decreased 7% to $904.5 million versus $972.5 million in 2017. The lower revenues reflect the liquidation of Toys“R”Us in the U.S. and many other global markets. In addition, revenues declined internationally, most notably in Europe, as a result of managing retail inventory amid a rapidly evolving retail landscape.

Net earnings for the second quarter 2018 were $60.3 million, or $0.48 per diluted share, compared to $67.7 million, or $0.53 per diluted share, for the second quarter of 2017.

“2018 is unfolding as expected as our teams manage the liquidation of Toys“R”Us in many markets and address the rapidly evolving European retail landscape,” said Brian Goldner, Hasbro’s chairman and chief executive officer. “We are investing in our business - in innovation, entertainment and a modern global commercial organization, to drive profitable growth in 2019 and beyond. Consumer takeaway is up for our brands, and we further strengthened our brand portfolio through the acquisition of POWER RANGERS. We are focused on moving beyond the near-term disruption of losing a major customer, with a clear path forward including new retailer activations to meet the consumer demand made available by the Toys“R”Us departure.”

“Our global teams executed well despite the disruption in the market,” said Deborah Thomas, Hasbro’s chief financial officer. “With $1.2 billion in cash, and a healthy balance sheet, our financial position is strong. Our diverse portfolio enabled us to partially offset the negative margin impact from lower revenues, but not entirely. We are working with our retailers to successfully execute their plans for Hasbro’s innovative portfolio this holiday season.”

Second Quarter 2018 Major Segment Performance

Net Revenues ($ Millions) Operating Profit ($ Millions)
Q2 2018 Q2 2017 % Change Q2 2018 Q2 2017 % Change
U.S. and Canada $459.3 $494.4 -7% $76.2 $81.6 -7%
International $380.4 $426.6 -11% $0.2 $16.9 -99%
Entertainment and Licensing $64.7 $51.5 +26% $18.6 $11.3 +64%


Second quarter 2018 U.S. and Canada segment net revenues decreased 7% to $459.3 million compared to $494.4 million in 2017. The segment reported an operating profit of $76.2 million, or 16.6% of net revenues, compared to an operating profit of $81.6 million, or 16.5% of net revenues, in 2017. The segment’s quarterly performance was negatively impacted by the loss of Toys“R”Us revenues and the near-term disruption of its stores’ liquidation in the marketplace. Favorable product mix helped offset the negative impact of lower revenues on operating profit margin.

Second quarter 2018 International segment net revenues were $380.4 million, down 11%, compared to $426.6 million in 2017. Revenues in the segment were negatively impacted by efforts to clear excess retail inventory in Europe, as well as the loss of Toys“R”Us revenues in many Europe and Asia Pacific markets. International segment revenues include a favorable $2.6 million impact of foreign exchange. On a regional basis, Europe net revenues decreased 16%, Latin America decreased 3% and Asia Pacific decreased 5%. Emerging markets net revenues decreased 9% in the quarter. The International segment reported an operating profit of $0.2 million compared to an operating profit of $16.9 million in 2017. The decline in operating profit reflects lower revenues combined with fixed cost deleveraging.

Entertainment and Licensing segment net revenues increased 26% to $64.7 million compared to $51.5 million in 2017. Operating profit increased 64% to $18.6 million, or 28.8% of net revenues, compared to $11.3 million, or 22.0% of net revenues, in 2017. The adoption of ASC 606 Revenue from Contracts with Customers favorably impacted the timing of revenue recognition in the quarter, in addition to the continued underlying success in our licensing and entertainment businesses.

Second Quarter 2018 Brand Portfolio Performance




Net Revenues ($ Millions)
Q2 2018 Q2 2017 % Change

Six Months
2018


Six Months
2017
% Change
Franchise Brands $506.5 $552.4 -8% $868.2 $1,001.6 -13%
Partner Brands $208.0 $230.0 -10% $408.6 $443.0 -8%
Hasbro Gaming* $134.3 $133.9 -- $239.5 $269.6 -11%
Emerging Brands $55.6 $56.2 -1% $104.5 $108.0 -3%

*Hasbro’s total gaming category, including all gaming revenue, most notably MAGIC: THE GATHERING and MONOPOLY, which are included in Franchise Brands in the table above, totaled $312.8 million for the second quarter 2018, up 14%, versus $273.3 million in the second quarter 2017.This category was down 2% to $516.3 million for the six months 2018 versus $526.6 million for the six months 2017.Hasbro believes its gaming portfolio is a competitive differentiator and views it in its entirety.

Second quarter 2018 revenues were negatively impacted by the liquidation of Toys“R”Us in the U.S. and many other global markets, including lower Toys“R”Us revenues and the near-term disruption of its stores’ liquidation in the marketplace, as well as managing retail inventory, primarily in Europe.

Second quarter 2018 Franchise Brand revenues decreased 8% to $506.5 million. Growth in MAGIC: THE GATHERING, MONOPOLY and BABY ALIVE were offset by declines in the other Franchise Brands in the quarter, including TRANSFORMERS which declined versus the movie launch in the second quarter 2017. Franchise Brand revenues grew in the Entertainment and Licensing segment and declined in the U.S. and Canada and International segments.

Partner Brand revenues declined 10% to $208.0 million. Revenue growth in BEYBLADE and MARVEL was more than offset by declines in other Partner Brands. Partner Brand revenues decreased in the U.S. and Canada and International segments.

Hasbro Gaming revenue increased slightly to $134.3 million. Revenue gains in DUNGEONS and DRAGONS, DUEL MASTER, JENGA and DON’T STEP IN IT were partially offset by declines in other properties. Hasbro Gaming revenues increased in the International segment and the Entertainment and Licensing segment; but declined in the U.S. and Canada segment. Hasbro’s total gaming category was up 14% to $312.8 million, including growth in MAGIC: THE GATHERING and MONOPOLY.

Emerging Brand revenue declined 1% to $55.6 million. The category benefited from several new initiatives, including LOST KITTIES and LOCK STARS. This was offset by declines in other Emerging Brands. Emerging Brands revenues grew in the International segment and declined in the U.S. and Canada segment and the Entertainment and Licensing segment.

Dividend and Share Repurchase

The Company paid $78.7 million in cash dividends to shareholders during the second quarter 2018. The next quarterly cash dividend payment of $0.63 per common share is scheduled for August 15, 2018 to shareholders of record at the close of business on August 1, 2018.

During the second quarter, Hasbro repurchased 820,343 shares of common stock at a total cost of $74.1 million and an average price of $90.33 per share. Through the first six months of 2018, the Company repurchased 1.2 million shares of common stock at a total cost of $112.9 million and an average price of $90.50. At quarter-end, $565.1 million remained available in the current share repurchase authorizations, including the additional $500 million authorized by the Board of Directors during the second quarter.

Conference Call Webcast

Hasbro will webcast its second quarter 2018 earnings conference call at 8:30 a.m. Eastern Time today. To listen to the live webcast and access the accompanying presentation slides, please go to http://investor.hasbro.com. The replay of the call will be available on Hasbro’s web site approximately 2 hours following completion of the call.

About Hasbro: Hasbro (NASDAQ: HAS) is a global play and entertainment company committed to Creating the World's Best Play Experiences. From toys and games to television, movies, digital gaming and consumer products, Hasbro offers a variety of ways for audiences to experience its iconic brands, including NERF, MY LITTLE PONY, TRANSFORMERS, PLAY-DOH, MONOPOLY, BABY ALIVE and MAGIC: THE GATHERING, as well as premier partner brands. Through its entertainment labels, Allspark Pictures and Allspark Animation, the Company is building its brands globally through great storytelling and content on all screens. Hasbro is committed to making the world a better place for children and their families through corporate social responsibility and philanthropy. Hasbro ranked No. 1 on the 2017 100 Best Corporate Citizens list by CR Magazine and has been named one of the World’s Most Ethical Companies® by Ethisphere Institute for the past seven years. Learn more at www.hasbro.com and follow us on Twitter (@Hasbro & @HasbroNews) and Instagram (@Hasbro).

© 2018 Hasbro, Inc. All Rights Reserved.

Certain statements in this release contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include expectations concerning the Company’s potential performance in the future and the Company’s ability to achieve its financial and business goals and may be identified by the use of forward-looking words or phrases. The Company's actual actions or results may differ materially from those expected or anticipated in the forward-looking statements due to both known and unknown risks and uncertainties. Specific factors that might cause such a difference include, but are not limited to: (i) the Company's ability to design, develop, produce, manufacture, source and ship products on a timely and cost-effective basis, as well as interest in and purchase of those products by retail customers and consumers in quantities and at prices that will be sufficient to recover the Company’s costs and earn a profit; (ii) downturns in economic conditions impacting one or more of the markets in which the Company sells products, such as the economic downturns which impacted the United Kingdom and Brazil in 2017, which can negatively impact the Company’s retail customers and consumers, and which can result in lower employment levels, lower consumer disposable income, lower retailer inventories and lower spending, including lower spending on purchases of the Company’s products; (iii) other factors which can lower discretionary consumer spending, such as higher costs for fuel and food, drops in the value of homes or other consumer assets, and high levels of consumer debt; (iv) consumer interest in entertainment properties, such as motion pictures, for which the Company is developing and marketing products, and the ability to drive sales of products associated with such entertainment properties; (v) potential difficulties or delays the Company may experience in implementing cost savings and efficiency enhancing initiatives; (vi) other economic and public health conditions or regulatory changes in the markets in which the Company and its customers and suppliers operate which could create delays or increase the Company’s costs, such as higher commodity prices, labor costs or transportation costs, or outbreaks of disease; (vii) currency fluctuations, including movements in foreign exchange rates, which can lower the Company’s net revenues and earnings, and significantly impact the Company’s costs; (viii) the concentration of the Company's customers, potentially increasing the negative impact to the Company of difficulties experienced by any of the Company’s customers or changes in their purchasing or selling patterns; (ix) consumer interest in and acceptance of the Discovery Family Channel, and programming created by Hasbro Studios, and other factors impacting the financial performance of the network and Hasbro Studios; (x) the inventory policies of the Company’s retail customers, including retailers’ potential decisions to lower their inventories, even if it results in lost sales, as well as the concentration of the Company's revenues in the second half and fourth quarter of the year, which coupled with reliance by retailers on quick response inventory management techniques increases the risk of underproduction of popular items, overproduction of less popular items and failure to achieve compressed shipping schedules; (xi) delays, increased costs or difficulties associated with any of our or our partners’ planned digital applications or media initiatives; (xii) work disruptions, which may impact the Company's ability to manufacture or deliver product in a timely and cost-effective manner; (xiii) the bankruptcy or other lack of success of one of the Company's significant retailers, such as the bankruptcy of Toys“R”Us in the United States and Canada in the fourth quarter of 2017 and the beginning of liquidation of those businesses, as well as economic difficulty of Toys“R”Us in other markets, which could negatively impact the Company's revenues or bad debt exposure; (xiv) the impact of competition on revenues, margins and other aspects of the Company's business, including the ability to offer Company products which consumers choose to buy instead of competitive products, the ability to secure, maintain and renew popular licenses and the ability to attract and retain talented employees; (xv) concentration of manufacturing for many of the Company’s products in the People’s Republic of China and the associated impact to the Company of social, economic or public health conditions and other factors affecting China, the movement of products into and out of China, the cost of producing products in China and exporting them to other countries, including without limitation, the potential application of tariffs to products the Company purchases from vendors in China, which would significantly increase the price of the Company’s products and harm sales; (xvi) the risk of product recalls or product liability suits and costs associated with product safety regulations; (xvii) the impact of other market conditions, third party actions or approvals and competition which could reduce demand for the Company’s products or delay or increase the cost of implementation of the Company's programs or alter the Company's actions and reduce actual results; (xviii) changes in tax laws or regulations, or the interpretation and application of such laws and regulations, such as what may occur as the U.S. Tax Cuts and Jobs Act is interpreted and applied, which may cause the Company to alter tax reserves or make other changes which significantly impact its reported financial results; (xix) the impact of litigation or arbitration decisions or settlement actions; and (xx) other risks and uncertainties as may be detailed from time to time in the Company's public announcements and Securities and Exchange Commission (“SEC”) filings. The Company undertakes no obligation to make any revisions to the forward-looking statements contained in this release or to update them to reflect events or circumstances occurring after the date of this release.

The financial tables accompanying this press release include non-GAAP financial measures as defined under SEC rules, specifically Adjusted net earnings and Adjusted earnings per diluted share, excluding the impact of charges associated with the Toys“R”Us liquidation; severance costs and U.S. tax reform in the first quarter of 2018, as well as Adjusted operating profit absent the impact of the charges associated with the Toys“R”Us liquidation and severance costs. Also included in the financial tables are the non-GAAP financial measures of EBITDA and Adjusted EBITDA. EBITDA represents net earnings attributable to Hasbro, Inc. excluding interest expense, income taxes, depreciation and amortization. Adjusted EBITDA also excludes the impact of charges associated with the Toys“R”Us liquidation and severance costs in the first quarter of 2018. As required by SEC rules, we have provided reconciliations on the attached schedules of these measures to the most directly comparable GAAP measure. Management believes that Adjusted net earnings, Adjusted earnings per diluted share and Adjusted operating profit absent the impact of charges associated with the Toys“R”Us liquidation and severance costs in the first quarter of 2018 provides investors with an understanding of the underlying performance of the Company’s business absent these unusual events. Management believes that EBITDA and Adjusted EBITDA are appropriate measures for evaluating the operating performance of the Company because they reflect the resources available for strategic opportunities including, among others, to invest in the business, strengthen the balance sheet and make strategic acquisitions. These non-GAAP measures should be considered in addition to, not as a substitute for, or superior to, net earnings or other measures of financial performance prepared in accordance with GAAP as more fully discussed in the Company's financial statements and filings with the SEC. As used herein, "GAAP" refers to accounting principles generally accepted in the United States of America.

HAS-E
Re: Hasbro Reports First Quarter 2018 Financial Results (1973606)
Posted by no-one on July 24th, 2018 @ 8:53am CDT
So if they're moving production out of China, does that mean less cheap KOs?
Re: Hasbro Reports First Quarter 2018 Financial Results (1973607)
Posted by no-one on July 24th, 2018 @ 8:54am CDT
Dang slow mobile double post.
Re: Hasbro Reports First Quarter 2018 Financial Results (1973638)
Posted by Flashwave on July 24th, 2018 @ 10:42am CDT
carytheone wrote:So if they're moving production out of China, does that mean less cheap KOs?


Thats an Interesting question, but I doubt it. It may depend on what moves and where. the first link says "Back Stateside" and the others just say "Out of China." the Model Train Manufacturers have been going to Vietnam I believe, so the Toy Makers may follow suit.
Re: Hasbro Reports First Quarter 2018 Financial Results (1973660)
Posted by Va'al on July 24th, 2018 @ 12:06pm CDT
Flashwave wrote:
carytheone wrote:So if they're moving production out of China, does that mean less cheap KOs?


Thats an Interesting question, but I doubt it. It may depend on what moves and where. the first link says "Back Stateside" and the others just say "Out of China." the Model Train Manufacturers have been going to Vietnam I believe, so the Toy Makers may follow suit.


Vietnam has been the location for a while now, so I'd agree with this.
Re: Hasbro Reports First Quarter 2018 Financial Results (1973730)
Posted by Emerje on July 24th, 2018 @ 3:21pm CDT
Yeah, Hasbro has been using Vietnam for Transformers for a few years now. I'm curious if they're going to move the storage of their molds out of China as well since they're still having reissues produced there (like the current run of Walmart exclusives).

And before people jump on the decline in Transformers sales as proof that the franchise is failing, this is compared to last year when The Last Knight was in theaters and sales are always higher when there's a movie. Sales would be up this year, too, if it weren't for the failure that was Solo taking they're summer slot instead of their usual winter slots forcing Bumblebee to move to December throwing everything off. I'm sure they're slightly regretting the move since they could have probably destroyed Solo. Revenue will be up again next year regardless.

Emerje
Re: Hasbro Reports First Quarter 2018 Financial Results (1983690)
Posted by Va'al on September 13th, 2018 @ 9:12am CDT
We have news of a big shift and appointment over at Hasbro, as we see the promotion of Samantha Lomow to head of Hasbro Entertainment and John Berkowitz to Hasbro Brands, both still operating under John Frascotti, President and COO of the company. The full press release can be found here, and copied below, but what is worth noting is that Lomow has been working on Transformers since Armada and even had the Transformers Animated character Slo-Mo named after her- so we wish her all the best with her expanded duties and role!

Samantha Lomow promoted to President, Hasbro Entertainment Brands; Jonathan Berkowitz promoted to President, Hasbro Brands


PAWTUCKET, R.I.—Hasbro, Inc. (NASDAQ: HAS) today announced the promotion of Samantha Lomow to President, Hasbro Entertainment Brands, and Jonathan Berkowitz to President, Hasbro Brands. Both leaders will continue to report to John Frascotti, Hasbro President and Chief Operating Officer.

“Samantha and Jonathan are exceptional leaders, passionate about innovation and dedicated to our mission to create the world’s best play experiences,” said Frascotti. “We are confident that in their new roles, they will help us accelerate the momentum behind our business and brands.”

During her 18-year tenure at the company, Ms. Lomow has played a tremendous role in growing Hasbro brands and expanding them beyond the toy space. She has been instrumental in the TRANSFORMERS franchise since the first movie in 2007, and she helped bring MY LITTLE PONY to the big screen for the first time.

In her new role, she will be responsible for leading all of Hasbro’s current, new and vault entertainment-driven, story-led brands. This includes oversight for MY LITTLE PONY, TRANSFORMERS and POWER RANGERS, among others, and continuing to partner with Allspark on emerging entertainment brands. She will also continue to lead Hasbro’s strategic partner portfolio, including relationships with The Walt Disney Company, Universal, Nickelodeon, Sesame Workshop and Blizzard Entertainment.

In his 15 years at Hasbro, Mr. Berkowitz has led a number of brands across the portfolio, including NERF, which he led to its Franchise Brand status in 2011. Most recently, he has overseen the Hasbro Gaming portfolio, which has grown significantly under his leadership with new products and brands, as well as reimagined classics. He has also been instrumental in rolling out the Company’s Quick Strike approach, which has become an important differentiator for Hasbro in getting trends and new product ideas to market in record time.

In his new role, Mr. Berkowitz will oversee the Hasbro Gaming portfolio, including MONOPOLY, as well as NERF, PLAY-DOH, BABY ALIVE, FURREAL, and initiatives driven by the Quick Strike team, among others. He will also manage all new and vault brands not driven by entertainment.

About Hasbro

Hasbro (NASDAQ: HAS) is a global play and entertainment company committed to Creating the World's Best Play Experiences. From toys and games to television, movies, digital gaming and consumer products, Hasbro offers a variety of ways for audiences to experience its iconic brands, including NERF, MY LITTLE PONY, TRANSFORMERS, PLAY-DOH, MONOPOLY, BABY ALIVE and MAGIC: THE GATHERING, as well as premier partner brands. Through its entertainment labels, Allspark Pictures and Allspark Animation, the Company is building its brands globally through great storytelling and content on all screens. Hasbro is committed to making the world a better place for children and their families through corporate social responsibility and philanthropy. Hasbro ranked No. 5 on the 2018 100 Best Corporate Citizens list by CR Magazine and has been named one of the World’s Most Ethical Companies® by Ethisphere Institute for the past seven years. Learn more at www.hasbro.com, and follow us on Twitter (@Hasbro & @HasbroNews) and Instagram (@Hasbro).

© 2018 Hasbro, Inc. All Rights Reserved.
Re: Hasbro Reports First Quarter 2018 Financial Results (1983710)
Posted by Dr. Caelus on September 13th, 2018 @ 12:00pm CDT
*Cue triggered misogynists whinging about a woman being promoted to a leadership role.*
Re: Hasbro Reports First Quarter 2018 Financial Results (1983715)
Posted by Bumblevivisector on September 13th, 2018 @ 12:09pm CDT
"She has been instrumental in the TRANSFORMERS franchise since the first movie in 2007, and she helped bring MY LITTLE PONY to the big screen for the first time."

The official press release seems to have forgotten about the 1986 MLP movie. According to Wikipedia it was only in 421 theaters and tanked so hard it took down a potential Jem movie and helped send G.I.Joe the Movie straight to video, but that was the actual first time the ponies hit the big screen.

Our golden age of toy franchises was so brief and fleeting. In hindsight, we were lucky TF:TM got made at all.
Re: Hasbro Reports First Quarter 2018 Financial Results (1983758)
Posted by Acolyte on September 13th, 2018 @ 5:16pm CDT
Time for Mr. Berkowitz to get HOT on the gaming piece. And I'm not talking Freemium games for mobile, as much as I do enjoy TF:EW and TF:FTF. Where the hell have the console games been since FOC? Where is the vision? This is a criminal failure to capitalize on a massively suitable-for-console IP.

There should be a Triple Threat play in motion in Hasbro every day, 24/7/365: Toy sales, movie licensing, video games. A weakness on any of these three is a weakness in the brand. Help save our collective entertainment consciousness and get a major studio into play and releasing trailers at CES/SXSW or whatever STAT.
Re: Hasbro Reports First Quarter 2018 Financial Results (1983896)
Posted by Coptur on September 14th, 2018 @ 10:13am CDT
Caelus wrote:*Cue triggered misogynists whinging about a woman being promoted to a leadership role.*



I would hope it was on merit

and not just because she is a woman due do some affirmative action or percentage quotas!
>:oP
Re: Hasbro Reports First Quarter 2018 Financial Results (1989796)
Posted by fenrir72 on October 18th, 2018 @ 11:44pm CDT
Some investors are reportedly planing to file a lawsuit on the corporate suits at HB for misleading the investors/shareholders of Hbs actual financial standing. Were the profit figures (in the black?) or is Hb actually in the red?

Given how the Star Wars franchise (a Hb exclusive last I heard)has under performed with inventories piling up............this might have punched an Optimus Prime semi trailer scale into their profit margins :(

http://www.providencejournal.com/news/2 ... rm-layoffs

https://www.wpri.com/business-news/amid ... 1530857102

www.golocalprov.com/news/hasbro-to-make ... it-pending

https://www.marketwatch.com/press-relea ... 2018-10-02
Re: Hasbro Reports First Quarter 2018 Financial Results (1989810)
Posted by Va'al on October 19th, 2018 @ 3:19am CDT
We're getting news, alongside the quarterly investor calls and reports, that Hasbro seems to be having some issue at the moment, on a number of fronts.

According to a number of source, including the WPRI and the Providence Journal, there are indeed some 'difficult changes' happening over at the toy maker's, meaning that - despite no official confirmation - there may be some layoffs happening in the coming period (not ideal, given the holiday season approaching, and way too similar to the Toys R Us situation last year).

While the company won't confirm layoffs, Hasbro said Wednesday it is making "meaningful organizational changes" that will affect "a single-digit percentage" of its global workforce.

The Providence-based toymaker sent a statement to Eyewitness News after inquiries about possible layoffs at the company.

"While some of these changes are difficult, we must ensure we have the right teams in place with the right capabilities to lead the company into the future," spokeswoman Julie Duffy said in a statement. "We continue to add new capabilities based on our understanding of the consumer and how our retailers are going to market, while evolving the way we organize our business across our Brand Blueprint."


This, however, also follows what seems to be an investor lawsuit, conducted by Pomerantz Law Firm, concerning 'whether Hasbro and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices'. This apparently relates back to the financial report from last October, too.

The announcement of Hasbro making changes comes a day after Pomerantz Law Firm said that it is investigating claims on behalf of investors of Hasbro, Inc. as to whether Hasbro and certain of its officers and/or directors "have engaged in securities fraud or other unlawful business practices."

"The claims have no merit and we intend to vigorously defend against them," said Duffy and that the staff cuts are unrelated.

According to reports, in October of 2017 Hasbro said they saw a 5% decline in the Company’s U.S. and Canada segment’s operating profit to $217.3 million, compared to $228 million in 2016.

After the disclosures, Hasbro’s stock dropped $8.44 per share and closed at $89.75 per share on October 23, 2017.


We'll keep an eye on updates on this story, and bring them to you as soon as any developments arise, but do let us know your thoughts in the comments.

EDIT:

AcademyofDrX wrote:The excerpt below is directly from PR wire copy:

"According to the lawsuit, defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (1) Hasbro's relationship with Toys ''R'' Us was becoming increasingly important to Hasbro's business, but Toys ''R'' Us was in far worse financial condition than was being publicly reported; (2) Hasbro was experiencing significant undisclosed adverse sales issues in two key markets - the United Kingdom and Brazil - which were negatively impacting Hasbro's efforts to grow sales in those markets; and (3) as a result of foregoing, defendants' statements about Hasbro's business and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages."

Companies are required by law to tell their shareholders how their business is doing. These statements have to be truthful. The alleged fraud is basically that before the TRU bankruptcy, Hasbro said that things were okay, and after they weren't very okay. That's the gist of it. Ther no expectation that there are fudged numbers in a ledger, but if Hasbro knew the risks of the bankruptcy and didn't tell investors, that would make those statements false. I wouldn't recommend reading too much into this stuff.
Re: Hasbro Reports First Quarter 2018 Financial Results (1989818)
Posted by fenrir72 on October 19th, 2018 @ 5:14am CDT
This is SERIOUS folks!

Hb has its mitts on TF, SW,Marvel and Disney! The last 3 are Disney territory. Whether we like to admit it or not, SW and Marvel have been getting a bit too left political, heck, even ESPN (another Disney property) aka the boring sports channel because it no longer talks about sports has suffered greatly with low ratings and subscribers leaving.

https://awfulannouncing.com/espn/bob-ig ... field.html

Nothing wrong being SJW and all but there is a time and place for it (not with our suspension of disbelief hobbies playtime). Not to mention a recent study (see link)

https://www.moreincommon.com/hidden-tribes/

shows only about 8% to 10% of the American populace are the noisy nutjobs! The rest are just the busy normal average Joe and Jane who care for nothing of the white noise (i.e. APOLITICAL).

Yet when big companies like Disney placate to these groups who don't even invest (i.e. SPEND) in such products, alienating the silent majority, ..........there bye damaging the brand. :(

Trouble is, it was Hb who also got hit with huge INVENTORIES of unsold SW products (Marvel Comics isn't doing too good either). I am willing to bet this took a huge chunk of the "black" Hb profits leading it to bleed red (don't get me started with the clusterfrck of the last two TF movies and the overkill with Bumblebee).

Let's pray that Hb and its stockholders recover from this or ELSE......might take TF down with them in the drain. :-(
Re: Hasbro Reports First Quarter 2018 Financial Results (1989819)
Posted by kurthy on October 19th, 2018 @ 5:38am CDT
fenrir72 wrote:This is SERIOUS folks!

Hb has its mitts on TF, SW,Marvel and Disney! The last 3 are Disney territory. Whether we like to admit it or not, SW and Marvel have been getting a bit too left political, heck, even ESPN (another Disney property) aka the boring sports channel because it no longer talks about sports has suffered greatly with low ratings and subscribers leaving.

https://awfulannouncing.com/espn/bob-ig ... field.html

Nothing wrong being SJW and all but there is a time and place for it (not with our suspension of disbelief hobbies playtime). Not to mention a recent study (see link)

https://www.moreincommon.com/hidden-tribes/ I

shows only about 8% to 10% of the American populace are the noisy nutjobs! The rest are just the busy normal average Joe and Jane who care for nothing of the white noise (i.e. APOLITICAL).

Yet when big companies like Disney placate to these groups who don't even invest (i.e. SPEND) in such products, alienating the silent majority, ..........there bye damaging the brand. :(

Trouble is, it was Hb who also got hit with huge INVENTORIES of unsold SW products (Marvel Comics isn't doing too good either). I am willing to bet this took a huge chunk of the "black" Hb profits leading it to bleed red (don't get me started with the clusterfrck of the last two TF movies and the overkill with Bumblebee).

Let's pray that Hb and its stockholders recover from this or ELSE......might take TF down with them in the drain. :-(


Take your politics elsewhere.
Re: Hasbro Reports First Quarter 2018 Financial Results (1989830)
Posted by frogbat on October 19th, 2018 @ 7:19am CDT
howwwwww... I give them so much money!!! aherm

hope it gets sorted for our hobby's sake and for their employees
Re: Hasbro Reports First Quarter 2018 Financial Results (1989834)
Posted by Skritz on October 19th, 2018 @ 7:41am CDT
Like it or not, the more the Disney stuff circles the drain the more this will affect Transformers. Take whatever stance you want on all this, from looking at it economically to talking about the culture but the cold hard reality is: Hasbro will lose money if nobody wants to buy the MCU and Star Wars stuff and, as it happen, Star Wars merchandise has been doing poorly for a variety of reasons which go far beyond debates about the movie qualities, including having too much products on the shelves which cost too much and children not buying them. >:oP
Re: Hasbro Reports First Quarter 2018 Financial Results (1989860)
Posted by ScottyP on October 19th, 2018 @ 9:20am CDT
fenrir72 wrote::-(
This was a poorly written, borderline irrelevant post that reflects poorly on the Seibertron.com community. I urge you to do better in the future and focus on the facts presented rather than associate them with carefully selected talking points that have nothing to do with the article posted.
Re: Hasbro Reports First Quarter 2018 Financial Results (1989878)
Posted by Coptur on October 19th, 2018 @ 10:09am CDT
Truth hurts?
Re: Hasbro Reports First Quarter 2018 Financial Results (1989880)
Posted by fenrir72 on October 19th, 2018 @ 10:14am CDT
Coptur wrote:Truth hurts?


It sure does. :-D
Re: Hasbro Reports First Quarter 2018 Financial Results (1989881)
Posted by fenrir72 on October 19th, 2018 @ 10:16am CDT
The "Man Children" aren't buying them anymore. That's what hurts.

Fact: Iger is Disney CEO. He knows more than we do.
Fact? Too much SW every year diluted the brand. Open to debate. As if He'll admit to the public the real reason.

My linking to his statement on the status of ESPN not related? Really? Not related?

Hb got the exclusive rights to distribute a lot of Disney products. Star Wars being one of them. It's underperforming to put it lightly (the toys). Why it ain't moving? Some say the kids don't buy them anymore. Trouble is, it's the demographic with a lot of disposable income that isn't buying (i.e. the Man Children aka as you and me).

Why aren't they buying? What has dampened their appetite to buy? Aren't media like movies, comics etc the means to brainwash "encourage" the fans to buy? I only posited a very probable reason why no one is buying.

With SW hurt, Hb got hurt too! Hb get hurt, TF is affected too! Now we get these investor revolts.

Again, let's hope sanity returns to both sides (Hb and Disney) and just produce great APOLITCAL products that promotes escapism/suspension of disbelief.
Re: Hasbro Reports First Quarter 2018 Financial Results (1989884)
Posted by Rodimus Knight on October 19th, 2018 @ 10:32am CDT
ScottyP wrote:
fenrir72 wrote::-(
This was a poorly written, borderline irrelevant post that reflects poorly on the Seibertron.com community. I urge you to do better in the future and focus on the facts presented rather than associate them with carefully selected talking points that have nothing to do with the article posted.


It was rambling, but the basic point is valid. The more the companies that Hasbro is producing licensed items for do things to disenfranchise the fans (ie Kathleen Kennedy & Rian Johnson) the more it's going to affect the sales of the products that Hasbro sells and hurt Hasbro's bottom line. My figure buying habit was seriously affected by the lunatic rants of the earlier mentioned individuals. You throw out hate at your fan base, it's going to affect your bottom line.

Solo, although not a great movie was a fun one, was negatively affected by the the drama surrounding TLJ, so again product didn't sell (I still want figures from that line but I figure they'll end up on clearance soon enough). Star wars had really been a power house for Hasbro, until the people running Star Wars derailed the gravy train.

The quality of the Disney princess dolls hasn't really improved since Hasbro took over. They have more of a variety of faces and heads, but the same crappy articulation the Mattel ones had. They put a lot into the Decedents original line, and that sold well, but the sequel dolls are shelf warmers until clearanced out.

Marvel Comics could possibly be a thing of the past in the near future. Disney is already starting to license out characters to other companies. That is a direct result of the current batch of writers being well, I'll say it SJWs. Probably my favorite Comic in recent years was the Kamala Kahn Ms Marvel, then they got super political with it, and I stopped reading, although I did just buy her Marvel Rising doll, along with Ghost Spider.

Marvel Studies is more or less keeping the political stuff to a minimum, as is the Animation side of Marvel, but if they go the way of Star Wars, you'll see the Marvel figure revenue drop significantly as well.

That will have a negative effect on the Hasbro Bottom line, and Transformers will be negatively affected. Look at the number of terrible stickers they used in the POTP line (i mean seriously they had stickers on Starscream that you couldn't press flat because of details on the parts the stickers covered), when the previous lines had few on anything smaller then Titan Class. We could see more cheaply made figures for more money.
Re: Hasbro Reports First Quarter 2018 Financial Results (1989887)
Posted by Short Circuit on October 19th, 2018 @ 10:45am CDT
I didn't realize children's toy companies including messages of inclusiveness, diversity, honor, and the like counts as "leaning towards the left." But then again, I'm not paranoid. :roll:

Toys are tanking because electronics sales are up. Toys to life is surging again, and console sales are up (electronics are much more expensive and versatile than plastic figures). Hasbro's other IP's are doing average or about to be rebooted. (Transformers has gone full G1 to recenter the brand.) Xmas is around the corner and people tend to wait last minute. Marvel just dropped a huge cliffhanger and people won't be hype till Infinity War 2 unless they pull of a sleeper hit. The economy in general took a hit the past few months.

There's no need to get worked up and digging for hidden meanings. Companies restructure all the time. Things start anew. Trends and fads ebb and flow and come and go. You gotta take the good with the bad because with every upturn comes down, and Hasbro is trying to prepare so they can continue on with what they're doing.

Besides, they're multi-billion dollar corporations. They're fine as long as the CEOs don't destroy the company for personal gain like TRU America. And I'm sure keeping the Transformers IP around with tangible merch is more profitable then dropping it all.
Re: Hasbro Reports First Quarter 2018 Financial Results (1989889)
Posted by ZeroWolf on October 19th, 2018 @ 10:49am CDT
We would see cheaply made figures anyway because that's how they maximise profit (by minimising costs). It has nothing to do with people who, at a fundemental level are trying to make things better and fairer. A minority don't go about it the best way but considering the hate that gets thrown at them, I'm not suprised there's an escalation in arguments between the opposing groups.

Now the article in question is light on details, like why they are being accused of security fraud.

Edit:

Also what Short Circuit put, all of it.
Re: Hasbro Reports First Quarter 2018 Financial Results (1989897)
Posted by SW's SilverHammer on October 19th, 2018 @ 11:38am CDT
Look I have to pitch in here, mostly because there's clearly some bullshit here. Alright so the foremost thing about the toy market is it is changing, and not because of politics. The foremost reason is Hasbro and Mattel aren't the only game in town anymore. Unlike 1977, 1997 and 2007, the best outlet for star wars and marvel isn't the hasbro market; there are multiple third party companies like Hot Toys, MAFeX, and the Bandai Tamashii Nations; these companies do give the best representations of relevant movie centirc characters, like Captain America, Iron Man, Rey, and Kylo ren.

Sure they be comparatively more expensive import figures, but when you consider someone my take a couple of weeks and multiple trips to a target or Walmart to find a midling to decent 20-25 dollar black series/marvel legends figure. The cost differential isn't to extreme compared to buying a 50 to 60 dollar highly articulated, highly accurate S.H Figuarts from BBTS or AmiAmi in the comfort of your own home. Figures which will be released in japan on a set scheduled with equal distribution and will (probably) be at your house in 5 business days at the most. I work at a vintage toy store in downtown PDX, and the other day this kid, 7-10 was buying some oldschool vinyl Kaiju, when his mom chimed in "Don't you have the S.H MonsterArts gigan?". I'm not saying this is all kids and all collectors, but what i'm saying is the market for bigger better more expressive toys is open, it's not just collectors, it's also kids too, and most of those toys happen to be imports. I'm not saying this is the only reason, just that it's a major factor.

Hasbro will always have the comic exclusive interpretations of marvel characters and obscure star wars characters. One of my favorite black series Force Awakens figures is the Guavian bounty hunter and there ain't no way in heeeeeeell MAFeX is going to make him. Also for those people saying "oh star wars is too political with SJWS and thats why the toys aren't selling" people must be forgetting the absolute glut of Phantom Menace, Attack of The Clones, and Revenge of the Sith toys, and those movies are a hell of a lot weaker than TFA, TLJ, Rogue One, and the Han Solo Goes Solo, Solo Movie.
Re: Hasbro Reports First Quarter 2018 Financial Results (1989899)
Posted by Diaboragon on October 19th, 2018 @ 11:47am CDT
Short Circuit wrote:I didn't realize children's toy companies including messages of inclusiveness, diversity, honor, and the like counts as "leaning towards the left." But then again, I'm not paranoid. :roll:


The toys may not be political, but the people who direct their source material certainly are. And that's not on its own a bad thing, but it seems like in today's age if you don't agree with their stances 100%, they don't want you as part of their audience. That friction does not help with sales.
Re: Hasbro Reports First Quarter 2018 Financial Results (1989905)
Posted by AcademyofDrX on October 19th, 2018 @ 12:53pm CDT
All of this is nonsense and it has nothing to do with the original post, it's all off-topic.

If you think the number of stickers on a Starscream figure has ANYTHING to do with big business entertainment and the culture wars, you lack the maturity to read investor reports and economic news, including posts like this one.

If you want to criticize contemporary corporate mores in favor of representation, there are plenty of alt-right websites for that. This is a toy forum, for Primus' sake.
Re: Hasbro Reports First Quarter 2018 Financial Results (1989906)
Posted by Dr. Caelus on October 19th, 2018 @ 12:57pm CDT
I could get all raging "SJW" about things, but I'll say this instead.

Adult collectors make up a portion of toy consumers.

Straight white male collectors (what I infer to be the "disenfranchised" group of fans people are mewling about) make up a portion of adult collectors.

Politically conservative (or anti-liberal) collectors make up a portion of that "disenfranchised" demographic.

Collectors that pay attention to off-screen political twitter drama make up a portion of those conservative collectors.

Collectors that care enough about that drama to amend their shopping habits make up a portion of the collectors who pay attention to the drama.

Let's be generous and say that 50% of toy buyers are adult collectors, 50% of those collectors are part of a "disenfranchised" demographic (I have to use quotes because I can't even type that with a straight face), 50% of that demographic is anti-liberal, 50% of those anti-liberal collectors pay attention to what directors & content producers say on platforms like Twitter (which is really unlikely since only 20% of Americans use Twitter), and that 50% of those people will forego buying a Solo action figure because of something the director of another movie said that offended them.

.50 ^ 5 = 0.03125

So in the extremely unlikely situation that all of those strata are split 50/50, that accounts for a 3% dip in toy sales, and only in the licensed, collector-marketed toy sales (e.g., Star Wars: Black Series), which themselves make up only a portion of Hasbro's products. And that also doesn't consider the corresponding increase in toy sales that would come from inclusive story-telling and content creators voicing progressive morals.

Meanwhile, child population growth is slowing due to people having fewer kids, and children are continuing to shift their interest to interactive media (e.g., tablet games, consoles) for their indoor entertainment. I suspect that has a LOT more to do with poor brand performance than some anti-SJWs feeling butt-hurt because companies are paying attention to other demographic groups.
Re: Hasbro Reports First Quarter 2018 Financial Results (1989909)
Posted by f-primus-unicron on October 19th, 2018 @ 1:34pm CDT
what about the less quality and still more expensive than last years products and of course products that are not good even if the materials and prices were better?

im not going to say anything else about lack of articulation or simplified toys, that honestly depends on each persons preferences but overall lower quality and higher prices, and lackluster products design isnt going to do any good to hasbro at this point
Re: Hasbro Reports First Quarter 2018 Financial Results (1989913)
Posted by Skritz on October 19th, 2018 @ 2:45pm CDT
Let's not forget mass retail action figures aren't really a thing kids want these days. Videogames have been the hot 'new' thing (not so new anymore, but still) and have long relegated action figures to a secondary, if not tertiary role next to just wasting time on your phone. We might forget this when we collect Transformers because we still buy toys in our '30 and '40.

Star Wars has had problems on multiple angles, namely:
-The toys are overpriced.
-There is too much merchandise, since there is more than just the playset, figures and lego but also a ton of stuff like huge out of scale Stormtroopers and lightsaber builders and other tacky crap nobody wants, neither kids nor adult collectors.
-Said stuff is constantly on shelves due to Star Wars now being a yearly thing.
-The new movies haven't really been good at selling the new characters to an audience, meaning what does sell even decades later are your Darth Vaders and Luke Skywalkers.
-A sizable chunk of people didn't like The Last Jedi and Solo for a variety of reasons and that hurt merchandise sale.

Of course this is going to hurt Hasbro's bottom line when entire sublines of useless Star Wars merch end up clogging shelves, taking immense space in a market where toys increasingly sell less. It's basic economics: they offered too much of stuff nobody wanted. Simply spacing these movies by 2-3 years in between would have alleviated some of the problems. >:oP
Re: Hasbro Reports First Quarter 2018 Financial Results (1989918)
Posted by frogbat on October 19th, 2018 @ 3:08pm CDT
Think the biggest issue was toys r us’ demise. But hey I’m just an adult tyo collector...
Re: Hasbro Reports First Quarter 2018 Financial Results (1989919)
Posted by Flashwave on October 19th, 2018 @ 3:09pm CDT
Admittedly, I dont speak Legalese, but I think we are all getting the wrong c9nclusion here.

What I am interpretting (and very likely could be wrong) is that a few highwr ups did something illegal, which could be embezzling or falsely reporting money or lying on Quarterly Profits. The Investors want the Truth so they launched an investigation, and as a way of keeping the organization as a while clean, what we are seeing as "Layoffs" is is a nonbiased way of saying "Hasbro is electing to let go of the people under indictment and or the people under indictment and those guilty of assisting (secretaries etc.) In the lie." Possibly, a few innocent parties may get cut as well to make up the dofference of what might be owed to investors.

And again, I cpuld ve totally wrong. And maybe the Accused did what they did to hide that everythung was not hunky dory in sales, but that just doesnt feel likevthe whole stpry here.
Re: Hasbro Reports First Quarter 2018 Financial Results (1989929)
Posted by Evil Eye on October 19th, 2018 @ 4:02pm CDT
In my experience, Star Wars and TLK stuff shelfwarmed HARD. There's still legions of Sqweeks and Barricade Deluxes on shelves, and the amount of assorted 5POA SW figures rotting away isn't pretty either. In the case of SW especially, not helped IMO by how bad some of those figures look. Like, I know a pocket money toy is never going to stand up to a Figuarts, but when the majority of the figures on sale are these mushy little 5POA things that wouldn't look out of place in the late 70s (and don't even have the same charm as the older figures) and the few decently poseable figures are too expensive for the young 'uns (£20 is a lot for a 6" figure in the context of little Jimmy's pocket money) and too poorly made for us overgrown children (compared to the Figuarts or Mafex offerings, Hasbro's SW figures just aren't very good) you can see why they didn't exactly fly off shelves.

So between that and TRU's demise I'm not surprised to see Hasbro struggling. The supposed fraud/whatever charges though, that is concerning.
Re: Hasbro Reports First Quarter 2018 Financial Results (1989932)
Posted by AcademyofDrX on October 19th, 2018 @ 4:19pm CDT
Just a quick note for everyone: the lawsuit alleges misrepresentation, but is not itself evidence of fraud. The suit itself basically boils down to a very simple idea: the collapse of TRU had a significant impact on Hasbro's business and Hasbro knew more about the risk from TRU than they disclosed to investors. This kind of thing happens all the time when there are big stock drops.

I mention all of this as a casual observer, I have no personal or professional stake in any of this. Lawsuits are never good news, but there's nothing in this that should concern casual toy collectors. This is up to their legal teams and insurance.
Re: Hasbro Reports First Quarter 2018 Financial Results (1989933)
Posted by Dr. Caelus on October 19th, 2018 @ 4:24pm CDT
Black Hat wrote:In the case of SW especially, not helped IMO by how bad some of those figures look. Like, I know a pocket money toy is never going to stand up to a Figuarts, but when the majority of the figures on sale are these mushy little 5POA things that wouldn't look out of place in the late 70s (and don't even have the same charm as the older figures) and the few decently poseable figures are too expensive for the young 'uns (£20 is a lot for a 6" figure in the context of little Jimmy's pocket money) and too poorly made for us overgrown children (compared to the Figuarts or Mafex offerings, Hasbro's SW figures just aren't very good) you can see why they didn't exactly fly off shelves.


I have dozens of fully articulated Episode III clone troopers. It's a collection I was able to collect as a less than prosperous undergrad, built over ten years ago, but they look a hell of a lot better (and are definitely more fun to play with) than almost any of the toys out there now.
Re: Hasbro Reports First Quarter 2018 Financial Results (1989934)
Posted by ZeroWolf on October 19th, 2018 @ 4:25pm CDT
AcademyofDrX wrote:Just a quick note for everyone: the lawsuit alleges misrepresentation, but is not itself evidence of fraud. The suit itself basically boils down to a very simple idea: the collapse of TRU had a significant impact on Hasbro's business and Hasbro knew more about the risk from TRU than they disclosed to investors. This kind of thing happens all the time when there are big stock drops.

I mention all of this as a casual observer, I have no personal or professional stake in any of this. Lawsuits are never good news, but there's nothing in this that should concern casual toy collectors. This is up to their legal teams and insurance.

Thank you for the clarification :)
Re: Hasbro Reports First Quarter 2018 Financial Results (1989936)
Posted by Short Circuit on October 19th, 2018 @ 4:29pm CDT
Flashwave wrote:...What I am interpreting is that a few higher ups did something illegal, which could be embezzling or falsely reporting money or lying on Quarterly Profits. ....as a way of keeping the organization as a while clean, what we are seeing as "Layoffs" is is a non-biased way of saying "Hasbro is electing to let go of the people under indictment and or the people under indictment and those guilty of assisting...


AcademyofDrX wrote:....The suit itself basically boils down to a very simple idea: the collapse of TRU had a significant impact on Hasbro's business and Hasbro knew more about the risk from TRU than they disclosed to investors....

There's nothing in this that should concern casual toy collectors. This is up to their legal teams and insurance.


I think both of you are right. TRU being probably a consumer of at least a quarter of hasbro's inventory and then dropping off the map screwed them hard, and the distribution woes and pallets worth of brand new titans return stock showing up at discount outlets are part of the result. I wouldn't be surprised in the slightest if someone in finances got a word from a higher up to change some ones and zeros around in order to help make things work.
Re: Hasbro Reports First Quarter 2018 Financial Results (1989947)
Posted by AcademyofDrX on October 19th, 2018 @ 5:44pm CDT
The lawsuit doesn't allege that kind of fraud. The excerpt below is directly from PR wire copy:

"According to the lawsuit, defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (1) Hasbro's relationship with Toys ''R'' Us was becoming increasingly important to Hasbro's business, but Toys ''R'' Us was in far worse financial condition than was being publicly reported; (2) Hasbro was experiencing significant undisclosed adverse sales issues in two key markets - the United Kingdom and Brazil - which were negatively impacting Hasbro's efforts to grow sales in those markets; and (3) as a result of foregoing, defendants' statements about Hasbro's business and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages."

Companies are required by law to tell their shareholders how their business is doing. These statements have to be truthful. The alleged fraud is basically that before the TRU bankruptcy, Hasbro said that things were okay, and after they weren't very okay. That's the gist of it. Ther no expectation that there are fudged numbers in a ledger, but if Hasbro knew the risks of the bankruptcy and didn't tell investors, that would make those statements false. I wouldn't recommend reading too much into this stuff.
Re: Hasbro Reports First Quarter 2018 Financial Results (1989955)
Posted by Flashwave on October 19th, 2018 @ 7:39pm CDT
AcademyofDrX wrote:The lawsuit doesn't allege that kind of fraud. The excerpt below is directly from PR wire copy:

"According to the lawsuit, defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (1) Hasbro's relationship with Toys ''R'' Us was becoming increasingly important to Hasbro's business, but Toys ''R'' Us was in far worse financial condition than was being publicly reported; (2) Hasbro was experiencing significant undisclosed adverse sales issues in two key markets - the United Kingdom and Brazil - which were negatively impacting Hasbro's efforts to grow sales in those markets; and (3) as a result of foregoing, defendants' statements about Hasbro's business and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages."

Companies are required by law to tell their shareholders how their business is doing. These statements have to be truthful. The alleged fraud is basically that before the TRU bankruptcy, Hasbro said that things were okay, and after they weren't very okay. That's the gist of it. Ther no expectation that there are fudged numbers...
.


Could we put this in the News Article, cause this really helps shape context more than the vague snippets in the post. Its not about Hasbro being in trouble because of shelfwarming or bad toy drsigns, its about lying and lying about the TRU impact.
Re: Hasbro Reports First Quarter 2018 Financial Results (1989963)
Posted by Regimus Prime on October 19th, 2018 @ 9:01pm CDT
Caelus wrote:I could get all raging "SJW" about things, but I'll say this instead.

Adult collectors make up a portion of toy consumers.

Straight white male collectors (what I infer to be the "disenfranchised" group of fans people are mewling about) make up a portion of adult collectors.

Politically conservative (or anti-liberal) collectors make up a portion of that "disenfranchised" demographic.

Collectors that pay attention to off-screen political twitter drama make up a portion of those conservative collectors.

Collectors that care enough about that drama to amend their shopping habits make up a portion of the collectors who pay attention to the drama.

Let's be generous and say that 50% of toy buyers are adult collectors, 50% of those collectors are part of a "disenfranchised" demographic (I have to use quotes because I can't even type that with a straight face), 50% of that demographic is anti-liberal, 50% of those anti-liberal collectors pay attention to what directors & content producers say on platforms like Twitter (which is really unlikely since only 20% of Americans use Twitter), and that 50% of those people will forego buying a Solo action figure because of something the director of another movie said that offended them.

.50 ^ 5 = 0.03125

So in the extremely unlikely situation that all of those strata are split 50/50, that accounts for a 3% dip in toy sales, and only in the licensed, collector-marketed toy sales (e.g., Star Wars: Black Series), which themselves make up only a portion of Hasbro's products. And that also doesn't consider the corresponding increase in toy sales that would come from inclusive story-telling and content creators voicing progressive morals.

Meanwhile, child population growth is slowing due to people having fewer kids, and children are continuing to shift their interest to interactive media (e.g., tablet games, consoles) for their indoor entertainment. I suspect that has a LOT more to do with poor brand performance than some anti-SJWs feeling butt-hurt because companies are paying attention to other demographic groups.



HALLELUJAH!!!!!! THANK YOU :SG-BOTS:
Re: Hasbro Reports First Quarter 2018 Financial Results (1989990)
Posted by AcademyofDrX on October 20th, 2018 @ 6:33am CDT
Flashwave wrote: Could we put this in the News Article, cause this really helps shape context more than the vague snippets in the post. Its not about Hasbro being in trouble because of shelfwarming or bad toy drsigns, its about lying and lying about the TRU impact.


It's just an accusation of "lying," there's no reason to grant that it could be true. This lawsuit is very simple: investors lost money because of a couple big events, and they wish they hadn't. Did Hasbro know more about the risk than they disclosed? Certainly possible.

Speaking personally, I wish this stuff didn't get covered on fan blogs. The article writers can't give it the necessary context, and forum visitors don't want to talk about business considerations, they want to talk about the products and what they think Hasbro should do differently. (Or they want to make baseless assertions that fan protests have anything to do with the corporate bottom line.)

I do appreciate covering the business in passing, but speculating about the causes or consequences of a business reorganization is fundamentally different than trying to guess about upcoming remolds or exercising wish fulfillment about future toys.

If you want to worry about the industry, spend less time reading quarterly updates at places like this and pay attention to the broader industry trends. I don't know how much business Hasbro does with Barnes & Noble, but they'll probably be the next big retailer to either go under or significantly change their business structure. As others have mentioned, the toy industry has been trying to adapt to broader consumer change with challenges. Hasbro competitors like Lego are also going through restructuring including staff cuts, with likely changes to product lines as a result. And the US and other mature markets are only part of the equation; Lego, Hasbro, and others have been trying to expand into new markets with inconsistent success. Put another way, there's a lot more going on than what can be effectively represented in this type of article.
Re: Hasbro Reports First Quarter 2018 Financial Results (1990019)
Posted by fenrir72 on October 20th, 2018 @ 12:43pm CDT
Re: Hasbro Reports First Quarter 2018 Financial Results (1990086)
Posted by -Kanrabat- on October 21st, 2018 @ 8:45am CDT
...
Re: Hasbro Reports First Quarter 2018 Financial Results (1990094)
Posted by AcademyofDrX on October 21st, 2018 @ 10:04am CDT
No need to watch the WCBS vid, Comicsgate is trash. I'm not surprised that movement continues to try to expand into other fan communities.
Re: Hasbro Reports First Quarter 2018 Financial Results (1990096)
Posted by ZeroWolf on October 21st, 2018 @ 10:16am CDT
AcademyofDrX wrote:No need to watch the WCBS vid, Comicsgate is trash. I'm not surprised that movement continues to try to expand into other fan communities.

To be fair I don't watch any video like that as they are all examples of the blind leading the blind. The extreme left rose to combat the extreme right yet neither see that they are pretty much a mirror of the other one. Big problem is that none of this is really affecting what the article is about. Hasbro need to develop solutions to problems about being relevant in an increasingly digital age. Even the star wars toy lines of yesterday would have faced hefty competition if released today. Times change and we must change with them.
Re: Hasbro Reports First Quarter 2018 Financial Results (1990415)
Posted by fenrir72 on October 22nd, 2018 @ 9:27pm CDT
Cost Hasbro pays for the Star wars franchise fee. Just another rant link:

http://www.jeditemplearchives.com/2018- ... s-license/

https://corporate.findlaw.com/contracts ... -inc2.html

https://corporate.findlaw.com/contracts ... o-inc.html

http://archive.fortune.com/magazines/fo ... /index.htm

https://www.awn.com/news/hasbro-and-luc ... rough-2018

https://variety.com/2013/biz/news/hasbr ... 200566115/

https://seekingalpha.com/news/2951666-d ... s-products

https://www.forbes.com/sites/greatspecu ... 0e2ed03d6e

Reputable sources I guess :-D

Some revisions more than likely has been applied since Disney took over Lucasfilm

Edit:

" Usually, a licensee only pays royalty fees once the minimum guarantee has been paid off. So if Hasbro paid $250 million on release of Episode I they would only pay royalties once their Star Wars toys net sales exceed $250 million for that Episode.

And these royalties were increased to 20% of net sales in 2015.

Hasbro’s Star Wars license for the past 21 years cost them a total of at least $730 million plus at first 18% and then 20% of Star Wars toys net sales.

Hasbro’s operating margin in the past years was between 11.5 – 15.5%, in 2018 it’s a little more than 12%. Which simply means one thing: first Lucasfilm and now Disney make MORE money off the Star Wars toys Hasbro makes than Hasbro themselves.

Please think about this for a while.

Now, a more common royalty fee in the toy industry is something like 10%. In other words: the Star Wars toy license is the most expensive toy license out there. Which is why only a big player, a global toy company such as Hasbro, is able to afford it."


And finally some other interesting points from the agreement:

Lucasfilm/Disney need to approve everything
Should Hasbro fail to meet agreed upon quality standards Lucasfilm/Disney can order Hasbro to stop production of said toy at once!
Hasbro needs to provide Lucasfilm/Disney with samples of toys on a regular basis
Lucasfilm and Hasbro agreed upon a minimum sales level. The exact level has been redacted, but it’s very interesting to know that such a minimum sales level does exist. Any consequences as to what happens if Hasbro failed to meet that projected sales level have been redacted, but it’s safe to assume that Hasbro would face consequences
Hasbro is required to exercise reasonable commercial efforts to guarantee minimum sales levels are met and exceeded (they need to advertise, for example)
Hasbro has to provide Lucasfilm/Disney with detailed and accurate records, Lucasfilm/Disney may also, not more than once a year and with advance notice, perform an audit and check all the numbers at Hasbro headquarters
Hasbro can’t sublicense anything without explicit approval by Lucasfilm/Disney
And finally, which may be of interest soon, there’s also a paragraph about China in the agreement. The section about China states that should China ever lose its most favored nations trade status and therefore render performance impractical or even impossible then both parties will get together and discuss any appropriate actions that can be taken. So if trade tariffs of 20% or more should be imposed upon toys made in China, you can expect Hasbro and Lucasfilm/Disney to meet in a panic room
One final word: the licensing agreement is from 1997. Most likely it was altered, most certainly amended and changed in the meantime, but it was never really fully renegotiated, as far as I understand it, it was merely extended several times. So while some details may and probably will be different now I believe that most of the things written in that agreement are still valid today in very similar form.

Now, in light of all this… what do you think? Do you think the Star Wars license is worth it? Have you developed some more understanding as to why Hasbro does things the way they do? Remember, Disney is the one who makes most of the money here. Hasbro owns nothing when it comes to Star Wars. In light of this it makes perhaps a lot of sense not to invest too much money in all new sculpts for a relaunched TVC with uncertain performance at retail and most likely much lower margins and instead to use the sculpts they already have and put them on a Vintage Card. The Black Series has the advantage of having a higher MSRP/wholesale price and therefore, most likely, higher profit margins, provided that manufacturing costs are about the same for TVC and Black Series.

And this also tells us one more thing: other than maybe Hasbro, Mattel, Lego or Bandai no niche company such as Neca, Mezco etc could ever afford the exclusive, worldwide Star Wars license, Mafex can afford it because it’s neither exclusive nor worldwide. Consider this next time you want someone else to take over the SA 3.75 inch Star Wars line. The license is more expensive than what these companies probably earn in a year. It would bankrupt them.

Only if Star Wars was dead, truly dead and no longer financially successful, some small company might be able to afford the exclusive, worldwide license. But I suppose no one here wants that. We should all wish and hope that Star Wars will thrive and that Hasbro is willing and able to pay the enormous license fees and royalties in the future.


So in summary:

Hasbro needs to pay a minimum guarantee to Lucasfilm/Disney, over the past two decades that guarantee amounts to at least $730 million Hasbro also has to pay royalties. Royalties were 18% for a long time, but then in 2015 Disney increased the rate to 20% of net sales, which is higher than Hasbro’s operating margin which is usually something between 11-15%

All things considered Hasbro has paid well over $1 billion to Lucasfilm/Disney in the last 21 years. Probably about $1.5 billion

Lucasfilm/Disney is the owner of everything Hasbro designs and creates for Star Wars

Update: the royalty rate for the prequel period was corrected, originally it said that the rate was north of 15%, so 15% or more (since this is all the info I found), the Netflix documentary “The toys that made us” gives the rate as 18%, the text and some numbers have been updated accordingly

So yup! SW is causing a big bad red instead of black in Hasbro's bottom line. Nope, it's not really affecting Hasbro at all. Just a few NPCs getting the pink slip :(

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