Hasbro outlines growth strategy rooted in licensing and with an emphasis on international sales

Hasbro paid Disney $165 million in the past 12 months, including some payments scheduled under an older contract for Iron Man and Wolverine, but also reflecting a revised license agreement covering additional properties, according to company executives during their recent earnings call. They also noted that licensing Tonka to a third party, Funrise, dragged down the preschool category revenues. "Our Tonka revenue is now higher-margin royalty revenue," says CEO Brian Goldner, "but on a year-over-year basis it is lower dollars."

The company is looking to license out one or two other brands. As the classic toy industry continues to shrink, Hasbro says its long-term focus is on different income streams, including licensing, digital gaming, its Backflip gaming studio, TV, and its participation in films based on its owned properties.

Where is the growth coming from?

Overall, international sales are fueling growth. The toy business in international markets is growing fast enough to pick up slack demand in the U.S.  Hasbro confirmed during the call that U.S. sales were down 5%, but international sales grew 11%, thanks to “brand-hungry consumers in Latin America, Russia and Turkey.” (Similarly, Mattel’s international sales were up 9%, compared with a rise of 3% in North America.)