Whatever way you look at the box office receipts from My Little Pony: The Movie, one metric in which Hasbro does measure the success of the movie is in toy sales. On that end, it is doing its job. MLP broke its quarterly losing streak in the 3rd quarter as it was listed as one of the franchise brands leading Hasbro’s growth in the quarter alongside Nerf, Transformers, and Monopoly. Franchise Brands increased 7% as a whole while Gaming (which also included Monopoly) rose 22%. Emerging Brands were up 9% led by gains in Furreal Friends and Baby Alive. Partner Brands declined by 2% as gains in Star Wars, Sesame Street, Beyblade, and Disney Descendants were offset by declines in Yokai Watch and Dreamworks’ Trolls.
Hasbro as a whole grew revenues by 7% while operating profit was relatively flat and was negatively impacted by the recent bankruptcy filing of Toys R Us. Hasbro is reported to receive 9% of its revenue from sales at Toys R U and is exposed to $60 million of the toy retailer’s $5 billion debt in terms of unsecured claims for payment.
“My Little Pony revenue increased behind the release of MY LITTLE PONY: THE MOVIE and successfully drove point-of-sale gains around the movie debut,” said Hasbro CEO Brian Goldner as transcribed by Seeking Alpha. “Our content to commerce model delivers multiple revenue streams, including entertainment and merchandise and we are well positioned in our investment.
“The film was successful in reinvigorating and energizing our core consumer base and our fan base, while inviting new fans into the brand. The film is yet to be released in a number of international markets and will be followed by the Home Entertainment window, an important element of expanding the audience.”
Goldner also shared that the movie was made on “modest budget” and that Lionsgate pre-sells the film in “substantial part of the global marketplace” and self-distribute in the UK and most of Latin America.
“The rest of the markets they are pre-selling, so you get that recoupment right up front around your production expense,” Goldner continued. “The movie itself, if you take it through the waterfall should be a contributor to the company over time. Obviously, it may not occur in the — by the fourth quarter this year, because obviously our expenses for producing the movie will hit in the fourth quarter this year, but again, remember it’s a modest budget. However, all the streams of income that it’s creating, including consumer products are toys and games business. The digital game that’s performing at a very high-level from Budge Studios and new games that are coming we think it’s a great model for the brand. And of course we continue with the 7th season of the television that’s appearing globally on linear television services as well as in stream services, it’s a very strong performer on Netflix and other services. We see this as a very good model for us go forward.”
Goldner still has belief in the model for MLP going into 2018 and thinks “the team is beginning to think about what our next movie might look like” and that brand will continue to halo strongly. Goldner also stated in the earnings call that revenues for MLP year-to-date are also now on the plus side.
Because of the Toys R Us bankruptcy, Hasbro expects more modest growth in the fourth quarter. However, they also expect MLP to be a big player in the months ahead as MLP heads to video in the near future and the show enters its eighth season in 2018. We are not certain as to interpret Mr. Goldner’s comments about what the ’next movie’ he mentioned will be a new MLP Movie, though fans wouldn’t mind that in the slightest. He feels that there was enough to reinvigorate the core consumer base and fan base, so we’ll see what happens over the next couple of quarters.