Target reported yesterday that toy sales for the 2019 holiday season disappointed and didn’t meet expectations. Toy sales were basically flat compared to 2018. Click through for more!
Not much was said about Star Wars, but one has to wonder what that could mean for the brand. BMO analyst Garrick Johnson is quoted in the article:
In the past, “Star Wars” films have been a massive driver of toy sales. But that property fell flat during the holiday season, despite the release of “Star Wars: The Rise of Skywalker.” Additionally, other holiday film releases didn’t lend themselves as strongly toward large toy lines.
It looks as though Star Wars toys failed to give sales a huge boost in 2019, even though there was no marketing push for Star Wars in the 2018 holiday season, with Solo already opening in May. So one would expect that a Star Wars movie in December would significantly boost toy sales overall. Apparently, there was no boost, which is not good at all. Here’s another quote from a CNBC article:
“While ‘Frozen II’ gave the toy industry a boost, the lack of other strong hits was often cited for lackluster industry performance,” Gerrick Johnson, analyst at BMO Capital Markets, wrote in a research note last week.
So Star Wars didn’t give toy sales a significant boost. Despite Triple Force Friday and a movie in theaters.
While Walmart has not reported their numbers yet analysts expect Walmart to have equally disappointing numbers. It remains to be seen what numbers etailers report. Industry experts expect that toy sales overall declined by another 2% in 2019, after a 2% decline in 2018. In the first nine months of 2019 toy sales declined by 5.5%, according to the NPD Group.
However, action figure sales increased in 2018, so an overall shrinking market doesn’t necessarily mean that action figures sales decrease as well. Unfortunately, for Star Wars fans at least, much of this growth came from Marvel, Jurassic Park, Beyblade or Fortnite in 2018, with Star Wars action figure sales declining in 2018.
Toys struggling at retail could mean that shelf presence is even further reduced in the future. As a result of the disappointing numbers Target’s stock price dropped, Hasbro and Mattel also saw single digit declines. It will be interesting to see if the apparent lackluster sales figures have any effect on the license which is up for renewal at the end of the year. It should, in theory, strenghten Hasbro’s position, since Star Wars toys no longer are the juggernaut they once were a few years ago and Disney is in no position to demand extremely high royalty rates anymore.
Hasbro will present their Q4 and full year 2019 earnings on February 11th. We should know a bit more then. And there is an investor event at Toyfair on February 21st, perhaps we will know by then if they intend to keep the Star Wars license!
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