Hasbro has its game face on. After Mattel missed its Q1 expectations with a 15% drop in global sales, Rhode Island-based Hasbro saw its revenue rise 2% to US$849.7 million and company earnings increase by 41% to US$68.6 million in the first quarter of the year.
The big winner was the toy giant’s Gaming category, which posted 43% growth in revenue to the tune of US$142.9 million. This was driven by new titles like Fantastic Gymnastics, robust digital gaming sales and this year’s viral sensation Pie-Face. Digital gaming sales rose thanks to higher revenue at Backflip Studios, in which Hasbro took a 70% stake back in 2013. (Habro’s Gaming category also saw gains both in Q4 2016 and fiscal 2016, due in large part to Magic: The Gathering, Pie-Face, Duel Masters, Simon, Bob-It and Speak-Out.)
To further capitalize on this growth in gaming—and to compete with companies like Loot Crate—Hasbro has announced the launch of a subscription service called Hasbro Gaming Crate, which will launch in the US this summer.
Overall, the company’s Entertainment and Licensing segment saw revenue rise 24% to US$52.7 million, while the division’s operating profit increased 108% to US$11.3 million.
Revenue for Franchise Brands increased 2% to US$423.6 million, driven by growth for Nerf, Transformers and Monopoly brands. Partner Brand sales, however, declined 18% to US$213 million. Growth from Beyblade and DreamWorks’ Trolls were offset by declines from Marvel and Star Wars brands.
Meanwhile, Emerging Brands revenue increased 25% to US$70.2 million in the first quarter, thanks to Baby Alive and Furreal Friends.
Hasbro’s US and Canada segment net revenues in Q1 increased 2% to US$451.6 million. International net revenues remained steady at US$345.3 million. On a regional basis, Europe and Asia Pacific revenues declined (4% and 1%, respectively), while Latin America and Emerging Markets saw revenues increase 16% and 20%, respectively.
Q1 2017 was a 14-week period, while the first quarter of 2016 was a 13-week period. According to Hasbro, operating profit was negatively impacted by the extra week because its timing adds an additional week of expense, but does not contribute a comparable level of revenue. Operating income in the US and Canada declined 17% to US$64.8 million, while international operating income declined 81% to US$500,000.