Q1 results from the big toy companies have been coming thick and fast over the past few weeks.
On one hand, you could argue that they’re nothing to get too worked up about either way; Q1 is never going to be a make or break time of the year for a toy company, even less so when Easter falls in Q2. In the same way that you don’t ask an ice-cream salesperson how business is at Christmas, so Q1 – in toy terms – is merely an amuse bouche to the far more substantial fare to come.
That said, it can be interesting to note developing trends, media reaction to the numbers and some of the minor nuances which can get over-looked by people less familiar with the toy market. Hasbro’s results were well-received by media and analysts, with global revenue increasing by 2%, although European revenue fell by 4%. The performance of proprietary brands such as Nerf and Transformers was excellent, although partner brands (i.e. licensed ranges) were down by 18% – Trolls was a bright spot, but unfortunately not enough to balance a significant decline in Marvel and Star Wars numbers (more on that later).
In comparison, Mattel’s results came in for some relatively heavy-handed media criticism. Yet if you take American numbers out of the equation – and, let’s not beat about the bush, Mattel had a bit of a shocker in the US in Q1 – the international numbers declined by a mere 2%, which was marginally less than Hasbro’s European drop. Jakks’ widening Q1 losses were arguably the most troubling of the three, but they slipped under the radar somewhat, the advantage of being a somewhat lower profile, secondary player.
Here in the UK, Character Options announced a highly respectable turnover and profit, but admitted that the weakness of the pound had impacted on its figures. This is perhaps not the time or the place to dig up all the old Brexit arguments again, but while some business owners remain convinced that Brexit won’t adversely affect their business, it does seem that much of the evidence thus far points the other way (I wonder if they’ll feel the same when we come out of the single market and the customs union and they will be asked to fill in 48 different forms for every consignment….).
Also in the UK, internal disagreement is the order of the day at Hornby, where two rival groups of shareholders are fighting over the fate of chairman Roger Canham, rather in the manner of Arsenal fans arguing over whether Wenger should stay or go. I am fully expecting to see pictures of shareholders holding ‘Canham Out’ signs on social media any day now. I just hope all the internal in-fighting doesn’t derail the turn-around plan, upon which the future of Hornby would appear to hinge.
For those of you wondering what former Bandai marketing man Darrell Jones’ next move would be, I can exclusively reveal that he’ll be joining Vivid Toy Group as marketing manager, starting 8th May. He’ll be taking over from Kerry Tarrant, who will be joining Alpha Animation next week. We wish them both all the best in their new roles.
Argos launched a 48 page ‘Into the Movies’ leaflet in-store this week, which seemed to be slightly ahead of official embargo dates for a number of the movie lines featured. But I somehow doubt they’ll get anything more than a wrist-slap, and maybe not even that. I can just imagine the conversation at a number of licensees / licensors: “Are you going to tell them they shouldn’t have done that?” “No, you tell them.”
On the subject of the silver screen, Disney’s movie slate for the next few years was released this week. 2018 is nothing to write home about from a licensing perspective (although I bet Disney will try to claim that Wreck-it Ralph 2 will be the new Frozen at some presentation or another), but 2019…oh my word. Star Wars IX in May, Toy Story 4 in June, Frozen 2 in November – that is one heck of a slate.
I mentioned I’d return to the subject of Star Wars earlier; I gather there is a major – some might even go so far as to say aggressive – promotional initiative planned for early May, involving Disney, some of its highest-profile brands and its major licensing partner(s). Details are scarce, so I’d rather wait until I see the activation before making any specific comment. However, retailers who flagged this initiative up to me are at least pleased that the promotion is something they can be involved with, rather than the ‘direct online selling to the consumer’ approach currently being adopted by another licensee. But, all in all, it does seem to suggest that not only is there quite a bit of Star Wars stock hanging around at the moment, but moreover that the original strategy to turn the franchise into a continuous, seven-year sales juggernaut may have been a tad over-optimistic. Maybe there is something to be said for a long wait between movies helping from a merchandise perspective. Roll on Toy Story 4…