#Star Wars saves Hasbro’s 2020 sales with ‘Mandalorian’ toys

Move over Mr. Potato Head, here comes Baby Yoda.

Toy maker Hasbro reported a double-digit sales surge tied to its Star Wars merchandise last year, thanks to “The Mandalorian” series streaming on Disney+.

“Hasbro’s Star Wars revenue grew nearly 70 percent last year despite it being the first year without a theatrical release since 2014,” Hasbro chief executive and chairman, Brian Goldner said during an earnings call.

Hasbro also saw a surge in sales of traditional toys and games, like Monopoly and Operation, as parents looked for ways to entertain their kids during coronavirus lockdowns, the company said.

But the increase was mostly limited to the US and Canada, which weighed on its overall results and disappointed investors.

The stock ended down 4.25 percent to $93.15 a share.

In a research note, D.A. Davidson analyst Linda Bolton Weiser attributed the stock decline “entirely due to underperformance in international.” 

Demand for its signature toys abroad was weak, resulting in a total sales decline last year of 8 percent to $5.5 billion at a time when toys were flying off the shelves worldwide.

For the fourth quarter, Hasbro reported earnings of $105.2 million, down from $267.3 in 2019. After excluding items, Hasbro’s earnings per share of $1.27 still beat expectations for $1.14 per share. Revenue for the quarter rose, but only by 4 percent to $1.72 billion.

Hasbro attributed some of the weakness to “underdeveloped” e-commerce in regions like Latin America, adding that it had to mark down merchandise in both Latin America and Asia to move inventory.

Demand in Europe was flat, the company said, without elaborating. Sales in the US and Canada, by contrast, popped by 16 percent in the fourth quarter.

Board games like Magic: The Gathering and Monopoly each saw their best years ever in 2020, while class games like Jenga, Operation and Connect 4 had a “stellar” year, Goldner said.

But licensing revenue — or merchandise tied to movie releases — suffered overall as Hollywood largely refrained from new releases. In addition to Star wars, Hasbro has had licensing deals tied to Spider Man movies, Transformer movies and Power Rangers films.