Hasbro reported a nearly 31 percent rise in quarterly profit, thanks to boy-oriented toys like Transformers, and despite being hurt by the strong dollar. Bobbi Rebell reports.
Let's hear it for the boys. Sales of toys for boys surged 21 percent at Hasbro in the holiday quarter helping overall profits beat analyst expectations. Strong sellers included action figures based on Transformers movies and characters from Marvel comics. Piper Jaffray's Stephanie Wissink: SOUNDBITE: STEPHANIE WISSINK, SENIOR RESEARCH ANALYST, PIPER JAFFRAY (ENGLISH) SAYING: "I think, this company has done a tremendous job in the face of some retail headwinds and some changes in the global market place, and really delivering against its franchise brands." Hasbro also hiked its dividend and boosted its share buyback program, adding to a great day for the stock. Needham's Sean McGowan: SOUNDBITE: SEAN MCGOWAN, MANAGING DIRECTOR, NEEDHAM & CO (ENGLISH) SAYING: "It's hard to poke holes in the performance. It's hard to see something that is completely unsustainable or driven by one product. Currency affected the quarter more than I thought it would, and I think it will be more of a headwind in 2015." Hasbro, which does about half of its business overseas, said results would have been even better without that impact. The dollar has surged about 20 percent against a basket of major currencies since May. But girl power could propel Hasbro forward. The company will soon be taking away key licenses to make Walt Disney Princess Dolls, including those from the movie Frozen, from ailing rival Barbie maker Mattel. Wissink says Disney was impressed with Hasbro's product innovation ability to move beyond just traditional packaged toys. SOUNDBITE: STEPHANIE WISSINK, SENIOR RESEARCH ANALYST, PIPER JAFFRAY (ENGLISH) SAYING: "I think, ultimately, you see Hasbro going in and winning a major piece of business with Disney based on a very creative approach to maximizing content value, and, I think, what we have seen from Mattel, unfortunately, is that they haven't necessarily adopted that same approach. They have been very focused on their legacy brands in trying to revive brands that are facing very direct competition from some of these entertainment backed properties." Both, Mattel and Hasbro, still have to compete with perhaps the toughest rival of all - online and mobile games: SOUNDBITE: SEAN MCGOWAN, MANAGING DIRECTOR, NEEDHAM & CO (ENGLISH) SAYING: "One of the things, I think, is very clear is that, if what kids can do online is free, it's hard to compete with free, it's really hard to compete with that revenue model." Making finding that next big hit off line even more key to the bottom line.