Hasbro CEO: Streaming is a driving force in connecting with consumers and merchandising

Hasbro CEO Brian Goldner joins Yahoo Finance’s Alexis Christoforous, Brian Sozzi and Dan Roberts to discuss how the toy maker has weathered the coronavirus outbreak.

Video Transcript

ALEXIS CHRISTOFOROUS: We sure could use a little good news right now. And we are hearing that toy sales are actually up during this pandemic. Joining us now is Hasbro CEO Brian Goldner. Thanks so much for being with us. And I'm going to take a wild guess here and say that educational-type toys are the ones you're selling the most of right now. Is that true?

BRIAN GOLDNER: What we're really seeing is that, clearly, people are all together and they're spending time together. And our games business is quite robust. You know, clearly people know our games brands, from Monopoly to the Game of Life to Operation and so many other games. People want to be able to spend some time together, quality time together connecting.

So games have performed incredibly well and are continuing to see very strong demand. Play-Doh products, as kids are entertaining their creativity, as parents are looking for ways to educate their kids and allow them to accomplish developmental milestones, clearly another area of growth for us and, you know, a number of other products in the Playskool arena that are doing well for us. And then our partners, which we can talk about, have also advanced a lot of their home entertainment windows for their motion pictures, which have benefited our brands-- brands like "Frozen" and "Star Wars."

BRIAN SOZZI: Brian, always good to speak with you. You know better than anyone that major movie releases drive toy sales. But you have seen Disney come out here, delay, I believe, "Mulan," "Black Widow," a couple of others. How will that impact the toy industry in the months ahead?

BRIAN GOLDNER: Well, look, I think there is still a factor of when, in fact, people are going back to retail and that timetable and going from social distancing and spending time in homes to making that pivot to getting back to work, and then back to more normalcy, I think, will have an impact. Clearly, people are expecting that third and fourth quarter, we get back to more of that cadence and that rhythm. I think the industry, entertainment industry is reflecting that.

Our own entertainment business is reflecting that, clearly. There'll be some elements of first quarter episodic deliveries that may not happen in first quarter. It may get finished in the second quarter because, of course, we have editors and others working to finish episodes of television programming. I just think it all gets shifted back a bit.

DAN ROBERTS: Brian, Dan Roberts here. I'm glad you mentioned streaming because I know that you guys recently re-upped your contract with Disney for Marvel and "Star Wars" toys. You know, Baby Yoda has been such a merchandising hit. And I think Brian Sozzi made a good point, about, you know, movies being delayed in theaters. But the flip side of that is that, Disney and others-- like Universal with "Trolls"-- are now releasing movies earlier than planned on streaming or releasing them earlier for rent.

And I guess I'd ask, well, whether you might actually see a positive bump from that, the idea that, well, if more people are watching streaming shows and streaming movies and they're at home, which has helped toy sales, ergo, maybe you see a boost for the toys that have some kind of connection to movies or shows. And obviously with Baby Yoda being such a mega hit, I think we've seen the theory that, you know, new streaming shows are going to have to try to have of kind of one character, one thing that can be duplicated across various industries and toys and merchandising and licensing. So talk to us about that and just how much Disney is really driving sales for you guys, how much of your boost lately is thanks to Disney and to Baby Yoda.

BRIAN GOLDNER: Well, our most recent sales are probably most thanks to people's embracing of our games business and our Play-Doh business. That's what we're really seeing accelerate now in the first quarter, those opportunities for people to play together and connect and make really robust connections around brands they love, with the rules of the game that they know and wonderful brands that have been shared for generations. That's all really present.

However, what you're bringing up are a couple factors. One is, you know, we clearly have seen that streaming has become more of a force in making connections with consumers and driving merchandising. It's always been the question, could streamed content drive merchandising? And clearly Baby Yoda has done that.

We saw that in the fourth quarter with some of our Black Series product directly related to "The Mandalorian." Our pre-sales around Baby Yoda have been incredibly robust. And we're very excited to begin to ship Baby Yoda late spring. We still expect to get Baby Yoda in markets. But consumers are excited about that and also excited about the second season of "The Mandalorian," which comes later in the fall.

We're also seeing that, overall, "Star Wars" sales are performing well year-to-date, because the movie was, obviously, incredibly popular. And then the home entertainment window has come more quickly, as has "Frozen," as Disney has advanced, those windows and made those home entertainment windows available to consumers more quickly on Disney Plus. We clearly see Disney Plus as a major advantage to Disney and also to partners of Disney, licensees of Disney like Hasbro, as we look at our properties.

ALEXIS CHRISTOFOROUS: Brian, I'm very excited about your animatronic Baby Yoda. Everybody in my house is. So you're saying late spring for that?

BRIAN GOLDNER: No, not the animatronic product. That's more of a holiday product. And we just previewed that on another program. And through that morning show in that preview, we sold out of that preview product, the preorder product. That's more of a holiday product. But we'll have plenty of action figures and plush around Baby Yoda that will come late this spring and that we've shown several SKUs of product around Baby Yoda, and around the Mandalorian, which was already selling well in the fourth quarter, some products around characters that we could reveal earlier. Remember, part of this was the reveal strategy, where the filmmakers didn't want to reveal Baby Yoda until later, so therefore the product wasn't available till later.

ALEXIS CHRISTOFOROUS: Yeah. Brian, quick question about your supply chain because so much of the toy industry is reliant on the supply chain coming out of China. What's the status of that right now, as we see China sort of get back up and running?

BRIAN GOLDNER: Yeah, China is, principally, back up and running. In fact, our business, I'd say, by the end of this week, we're fully back up and running. So that means that, for the first quarter, there've been a few gaps. But now, at a full capacity as we're running forward, we see by April, maybe early May, we would make up those gaps and get fully-- all of our product fully available. They've done an incredible job.

Our teams have done an amazing job in Shenzhen and in Hong Kong and working through, obviously, their weeks of working virtually. And now in Shenzhen are back in office, obviously, abiding by all of the health protocols that we need to abide by and making sure our employees, first and foremost, are safe. But I would say that we're really back up and running in China. And it's giving us great access to those products being created there.

BRIAN SOZZI: Brian, given the pickup in demand, we've seen a lot of retailers do some extra hiring full-time. Are you doing any of that?

BRIAN GOLDNER: Well, we're not doing extra hiring, but we certainly have said we're going to continue to have our full employee base on board. We're paying everyone. As we go forward, principally, most of our company can work virtually. And that includes both E1 as well as Hasbro. And everyone's getting paid.

But we do have people who are without laptops whose jobs wouldn't call for a laptop, so therefore they're really not working. And yet we're paying them. And that includes co-ops and interns and others that have been with the company. We're paying those folks. So we'll want to continue to pay people.

We think that that's our responsibility, to continue to try to pay people. And we would love to see us move through the curve over a certain period of time, again, get back to normalcy over the right period of time, having gone through the curve in other developed economies, and then getting people back to work. But for now what we're doing is we're paying all our employees.

ALEXIS CHRISTOFOROUS: Well, that's certainly good news. Brian Goldner, Hasbro CEO, thanks so much for being with us today.