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It’s hard out there for toymakers right now. Despite efforts to bring in more revenue from IP-led entertainment collaborations, Hasbro and Mattel are both struggling to sell actual toys.
This is especially true for Hasbro, which continues to lag behind its main US rival.
Hasbro’s Q4 revenue dropped 23% and its full year revenue fell 15%, due to sizable declines in its consumer products and entertainment segments. The company said the annual decline in the former was due to “business exits, category trends and inventory management,” while the latter was “due to the writers’ and actors’ strikes.”
“2023 was a productive year for Hasbro, although not without some challenges,” CFO Gina Goetter said in a news release.
Mattel, meanwhile, fared better in Q4 with a 16% bump in net sales, but sales were flat for the full year. In addition, the company is now getting pressure from an activist investor to improve the performance of two of its most iconic product lines.
In a letter to CEO Ynon Kreiz earlier this month, Barington Capital acknowledged the “unparalleled success” of the Barbie movie and lauded the company’s “IP-led strategy,” but pointed out that its Fisher-Price and American Girl segments have “witnessed dramatic and consistent revenue declines over a multi-year period.”
The letter highlighted that those segments have been a drag on Mattel’s otherwise impressive revenue growth, and advised the company to either fix them or consider selling them off.
Overall, though, Mattel expressed optimism about the year ahead in its latest earnings call.
“Execution on our toy strategy was strong, considering we entered 2023 with a challenging retail inventory headwind and faced a toy industry decline during the year,” Kreiz told shareholders.
Hasbro similarly said it’s going into 2024 in a stronger position, despite issuing a downbeat outlook for the coming year. Inventories are down more than 50% YoY, and the company is transitioning its “entertainment strategy to an asset light and partner-led model.”