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The big story in the toy business is the screaming success of the seventh and latest offering in the Star Wars franchise, “The Force Awakens.” The industry group has risen from No. 55 three weeks ago to No. 23 as of Tuesday’s IBD, bolstered in part by cheery Q4 reports that included Christmas sales. The group has six members, but four are low-priced and thinly traded. The business is dominated by two 500-pound gorillas, Hasbro ( HAS ) and Mattel ( MAT ). The blockbuster movie — released on “Force Friday,” Dec. 18, and still in theaters — hasn’t done much to help shareholders of Disney ( DIS ), its filmmaker. The stock dropped nearly 25% between Nov. 23 and Feb. 10, although it’s recovered somewhat since its latest earnings release. Disney investors have been more focused on the entertainment giant’s problems with ESPN. But not the toy makers, especially Hasbro. Toys tied to the movie were the hottest property of 2015, helping the overall industry grow toy sales by 6.7%, according to NPD Group, a retail tracking service. The $19 billion in retail sales was the best result in more than a decade. Toys tied to movies “outperformed the market in 2015, growing by 9.4%,” NPD said in a January report. “With the early release of Star Wars toys on Force Friday, ‘Star Wars’ managed to become the No. 1 property for the year, with over $700 million in sales. It also brought in more sales and contributed more growth than ‘Jurassic World,’ ‘Minions’ and ‘Avengers’ combined.” In its Q4 report, released Feb. 8, Hasbro said the 2015 sales of boys’ toys rose 35%, riding the success of the Star Wars movie. Girls’ toys declined by 17%, the company said. Harbro’s featured item is a $140 Battle Action Millennium Falcon with pop-up Nerf launcher, lights, motion-activated sound effects and a fold-out play set. Hasbro has been been strong in the boys department for years with the success of G.I. Joe and Nerf Blasters. It hopes to strengthen its offerings for girls with Disney princess dolls, including those tied to the 2013 “Frozen” film. Investors loved Mattel’s Q4 report a week earlier, lifting the stock 13.8% the next day on monster volume. Mattel has been stronger with girls and said Barbie sales helped drive a 21% increase in EPS, even though sales were flat from a year earlier. Mattel’s website is light on Star Wars toys, but the company has geared up for last weekend’s release of “Batman v Superman: Dawn of Justice.” Talk of a possible Hasbro-Mattel merger has surfaced from time to time. Hasbro CEO Brian Goldner downplayed that possibility in the company’s earnings conference call, saying he’s interested in smaller acquisitions and is focused on his company’s strategy. A big loser in any merger would be Disney, which chortles at the thought of seeing the two deep-pocketed toy makers bid against each other. Disney is the world’s biggest licensor, with products selling $4.5 billion a year. Scalper1 News
Scalper1 News