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Gaming turns out to be the highlight of Hasbro’s (HAS) Q4
Hasbro is on track to achieve its goal of $130 million in synergies by the end of 2022
Shares of Hasbro Inc. (NASDAQ: HAS) were down 4.4% in afternoon hours on Monday, despite the company reporting fourth quarter 2020 revenue and earnings that surpassed market expectations. Revenues rose 4% year-over-year to $1.72 billion while adjusted EPS increased 41% to $1.27.
Hasbro’s strong results were driven by increases in gaming and TV/film/entertainment. The company benefited from the momentum seen in gaming during the pandemic as well as the popularity of its Star Wars merchandise fueled by the TV series The Mandalorian, currently streaming on Disney +.
Gaming
During the fourth quarter of 2020, Hasbro’s Gaming segment revenues increased 21% year-over-year to $298.5 million. Revenues for the total gaming category rose 27% to $561.2 million. For the full year of 2020, gaming revenues grew 15%, with strength across all regions except Latin America.
The strength in gaming was driven by franchise brands such as MAGIC: THE GATHERING and MONOPOLY, DUNGEONS AND DRAGONS, and classic games such as JENGA, OPERATION and CONNECT 4. Hasbro will continue to invest in face-to-face and digital gaming in the coming years as this segment remains a priority.
Popularity from TV shows
Hasbro’s products also benefited from the popularity of certain TV shows and film franchises. The company’s Star Wars product revenues grew nearly 70% in 2020 even without a theatrical release. This growth was driven by the popularity of The Mandalorian which is currently streaming on Disney+.
Hasbro recorded growth across all regions with the strongest growth in Europe, North America and Australia. The Child products gained popularity during the year but even without these, the company saw interest in its other Star Wars lines driven by casual, pop culture fans in the overall Star Wars category.
Hasbro is working on future merchandise and brand initiatives, including with Disney + for Star Wars, Marvel, Disney Princess and Frozen.
Cost savings and outlook
Hasbro has generated $30 million in cost savings which puts it on track to achieve its goal of $130 million in synergies by the end of 2022. Despite the challenges faced due to the pandemic, the company remains optimistic that it can grow revenues and earnings in the coming year.
Click here to read the full transcript of Hasbro Q4 2020 earnings conference call
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