Top Licensors See Growth in Q2

NORTH AMERICA–Hasbro, Meredith Corp. and WWE have all posted gains, highlighting growth across categories and sectors from publishing to entertainment.

April 6, 2018

Top Licensors See Growth in Q2

Meredith reports ‘record revenue’ for fiscal 2017, while WWE’s Live Events and Network division post thier biggest quarters ever.

NORTH AMERICA–Hasbro, Meredith Corp. and WWE have all posted gains, highlighting growth across categories and sectors from publishing to entertainment.

Meanwhile, toy maker Jakks Pacific saw declines due a dip in sales of its major film-based licenses. Retailer Build-A-Bear, however, saw positive results from its shift toward e-commerce.

Meredith Corporation

The world’s second largest licensor, according to

License Global’s

annual

Top 150 Global Licensors Report

, reported its fiscal 2017 full year. The company’s fiscal 2017 operating profit margin grew to 18 percent with total advertising revenues up 2 percent to $934 million, no small feat in the currently beleagurred publishing marketplace. Total revenue for the year grew 4 percent to $1.7 billion.

“We delivered record revenue and profit in fiscal 2017 as we continue to aggressively execute our multi-platform growth strategies, including rapid expansion of our highly profitable digital activities,” says Stephen Lacy, chairman and chief executive officer, Meredith.

“Additionally, we delivered strong cash flow and higher profit margins. This enabled us to continue successful execution of our Total Shareholder Return strategy.”

Hasbro

Hasbro, the world’s No. 6 largest licensor, reported that net revenues for its second quarter increased 11 percent to $972.5 million, compared to $878.9 million in Q2 2016. The toy and entertainment company also reported that net earnings increased 30 percent to $67.7 million, compared to $52.1 million in 2016.

Net revenues were up 16 percent to $494.4 million domestically (U.S. and Canada), and increased 6 percent to $426.6 million internationally.

Entertainment and licensing segment net revenues decreased 1 percent to $51.5 million, compared to $51.9 million in 2016; however, franchise brand revenues increased 21 percent to $545.7 million, driven by revenue growth in

Transformers

, Magic: The Gathering, Nerf and Monopoly.

WWE

WWE, the world’s No. 49 largest licensor, reported a revenue increase of 8 percent to a record $214.6 million in Q2. The entertainment company also reported that its Live Event and Network segments achieved their highest quarterly revenue in company history.

Licensing revenues for Q2 increased to 9.4 million, compared to 9 million in 2016, and WWEShop revenues increased to 8.4 million, compared to 7.5 million in last year. However, venue merchandise decreased to 6.8 million, compared to 8.7 million in the prior year.

WWE also saw a rise in digital engagement metrics, with video views up 18 percent and social media followers increasing 19 percent, as well as a 25 percent increase in global sponsorship revenue–which was driven by new deals with companies like KFC, Nestle and AT&T as well as gaming partners Psyonix, Square Enix and Activision.

Jakks Pacific

Toy maker Jakks Pacific, however, reported declines in the second quarter, with net sales down to $119.6 million, compared to $141.0 million reported in the year prior. The company’s gross margin of 28.2 percent was also down from 31.8 percent last year, due to the deleveraging of fixed costs, shifts in merchandise and closeout sales in select categories.

“The decline in sales for the second quarter is attributable to several factors, including the consequence of suspending sales to one of our retail customers and the decline of several of our film-related licensed properties,” says Stephen Berman, chairman and chief executive officer, Jakks Pacific. “Despite lower sales in Q2 and first half 2017 as we expected, we believe sales declines in the second half to be much more modest as we head into peak selling season.”

Build-A-Bear Workshop

Meanwhile, specialty retailer Build-A-Bear Workshop saw total revenues increase 2.8 percent to $77.2 million in Q2. The retailer also reported that consolidated net retail sales of $74.4 million, an increase of 0.7 percent compared to 2016; however, consolidated sales declined 0.9 percent and included a 1.5 percent decrease in North America and a 2.2 percent increase in Europe.

For the six months of fiscal 2017, the company reported total revenues of $167.9 million, compared to $170.1 million for the same time period in 2016. Consolidated net retail sales and consolidated comparable sales both declined slightly, but the retail saw gains in consolidated comparable e-commerce sales, which increased 2.8 percent, following a 5.6 increase in the first half of 2016.

“This performance reflects the successful execution of our stated strategy that is focused on transforming our operating model to capitalize on changing consumer shopping patterns while diversifying and growing revenue streams that leverage the power of the Build-A-Bear brand,” says Sharon Price John, president and chief executive officer, Build-A-Bear Workshop. “While we had a marginal decline in consolidated comparable sales, primarily due to continuing retail traffic challenges, this was more than offset through the successful implementation of our diversification strategies. This included the positive impact of the opening of more productive Discovery format stores and a new, innovative concourse shop model, as well as revenue from alternative sources, including experiential wholesale, international franchising and outbound licensing. We expect the continued disciplined execution of our stated strategies to move us toward our long-term goal of sustainable profitable growth.”

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