Hasbro looks to bounce back from its Disney contract loss to rival Mattel with solid fourth quarter earnings and a modest dividend boost.
Hasbro (HAS) – Get Hasbro, Inc. Report shares jumped higher Monday after the toymaker posted stronger-than-expected fourth quarter earnings thanks to a jump in brand-partners sales and a rebound in its entertainment business.
Hasbro said adjusted profits for the three months ending in December were pegged at $1.21 per share, down 4.7% from last year but firmly ahead of the Street consensus forecast of 88 cents. Group revenues, Hasbro said, rose 17% to $2.01 billion, again topping analysts’ estimates of a $1.87 billion tally, thanks to a solid jump in sales from its partner-brand and television businesses.
The Monopoly and Play-Dough maker also boosted its annual dividend by 3%, to 70 cents per share, and said its sees ‘low single-digit’ revenue growth for the 2022 financial year.
“The Hasbro team finished the year strong and delivered an exceptional full-year 2021, including another record revenue year for Wizards of the Coast; strong revenue growth for consumer products; and a robust, progressively more Hasbro brand-led, content slate to return to 2019 levels of deliveries for entertainment,” said interim CEO Rich Stoddart, who will make way for new boss Chris Cooks later this month.
“Fans and consumers are increasingly interacting with brands in more ways than ever—our unique set of strategic assets across toys and games, entertainment, digital gaming and licensing provide the foundation for maximizing the value of both our existing franchises and new IP,” he added.
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Hasbro shares were marked 1.4% higher in pre-market trading immediately following the earnings release to indicate an opening bell price of $95.20 each.
Hasbro’s movie-related merchandise sales also got a boost from its Marvel portfolio, thanks in part to the success of Spider-Man: No Way Home “and the new animated show Spidey and his Amazing Friends”, the company said.
Last month, however, that unit took a hit from the loss of its contract to sell merchandise inspired by Walt Disney (DIS) – Get Walt Disney Company Report characters to rival Mattel (MAT) – Get Mattel, Inc. Report.
The Wall Street Journal first reported that Mattel, which lost the licensing rights to Disney-inspired toys to Hasbro in 2016, will begin selling the items next year, with a lineup that includes characters from the blockbuster ‘Frozen’ movie franchise.
Mattel confirmed the report, noting it will have global licensing rights to develop lines of toys for Disney Consumer Products, Games and Publishing, including fashion dolls, small dolls, and figures.
Mattel is set to report December quarter earnings on Wednesday following what the maker of Barbie and Hot Wheels forecast would be a solid holiday shopping season, with sales rising by 15% and earnings in the region of $900 million to $925 million.
