Hasbro, Inc. at a Glance

Uppers

  • Top corporation in “play” industry
  • One of Fortune magazine's 100 Best Companies to Work For

Downers

  • Recent layoffs
  • Outdated facilities and infrastructure

The Bottom Line

  • While Hasbro has garnered an exhaustive list of awards and recognition, the company is in need of comprehensive updating.

About Hasbro, Inc.

It's all fun and games at Hasbro, the #2 toy maker in the US (after Mattel) and the producer of such childhood favorites as G.I. Joe, Play-Doh, Tonka toys, Transformers, Mr. Potato Head, Nerf balls, and My Little Pony. Hasbro has a significant relationship with Disney, producing merchandise for the entertainment giant's megabrands including Star Wars, Marvel (including Spider-Man, Thor, and Captain America), and Frozen and other Dreamworks features. Besides toys, Hasbro makes board games such as Scrabble, Monopoly, and Trivial Pursuit, as well as trading cards including Magic: The Gathering (through its Wizards of the Coast unit) and Dungeons & Dragons .

Operations

Hasbro divides its products into four brand categories: Franchise Brands, Partner Brands, Hasbro Gaming, and Emerging Brands.

Franchise Brands are the company's core growth drivers, and consist of seven brands that offer sustained revenue for the long term: Littlest Pet Shop, Magic: the Gathering, Monopoly, My Little Pony, Nerf, Play-Doh, and Transformers. Franchise Brands account for around half of total revenue.

Partner Brands encompasses Hasbro's licensed brands (principally from Disney) for which it makes toys and games. These include Marvel, Star Wars, Disney's Descendants, Dreamworks' Trolls, and Sesame Street.

Hasbro's Gaming portfolio counts such well known board games as Pie Face, Connect 4, Elefun & Friends, Jenga, The Game of Life, Operation, Scrabble, Trivial Pursuit, and Twister. The category also includes trading cards and digital games.

Emerging Brands consists of those brands Hasbro believes have potential to become Franchise Brands but need further development and investment. These include Baby Alive, Furby, Furreal Friends, Playskool, and Playskool Heroes.

Geographic Reach

More than 50% of Rhode Island-based Hasbro's total sales come from the US and Canada. Europe is its largest international market, accounting for nearly two-thirds of overseas sales, while emerging markets (including Brazil, China, and Russia) made up the rest. The toy maker operates in 40-plus countries across the Americas, Europe, and Asia, though almost all of its products were sourced from third-party facilities the Far East (mostly in China).

Sales and Marketing

Hasbro's products are sold through wholesalers, distributors, chain stores, discount stores, drug stores, mail order houses, catalog stores, and department stores, among other outlets. The company's top three customers are Wal-Mart (which accounts for nearly 20% of sales), Toys "R" Us (nearly 10%), and Target (nearly 10%). In the US, around 60% of the toy maker's revenue is derived from these top three chains.

Hasbro markets products via television and digital devices (including Netflix and iTunes). It also showcases certain new products at the American International Toy Fair, held each February in New York City.

Financial Performance

Hasbro's sales and profits have been steadily rising in recent years as demand for toys (especially preschool brands) has been buoyed by strong economic and population growth in North America and abroad.

In fiscal 2016, sales grew a further 13% to $5.0 billion amid growth in almost all segments and geographies. Particular highlights include 15% growth in the US and Canada, 9% growth in Gaming, and 28% growth in Partner Brands. The important Franchise Brands segment recorded 2% growth. The only product category to decline was Preschool, which fell by $7.6 million, or about 1%.

Net income grew 22% to $551.4 million due to higher revenue and improved margins, partially offset by a $32.9 million impairment charge relating to Hasbro's investment in Backflip.

Cash from operations increased 40% to $774.9 million due to higher net income and changes in impairment, deferred income taxes, and accounts receivable.

Strategy

Hasbro recently extended its Marvel and Star Wars licenses when it signed deals for all properties through 2020. The move has paid off big: the two franchises continue to generate box office-topping sales figures, with the annual December Star Wars release now all but assured to be that year's highest-grossing feature. The success of Disney's motion picture IPs has driven consistent year-on-year growth in Hasbro's Partner Brands segment.

Hasbro has also entirely revised its advertising approach. The company de-emphasised its advertising stalwart -- television -- in favor of digital channels. The social media platforms of Facebook, Instagram, Twitter and others have helped Hasbro create communities of millions of fans and subscribers. Additionally, in 2016 Hasbro increased its ownership stake in mobile game maker Backflip from 70% to 100% to further increase its brand touchpoints; and has teamed up with gaming titan Electronic Arts to create digital versions of Monopoly, Scrabble, and Yahtzee. Hasbro has also pivoted away from its famous mantra of "to sell to the parents, market to the kids" -- the wealth of data produced by digital showed that millennials, now entering parenthood, were likely to buy toys they themselves used as kids.

Mergers and Acquisitions

In 2016 Hasbro acquired Dublin-based Boulder Media, an animation company. Hasbro lacked an in-house cartoon creator; the acquisition will allow the company to expand its animation and storytelling.

In 2017 Hasbro increased its ownership in mobile games company Backflip from 70% to 100%.

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Hasbro, Inc.

1027 Newport Ave
Pawtucket, RI 02861-2500
Phone: 1 (401) 431-8697
Fax: 1 (401) 727-5099

Stats

  • Employer Type: Public
  • Stock Symbol: HAS
  • Stock Exchange: NASDAQ
  • Chairman and CEO: Brian D. Goldner
  • President: Johnathan A. Frascotti
  • Chairman and CEO: Brian D. Goldner
  • 2016 Employees: 5,400

Major Office Locations

  • Pawtucket, RI

Other Locations

  • Burbank, CA
  • Chino, CA
  • Exton, PA
  • Providence, RI
  • Allen, TX
  • Grand Prairie, TX
  • Longueuil, Canada
  • Cuautitlan Izcalli, Mexico
  • Oslo, Norway
  • Khimki, Russia
  • Newport, Wales
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