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Collectibles => Past Hasbro 3.75" Lines => Saga Collection '06 => Topic started by: CHEWIE on April 24, 2006, 10:25 PM
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Sorry of there is already a topic on this, I looked and didn't see one...
Mon Apr 24, 11:17 AM ET
NEW YORK (Reuters) - Hasbro Inc. (NYSE:HAS - news), the No. 2 U.S. toy company, on Monday said its quarterly loss narrowed as strong sales of board games and its products such as Playskool, Littlest Pet Shop, Nerf and Transformers offset slower "Star Wars" toy sales.
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But Hasbro warned the second quarter will be difficult compared with a year ago when its earnings jumped on strong sales of "Star Wars" merchandise ahead of the May 2005 release of the movie "Star Wars: Episode III-Revenge of the Sith."
"The second quarter will be challenging," President and CEO Alfred Verrecchia said on a conference call. "We shipped $147 million of 'Star Wars' product in second quarter of '05. Even if our first-quarter trend of an approximate 50 percent fall-off continues, we will have to make up over $70 million in volume."
"Star Wars" products, which include lightsabers and action figures, accounted for 16 percent of Hasbro's revenue in 2005. But with no new movie release set for this year, sales of "Star Wars"-related items are expected to drop.
Hasbro shares fell 2.6 percent to $20.37 in morning trading on the New York Stock Exchange.
FIRST-QUARTER LOSS
Hasbro posted a first-quarter loss of $4.9 million, or 3 cents per share, including a stock-based compensation expense of 2 cents per share. On the same basis, the year-ago net loss was $7.2 million, or 4 cents per share.
The company was not required to report its earnings including stock compensation a year earlier. On that basis, excluding the stock-option expense, its year-earlier net loss was $3.7 million, or 2 cents per share.
Analysts, on average, expected a loss of 2 cents per share, including stock-based compensation, according to Reuters Estimates.
It is not uncommon for toymakers, who ring up the bulk of their profits during the fourth-quarter holiday shopping season, to post losses in the seasonally slow first quarter.
Hasbro's revenue rose 3 percent to $468.2 million, beating analyst targets of $427.3 million.
Revenue in its North American segment rose 7 percent to $310.3 million, boosted in part by sales of board games such as Candy Land and Scrabble. International segment revenue fell 5 percent to $145.5 million, hurt by a foreign exchange impact of about $10.4 million.
Hasbro said shipments of "Star Wars" products in the first quarter were $51 million, down from $101 million the prior year's first quarter.
Toymakers have been suffering from an industrywide slump as electronic gadgets including video games and digital music players pull away once-captive young consumers, and rising costs and cutthroat competition eat into margins.
Hasbro's results came a week after larger rival Mattel Inc. (NYSE:MAT - news) reported an operating loss in its first quarter and forecast a challenging 2006.
After reading this article they released, how can anyone who really feel sorry for them that collects Star Wars stuff? They've made so many bone-headed decisions for the 2006 lineup that I think it's hilarious. How about these total bomb ideas (that most collectors knew were horrible ideas) -
- Force Battlers
- Unleashed Mini Figures
- Choppers
- Transformers
What am I forgetting here that was a dumb idea? Why couldn't they just stick with the regular line? Focus 90% of the work on the 3-3/4" scale, not the other way around Hasbro.
I get the feeling that Hasbro is saying Star Wars isn't popular anymore... if that's the case someone over there needs a slap in the face. They're just making horrible decisions with the line right now. Some good ones with the basic line, but they've concentrated too much on other sublines (that take up more retail space) that fewer people care about.
:)
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You're absolutely right. If they'd have scrapped that other junk and just concentrated on getting better numbers of basic figures to the pegs, it might be a different story.
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Agreed, I couldn't help but laugh when I read that report. Hasbro wasted so much money on Choppers, Force Battlers, Transformers, and Mini-Unleashed, and basically neglected the Basic line. Combine that with the fact that hardly any stores recieve as many cases of basic figs, the big sellers, as they did last year. It's a losing combination for everyone.
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Well that should be no surprise. The farther away you get away from the film the slower it will sell. But yeah all that other crap did not help either. Their idiotic raise in prices screwed them as well.
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Doesn't hasbro almost always post a first quarter loss or at very least post their lowest revenues of the year? So many toys bought in the fourth quarter of the previous quarter means people are buying fewer toys in the subsequent quarter.
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They always post a loss this time of year (or usually) and SW sales are half of what they were this time last year, but that's to be expected. The article (and maybe Hasbro, too) is somewhat misleading, because if SW weren't still a hot commodity, they wouldn't be rushing out assortments of ROTS figs to fill lingering demand.
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Like how their revenue rose but their first quarter was a loss??!
Agree with all here..too much experimental waste on poorly thought out, non selling lines ::)
They could stick with the basics 'literally' and be in better shape.
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There's other things listed as the focal points of the "loss" too in the article... It's rough all over, but Rob's right they always generally are on a downslope 1st quarter... X-Mas is over, retail cuts back...
It did, at least in part, read like Star Wars was unpopular and they'd have to rely on other licenses like Transformers and Marvel in the near future... That seems comical to me given the state of things at retail, however...
While things have been selling well for most of 2006 it seems, I am noticing some heavy back-up on the pegs in the last month or so. WM is just now catching up, and they are backing up with the same crap Target/TRU had last month... The fact they went from barren to slight pegwarming at WM's in my area is a good indication things aren't FLYING off the shelves like they were in late 2005.
Interest will inevitably diminish for the line... I think it's starting now, but I think it's still lively... A lot of the 1st quarter slowdown seems to be either Hasbro misjudging demand and being unable to supply retailers, or retailers not putting in the proper orders... Or both.
Now though, we're at May and things are starting to back up... Certain figures. Certain others aren't still, for whatever reason, and the line's lively I do believe... I think it slowed though some, so what they say is "true" to an extent, but I also think they're covering up that they didn't gauge demand properly (possibly tied with Retail misjudgment too of course).
Seemed like they really wanted to say that Star Wars just magically fell from under their feet in January though, and that they spent 3 months of dismal performance, and as a collector I find it more true that THEY didn't get the figures to retailers... Because I sure as **** was ready to buy and didn't find a whole lot out there in quantity.
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Disturbing that they called out Star Wars like that...almost like somebody was looking for a scapegoat...but like most of you guys, I'd like to look at:
SW Transformers
Choppers
LightSabers
Unleashed Mini's Battlepacks
Titanium (ships and figures)
Force Battlers
AttackTix
and those are just the Star Wars dregs...the whole company lost money...they might want to walk across the hall and see what Sigma 6 did to the GI Joe money they used to get.
I also agree that Distribution and Ordering are also two big factors that they did not even address.
It just worries me that if they single out "OUR" line, then they may cut it.
And from looking at their numbers, it is not that they lost money, their stock paid 2 cents less per share, making it a down trend in profits from last year. Only a fool would put 2006 expectations at the same level as 2005 performance. Mostly because of the movie year, but from our level...can they expect to sell as many figures as last year, when they re-pack more, articulate less and don't ship the good Army Builders in bulk?
just my 2 cents (which is a loss)
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You have to remember that last year at this time most retailers had 12 foot sections of SW product - that lasted for quite a while. Around August maybe?
Gaining that much space at retail makes a huge difference in sales.
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I know how they can improve sales, besides dumping all the crap, just put out better case ratios of all products. Obviously this applies to SW but there are other Hasbro lines that have crappy distribution as well. I hear guys and gals talking about this in the toy aisles as I see the same crap over and over again.
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The absolute junk they focused on has already been mentioned, but perhaps we should reiterate that the the figure selection for the first two waves of the Saga '06 collection didn't start with a huge bang:
Chewbacca rehash
Boba Fett rehash
Han with undersized Carbonite
Leia Boushh
Bib Fortuna
Barada
I'm a collector, so most of those are ok by me, but if you follow Hasbro's mantra of for the kiddies is there really any surprise that the first wave of 2006 was a dud?
Hoth:
Bren Derlin
General Veers
Snowtrooper rehash
Darth Vader rehash
AT-AT driver
General Rieekan redo
R2-D2
Gonk Droid
Again, how are you drawing the kiddies? Wouldn't the kiddies be more inclined to PT figures? Nah, never mind they can buy R2 and Vader. But weren't Derlin/Veers/Rieekan responsible for half the Hoth case? What rocket scientist thought that one up?
As indicated above, you've got your core lineup filled with undesirable product (poorly done, unnecessary repacks, etc.) packed in lousy ratios, where exactly is the surprise Hasbro?
Now had you gone merrily along and released the Geonosis/Coruscant waves first, you'd have probably retained the core kiddie market that gobbled up the ROTS stuff. Sure, you'd still have to deal with the Christmas hangover, but it would have flown a lot better than releasing some money "saving" waves.
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Everything mentioned here makes sense, it is too bad the license has been treated this way.
If they can't afford tooling to make another mid-size ship that people have been clamoring for (Sith infiltrator, cloud car, etc) Than what are we doing with choppers and transformers? Those things took some cash to get rolling, and had a pretty poor chance of being successful. Now that sours retail on Star Wars (it occupies shelf space and doesn't sell), which convinces Hasbro it needs to focus its' efforts on other brands. Sideshow is a nice example of someone taking a Hasbro licensed scale that has been on the market for 11 years and making it work- Give buyers a quality product with a clear way of purchasing it while it is desired, and watch it succeed.
And there is no denying that the first two waves of figures were doomed to fail to capture the interest of new young fans who have only experienced the prequels or even only Revenge of the Sith. I love OT toys, but 1st quarter 2006 was nothing short of abandoning the kids new to the line. The only PT items available were mini-figures at a 9.99 price point and metal ships. After 80 odd figures in 2005 for one movie, that was quite a change.
And don't forget UGH- making it even harder for kids and collectors to find what they want.
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To be honest this is what I would have expected from Hasbro. Basically they are saying that the line has lost popularity to the media to cover some bad decisions on their part in terms of the newer products (transformers, new unleashed etc). I would really like to see the profit line on the 3 3/4 line. I woudl bet that it is still profitable. So I don't think this means anything for the demise of the line. The 3 3/4 line is like the energizer bunny, it keeps going, and going, and going and will until that specific line is no longer profitable. I think that is some ways off yet.
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Sideshow is a nice example of someone taking a Hasbro licensed scale that has been on the market for 11 years and making it work- Give buyers a quality product with a clear way of purchasing it while it is desired, and watch it succeed.
Yeah, with a limited run of internet-only figures and a 150% price increase. I had to jump right out of the 12" game when Sideshow took over - $50.00 plus shipping per?!
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I think it's all the fault of one certain person for not buying enough Star Wars stuff.
You know who you are... and you made Hasbro mad. >:(
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Quite frankly, Hasbro is a little bit underwhelmed by the subscription rate...er.... number of SW toys sold first quarter.
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I think if there's any merit to the claim that the reason why they won't make any new ships is that to make a new mold is too expensive, then there really is no excuse for these transformers, force battlers, attack tix, and galactic heroes. All of these things are pieces of junk.
They should do away with all of that crap and concentrate solely on the 3 3/4" line of basic figures and vehicles. I can deal with the occasional wave of VTSC figures, although I still think they can incorporate 14 points into the basic line, at least they're doing it in the VTSC line.
There is no other toy line like Star Wars. Stores have a hard time keeping this stuff on the shelf. My Walmart got 15 cases of VTSC figures 1 week ago. That is 30 of each of the 5 figures. What's left as of today?
9 Han Endor
10 Greedo
2 Tusken Raiders
4 Luke Pilots
0 Biker Scouts
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25 total VTSC figures remaining, 125 VTSC sold in 1 week.
So 1 store sold $1,250 worth of Star Wars figures in 7 days. There is no other toy line like that.
Now, care to venture what an endcap full of transformers and force battlers would have sold? Maybe $100, and probably all by mommies buying it for their kids who know they like Star Wars but don't know exactly what they want.
They need to do away with all the crappy sub lines, and give us VTSC and 3 3/4" basic with new vehicles.
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And for ****'s sake stop shipping these horrendous plastic lightsabers, they're ridiculous.
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2 Tusken Raiders
And did you pick me up said Tusken Raiders?
Kevin
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And for ****'s sake stop shipping these horrendous plastic lightsabers, they're ridiculous.
I agree they are ridiculous, but those little $10 pieces of junk sell like crazy and they're reasonably durable. I keep them around so kids can pick those up instead of an FX saber. Lightsabers in general, whether basic or electronic sell like kookoo around here.
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Around here too. Being a big college town, I have seen frat boys being dozens of them for parties or greek week events. Same goes for varsity teams and sport clubs. These things move better than vehicles and second only to figures.
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Yeah, I have to give props to the lightsabers. Kids love those damn things.
I think LFL pushed Hasbro to develop the lines that aren't selling (Tformers, Choppers, etc.) to drive home the message that "Star Wars is Forever."
Star Wars is forever...but only in role play, props and figures!
;D
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The lightsabers are even shown in the Orkin Man commercials now! ha ha
I agree though, all these sublines are a waste. Concentrate on the basic line with supporting vehicles/small playsets. Much better than the crap they've tried to push with their other lines.
The funny thing is, we all saw this coming. ::)
:)
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Sometimes I really think Hasbro keeps an eye out on websites and boards like this one but then they do stuff that makes you wonder if they produce certain figures by sheer luck instead of knowledge.
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So, this afternoon I finally had a chance to listen to the Q1 2006 Hasbro, Inc. Earnings Conference Call (http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=68329&eventID=1275133) (click on section 2 to hear them talk about SW, a few minutes in).
For those too lazy to listen, in this conference call, they claim that sales of Star Wars for 1st Quarter of this year were at $51 million globally, compared to $101 million in 1st quarter 2005 (that number included all merchandise that was available in stores on April 3, 2005)! :o
They also go on to talk about how 2nd quarter will suck-ass since 2nd quarter last year had $147 million in Star Wars sales globally and they only expect to make half of that in this year's 2nd Quarter if they are lucky (and THAT is the whole reason the UGH promotion is in 2nd Quarter ;)).
And finally, in the Q-N-A portion, they talk a LOT about how they are banking on the Transformers Movie and Spider-Man / Marvel in 2007 to really pick them up going forward as they see more and more Star Wars drop-off... :(
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Thanks for posting that Jeff, always interesting to hear what they're saying about our favorite line here. Of course a drop off is to be expected from last year to this year - it was a movie year, and a very popular line overall it seemed. I know I've never seen so much action in the aisles with kids, parents, and collectors combined. But, it seems like this year Star Wars seems to be just as popular - at least when it is on the pegs. Things have been selling through pretty good up to this point, although a few figures are starting to sit here and there just like any other year. Sure, I'm sure its not ROTS volume, but it still does well. The thing is, it seems like there are some obvious fixes that we discuss here often that would help their line out immensely. I think dropping most of the "other" lines (particularly the crappy ones), focusing more with the figure line (make them all worth $6-$7 if that's what they are going to charge), and maybe even lessen the overall figures released in a year to some extent. There's so much stuff out there, I know I can barely keep up with just basic figure stuff and a few other things - I can't imagine if I was a kid (which is the market they consistently want to focus on). With them even admitting the big pushes for Transformers and Marvel (and I'm a Marvel/Spidey fan) next year, I'll be curious to see what type of attention Star Wars will get (it is the 30th anniversary after all). Hopefully they'll focus in on quality and not so much on quantity. Maybe its just because I don't have that big of a budget for collecting, but I honestly don't think I'd mind if they cut back to 30-40 figures a year (or less) and give them all the type of attention the VTSC seems to have - just at a cheaper price (or at least a little bit).
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Wouldn't it have been fun to interject in the call that "hey if it was actually available I might've bought some stuff in Q1". I mean, for most of the first 3 months of this year there wasn't a lot to pick from... Well, not out of the basic line anyway. 3 - 4 waves shipped, but none shipped heavily for quite a while... Here we are in May, and my WM stores are barren again after a brief spurt of having stuff. Most now only have a couple figures... 3 is the most I have seen in the last couple weeks.
Target and TRU are backing up with the usual suspects of Vader, Yoda, Poggle, and Derlin...
Beyond that, there's nothing out there really. not here anyway. Could SW be selling like **** right now because what's good can't be found, and the crap that sucks is overflowing (Choppers, Transformers, Force Battlers, erc.)? I get that they want to focus on kids some, but are kids even buying this stuff over the basic line?
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Interesting listen. This year I know this. IF I am at a Target at opening and it is the day they receive a shipment you can score new figures. Same thing with Walmart. IF your there on the night they get the new stuff, and IF you are willing to open the cases or get permission to do so you can get the new stuff. Finally, IF you know your secondary market of retailers, and if you either have some luck or can figure out their stocking days, you can score new product. Finally, you can order online and get your items after they hit retail (If you order from EE it seems). Bottom line, Hasbro should have 1)expected to sell less this year and built that into their business plan. IF I had not done that on the unit I led at a fortune 500 company, my Exec. VP would have had my head. Second, is the same issue that has been going on for years in a non-movie year. They need to ensure that more product is out. Now we are heading into the dry summer months and the Tatooine wave and Endor wave will probably be some of the tougher waves to find. Hasbro needs to take the blunt of their poor profits because they did not anticipate demand for their product, and yes Jesse, your right, they invested into lame new lines that their research should have told them would never have sold. The choppers and transformers should have came out with the movie last year, IF you wanted to gamble and see what they would have done. You use the momentum of a movie to bring out new stuff and build a following. Unfortunetly, I think both lines are rather lame, and are poor product choices.
What I would really like to see and be a fly on the wall, are the meetings between senior executives on what their strategy for the line is. So far, it sounds like they are planning on the line dying off a slow death. That's not good in the long term for the line. Just because they have a license doesn't mean we will always see product every year. Next year, yes due to the 30th anniversary. By 2010 though, I could see Hasbro issuing specific VOTC type figures or series of special figures each year, or every other year. I really believe that Hasbro will mis-manage the line such that it will eventually die off. Sad really.