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Here's Why You Should Add Hasbro (HAS) to Your Portfolio Now

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Hasbro, Inc. HAS is riding on new product launches, strategic partnerships, major theatrical releases and increased focus on gaming activities. Additionally, owing to leverage in global retail network along with investments in new channels, Hasbro has witnessed solid growth in its e-commerce revenues.

Shares of Hasbro have gained 28.5 over the past year compared with the Zacks Toys - Games - Hobbies industry’s 14.1% rise. Notably, Hasbro’s earnings surpassed the Zacks Consensus Estimate in six of the trailing nine quarters.

Major Growth Drivers

Hasbro continues to invest in product development and innovation. It partnered with Paramount to enhance storytelling and content capabilities. The company invested in Boulder Media — the company’s animation studio — and increased digital capacities to drive sales. The company continues to release Transformers Franchise in all forms of entertainment, including movies, television and digital expressions. Hasbro plans to diversify revenues beyond retail sales and expand customer base. Going forward, the company plans to create a meaningful global merchandise program and support significant future partner brand initiatives, which include Disney+ for Star Wars and Marvel along with Disney Princess and Frozen.

This Zacks Rank #2 (Buy) company witnessed solid growth in e-commerce revenues in 2020, driven by efforts to leverage on its global retail network along with investments in new channels. During fiscal 2020, the company observed more than $1 billion in e-commerce revenues, up 43% year over year. E-commerce also contributed nearly 30% to global revenues in 2020. The company continues to focus on retailers to expand its online offerings. The company’s Digital Gaming and Entertainment revenues witnessed robust growth in first-quarter 2021. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Hasbro — which shares space with Electronic Arts Inc. EA, JAKKS Pacific, Inc. JAKK and Mattel, Inc. MAT —continues to focus on adapting plans to deliver a robust line-up of entertainment and innovation from E1 and its partners in 2021. Notably, on the content side, E1 production is gradually recovering through a new animated series on Netflix and Alien TV. The team also continues to develop and produce new content for Peppa Pig, PJ Mask and the My Little Pony 2021 feature film. Apart from this, the company completed production on 59 series across scripted and unscripted television and five feature films. With live-action TV and film production limited, cash spend totaled $439 million in 2020. During first-quarter fiscal 2021, the company spent nearly $147 million. Although scope for near-term theatrical releases remains uncertain, the company is optimistic about opportunities stemming from viewership and merchandise. It is in pre-production for the DUNGEONS & DRAGONS live action feature, which has a new release date of Mar 3, 2023.

Furthermore, the company witnessed robust gaming demand during the coronavirus pandemic. Hasbro has a supreme gaming portfolio and it is refining gaming experiences across a multitude of platforms like face-to-face gaming, off-the-board gaming and digital gaming experiences in mobile. The company stated that it is currently investing in longer-term larger game play. The company’s gaming category, which includes MAGIC: THE GATHERING tabletop, MONOPOLY, DUNGEONS AND DRAGONS and many other Hasbro games such as THE GAME OF LIFE, JENGA, CONNECT 4 and OPERATION, is performing well. During the first quarter of fiscal 2021, the company not only witnessed solid momentum in the toy and game market but also recorded fastest point-of-sale growth in the United States.

In a bid to expand its business globally, the company is introducing its business into emerging markets of Eastern Europe, Asia and Latin and South America. During first-quarter fiscal 2021, the company witnessed solid growth in the markets of Europe, North America and Latin America. Moreover, the company reinforced its five-year plan (2018 to 2023-24) to double its Wizards business.


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