On Monday, Hasbro had their Earnings report for the third quarter of 2015. The common theme was how figures were negatively impacted by foreign exchange. This quarter foreign exchange (FX) had a negative of $132.4M. Factoring in the FX, revenues were flat and up 9% absent FX. Hasbro benefitted greatly from is licensing deals with Star Wars, Jurassic World and Disney Descendants.
Franchise brands grew 4% in Q3 2015 absent FX with Nerf, Play-Doh, and Monopoly all up in the quarter with or without the FX and 8% over nine months. Transformers was down for the quarter which again is the result of not having a movie to fall back on. Littlest Pet Shop was flat despite growth in the US. The remaining franchise brands, including My Little Pony, were up in constant currency.
For the quarter, Girls Division revenue was down by 28% factoring in FX and 19% absent FX. Those declines were led by Furby once again with “relatively smaller declines” for MLP. When asked about those declines, Hasbro’s CEO Brian Goldner had this response as transcribed by Seeking Alpha.
“I’ll give you a perspective on FURBY. It was a very big brand for us last year. In fact, Q3 last year sales in dollars was bigger than the first two quarters and represented about 37% of 2014’s revenues. Fourth quarter of 2014 FURBY’s revenues were 31% at the full year. So we’re going to see those headwinds through the end of the year. So it was very significant dollars.
“In Q3, we’re happy to see that our gross POS is up double digits. In MY LITTLE PONY, the core MY LITTLE PONY business, the pony’s part of the business, Friendship is MAGIC is up in the quarter and MY LITTLE PONY year-to-date is up a bit. It’s really in the timing of EQUESTRIA GIRLS. The special one on the air ins in September 17th and the translation in placement of that special happening throughout the fourth quarter in many markets around the world.
“I think in many ways it sort of reinforces our belief that programming support over the full calendar year is essential as you look at content storytelling and that it’s a little more challenging to put out a one-time per year special, although we do have lots of streaming short videos and other elements to support the EQUESTRIA GIRLS product line. It does impact our timing on that — on that part of the business certainly.”
Goldner also teased several new initiatives for both the core MLP brand and for Equestria Girls.
INSIGHT: It appears as though a lot of MLP stuff is back-ended towards the final quarter of 2015. We’ll see if that’s the case when Hasbro announces Q4 earnings in either January or February. There’s also Hasbro’s Investor Day onNovember 16th. It appears everything is down in terms of MLP, but the truth is ratings have been down for most every cartoon show right now and sales for toys such as Barbie and Monster High are down as well. Of course, there’s also that foreign exchange issue when you have a strong US dollar as we do now.
Yes, the 11-month hiatus for the show did not help matters, but MLP is getting a Season Six and a movie in 2017. No one in an official capacity has announced an end to anything in regards to MLP. We’ll cross that bridge when we get to it. So while things appear down for MLP, there are other things that need to be taken into consideration before declaring doom for the franchise.