Game maker Hasbro
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Toymaker stocks rallied Thursday after rivals Hasbro and Mattel posted quarterly results and offered optimistic comments about how their intellectual property will boost their businesses.
Hasbro shares spiked more than 13% Thursday after the toymaker reported first-quarter revenue that topped Wall Street’s expectations. The Monopoly board game maker posted net revenue of $1 billion, beating the $878.4 million expected based on an average of analysts’ estimates compiled by Refinitiv. Revenue declined 14% year-over-year.
The toymaker posted a first-quarter net loss of $22.1 million, or 16 cents per share, compared to net earnings of $61.2 million, or 44 cents a share, last year.
“First quarter results came in ahead of our expectations and position Hasbro to meet our full-year financial targets,” Hasbro CEO Chris Cocks said in a statement.
Other toy stocks, including Hasbro competitor Mattel and pop culture consumer company Funko, also jumped on Thursday. Funko is preapring to report first-quarter earnings next week. The toymakers signaled this week they will focus even more on leveraging the popularity of key brands to expand their reach.
Barbie maker Mattel posted first-quarter results after the close on Wednesday that beat revenue expectations but fell short of expectations on the bottom line. The company continued to face higher costs and waning toy demand.
The toy industry at large has seen a slowdown since pandemic-era highs, when parents were eager to buy toys to keep newly home-bound kids entertained. Along the way, inflation raised prices for toymakers like Mattel — and consumers largely backed down as toy prices became increasingly expensive.
The Mattel booth on the convention floor at Comic-Con International in San Diego, California, July 21, 2022.
Bing Guan | Reuters
Amid the challenging toy and game market, both Hasbro and Mattel are eyeing a future increasingly focused on intellectual property.
On Monday, the rival companies entered a multi-year licensing agreement which will see the launch of co-branded toys and games using each company’s popular brands.
Hasbro will produce Barbie-branded Monopoly games starting fall 2023, while Mattel will make Transformer-branded UNO games and Hot Wheels vehicles, slated for 2023 and 2024 releases, respectively.
The two toymakers have competed for licensing rights in the past. In 2022, Mattel won the license to make toys based on Disney’s princess lineup, beating Hasbro in the process. Previously, Mattel had lost the license to Hasbro in 2016.
Outside of their collaboration, the two companies are both making strides to expand the reach of their own IP as they gear up for major movie launches this summer. Hasbro’s “Transformers: Rise of the Beasts” from Paramount is slated for a June 9 release. Meanwhile, Mattel’s much-hyped “Barbie” movie from Warner Bros. is scheduled for a July 21 release.
Read More: Hasbro, Mattel shares rise after earnings