The Numbers Are In

The toy industry is having a good year in 2021, as measured by the major public toy companies’ quarterly results to date.

Some observers had thought industry growth would slow in 2021 after a significant bump in dollar sales in 2020, fueled by the need to keep families occupied during the COVID lockdowns. In addition, toy companies have had to overcome the supply chain struggles that are plaguing their business.

But those concerns have not become reality so far, according to recently announced financial results:

  • For the first six months of 2021, Mattel saw net sales rise 43% over the same period in 2020 (41% in constant currency). In North America, in the second quarter alone, net sales and gross billings were both up 30%. Vehicles (including licensed Disney Cars products); dolls (including the Spirit license); action figures, building sets, games, and other (including Jurassic World and WWE); and infant, toddler, and preschool (including Thomas & Friends) all drove increases in North America. The international segment saw many of the same growth trends in the second quarter and in fact witnessed even better sales increases of 57% (47% in constant currency.)
  • Hasbro’s second quarter revenues rose 54%, better than expected, driven in part by increasing demand for Dungeons & Dragons and digital gaming (up more than 100%) and a jump in its television production unit (up 47%) as it started to come back from widespread pandemic-era shut downs. Revenue for consumer products, which includes both core Hasbro toy brands and licensed toys (with Marvel movies and TV series called out), jumped 33%. By brand, toys based on Hasbro’s own franchises were up 72% versus the second quarter of 2020, while partner brands (especially Star Wars, The Mandalorian, Disney Princess, and Beyblade, in addition to Marvel) were up 53%. Emerging brands, a segment that for Hasbro includes PJ Masks, Peppa Pig, and GI Joe, among others, were up 54%. The second quarter was an improvement over the first, when total revenues were up 1% compared to the previous year. For the first six months of the year, revenues were up 24% versus the same period in 2020.
  • Jakks Pacific reported its highest first-half sales results since 2018, with net sales up 35% in the six months ending June 30, compared to the same period last year. Consumer products were up 36% in the half compared to 2020 and 28% compared to 2019, while costumes (sold through Jakks’ Disguise division) were up 31% compared to 2020. One negative: Costumes were down 13% compared to 2019’s first half, which Jakks management attributed to a stronger entertainment slate in the earlier period.
  • In the first six months of the year, Spin Master’s total revenue rose by 39.1% (36.3% in constant currency), while gross product sales increased 24.6% (22.6% in constant currency). By business segment, digital games revenue increased 315.2%, thanks to higher in-game purchases in Toca Life World and growth in Sago Mini subscriptions, while entertainment and licensing revenue collectively was up 63.4%. By product category, preschool and girls’ products led the way with a rise of 48.1%, driven mostly by PAW Patrol. Sales in the boys’ category were up 26.9%, propelled mainly by Bakugan, Monster Jam, and Tech Deck, offset by DreamWorks Dragons.

NPD Group numbers issued last Friday confirm these trends. The researcher estimates that the worldwide toy industry (across 12 key global markets) grew 15% in the first half of the year versus 2020 and 28% versus 2019. All countries and all super-categories increased when compared to 2020, although some saw declines against 2019 results. Best-selling licensed properties in the first half of the year included Pokémon, Star Wars, and the Marvel Universe, as well as Barbie and L.O.L. Surprise. Neither of the latter are licensed toy lines but do have associated licensing programs and are classified among the licensed IP NPD tracks.

Of course, it remains to be seen how the rest of the year shakes out, given the uncertainty surrounding the delta variant and continuing supply chain issues, as well as the likelihood that most kids will be back to physical school, leaving them with less at-home time. Still, the first-half results of these four big, public players, and the industry at large, is reason for optimism in the toy world.

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