Offering consumer products that have a short life cycle is a tough business. The fickle nature of the customer means that the company has to have a quick-reaction team in place to respond to whatever trend may pop up without notice. If, however, a company can develop a solid revenue stream that has a predictable nature, it will be able to dabble and grow in areas where these kinds of “betting rights” can mean great gains.
Hasbro Inc., a game and toy designer, manufacturer and marketer, offers a broad and balanced program of toys and toy-related programs to the marketplace. From board games to video products and licensing, the company works in all facets of the game and entertainment marketplace. The toy marketplace is not for the faint of heart. It is extremely competitive with a fairly short product life cycle. Finding and developing a toy brand is a difficult task and one that Hasbro Inc. is famous for. Battle Ship, G.I. Joe, RISK, TONKA and Yahtzee are some of the toy and game brands that the company controls.
Branding of toys and games, however, is only a starting point for the company. Branding of toy product groups is also a strength of the company. It controls: Parker Brothers, PLAY SKOOL, Milton Bradley and TRANSFORMER brands, to mention a few. Although the company has been remarkably successful with its toy products, it is branding efforts that appear to be generating a significant amount of new growth. Currently, the company has license to the new Ironman movie with a full range of action products. The movie opens this coming May 5th and should be an indicator of how the company’s quarter will go. In terms of licensing, the company is keeping pace with the electronic age and all the potential licensing and branding options it has to offer. It has agreements with ES Design Inc. to market its products in forms that might appeal to a morphing and diverse younger demographic. Since this demographic is so much more attuned to the computer and electronic age, having agreements in place to adapt whatever product may be in vogue at the moment is important.
The company has been keeping a fairly consistent and profitable string of years moving forward. Its diluted net revenue was $1.97 per share for 2007, which was a nice increase from 2006s’ $1.29 per share. Looking at the company’s overall position is a difficult prospect at any one point through the year except at its fiscal year end. Generally, this is because it generates more than two-thirds of its income in the third and fourth quarters. This, however, is a slowly diminishing consideration as the company finds itself more involved with movie product licensing projects with Marvel Inc. Its association in this regard found large revenue generation from its Spiderman product lines last year and leads to great expectations this year with the May 5th opening of Ironman. In a market that is fairly dependent on disposable income, the company has positioned itself well with a range of price points and avenues to a variety of young “wanters.” It is a stable company that has laid a tremendous foundation and is set to produce revenue for the foreseeable future.
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