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 Sales of toys aimed at girls grew 21 percent in the first quarter,
while toys for boys rose just 2 percent, although the company's boys
lines will likely be boosted by the upcoming release of Transformer
and Spider-Man movies.
Hasbro's shares rose as much as 4.2 percent to touch an all-time
high of $56.91 in early trading on Monday.
The growth in Hasbro's sales of toys for girls contrasts with the
fading sales of Barbie dolls, which dragged rival Mattel Inc <MAT.O>
to its first quarterly loss in nearly five years.
Barbie, a billion-dollar brand modeled on an adult woman and her
career, has fallen out of favor with girls who increasingly prefer
dolls with storylines more in keeping with their age.
Hasbro has tasted success with its My Little Pony franchise,
including a TV series based on the equine characters with colorful
bodies and manes. Accessories include teenage human versions of the
ponies, plush toys, clothing and books.
"With My Little Pony, Hasbro is having tremendous success because
they are developing not just physical toys but also content that
helps little girls understand storylines and character development,"
Piper Jaffray analyst Stephanie Wissink said.
Mattel has been successful with its American Girl toy range, which
comprise chubby-faced dolls portraying 8-11 year-old girls of
different ethnicities. They are sold with storybooks from the
viewpoint of the dolls.
Sales of Hasbro's toys for girls was also helped by strong demand
for a bow-and-arrow-based offshoot of its Nerf line of gun toys — the Nerf Rebelle — that cashed in on the popularity of the 'Hunger
Games' movie series.
The girls' toy business grew to $138.7 million in the first quarter
ended March 30 and accounted for 20.4 percent of total revenue, up
from 17.3 percent a year earlier.
Revenue from boys' toys, the company's largest business category,
inched up to $247.8 million. Revenue from both preschool toys and
games, which include Monopoly and Pictionary, fell 4 percent.
"We're seeing our market share in girls, particularly in dolls, grow
in the U.S. and around the world and we're also seeing that growth
in outdoor activities where Nerf Rebelle has scored ...," Hasbro
Chief Executive Brian Goldner said on a post-earnings conference
call.
Many of Hasbro's action figures are based on partnerships with
studio films, which vary in popularity each year.
Demand has been weak industrywide for action figures and preschool
toys, two important categories for Hasbro, as children shift their
focus to mobile devices, analysts have said.
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However, Wissink said she expects shipments of action figures to
accelerate in the second quarter with the release of the new
Spider-Man movie in May and the next installment of the Transformers
franchise in late June.
Hasbro owns the Transformers brand and holds the toy licenses for
Marvel Comics' characters, which have had a phenomenal box office
run over the last few years, most recently with the success of
"Captain America: The Winter Soldier".
REVENUE MISSES
Hasbro's first-quarter revenue rose 2 percent to $679.5 million,
falling short of the average analyst estimate of $690.17 million.
International revenue rose 5 percent to $305.5 million, offsetting a
1 percent decline in sales in North America.
Net income was $32.1 million, or 24 cents per share, compared with a
net loss of $6.7 million, or 5 cents per share, a year earlier.
Excluding items, the company earned 14 cents per share.
Analysts on average had expected a profit of 10 cents per share,
according to Thomson Reuters I/B/E/S.
Hasbro shares, which have risen 18.9 percent in the 12 months to
Thursday's close, were up 0.7 percent at $55.00 in afternoon trading
on the Nasdaq. Mattel shares were up 1 percent at $37.85 on Monday.
At Thursday's closing price, Hasbro's stock was trading at 16.67
times forward earnings. Mattel's shares were trading at a multiple
of 13.75.
(Reporting by Siddharth Cavale and Shailaja Sharma in Bangalore;
editing by Maju Samuel and Savio D'Souza)
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