Please ensure Javascript is enabled for purposes of website accessibility

Hasbro's New TV and Film Segment Show Early Signs of a Rebound

By Nicholas Rossolillo - Feb 11, 2021 at 9:57AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Last year's results will be an easy lap time to beat in 2021.

Toy maker Hasbro (HAS 3.23%) turned in its final report card for 2020, capping off a challenging year with a solid showing. Year over year, revenue and net earnings increased 4% and 10% respectively during the busy holiday shopping season, partially dragged down by lower partner brand sales (read Disney (DIS 3.69%)). 

Hasbro will begin lapping initial effects of the pandemic in the coming months, though, and its TV and filmed entertainment segment (formed via acquisition of Entertainment One) could provide an especially strong boost to financial results in 2021. Hasbro stock isn't the steal it was last spring, but there could be some fuel left in its tank this year.

A cameraman sitting behind a TV production camera.

Image source: Getty Images.

The return of TV and film production

2020 was a mixed bag for Hasbro. The pandemic helped the company make its transition to e-commerce in a big way as consumer activity online boomed. (Remember, Toys R Us, which had been the company's largest distributor, went bankrupt a few years ago.) Digital sales increased 43% in the year and topped $1 billion. The gaming segment (which includes video games) posted solid expansion thanks to bored households stuck at home.  

And though partner brand sales were down overall (Disney's Frozen 2 was a big deal in 2019), the company said Star Wars toys increased 70% even though, for the first time since 2014, no new sci-fi epic hit theaters this year. Chalk the increase up to the sale of "The Child" (aka Baby Yoda or Grogu) toys of The Mandalorian fame.  

In all, Hasbro posted a total revenue decline of 8% in 2020, although free cash flow increased 64% to $850 million (when acquisition costs associated with the eOne takeover are excluded).  

Segment Revenue


2019 (Including Results From Entertainment One)


Franchise brands

$2.29 billion

$2.41 billion


Partner brands

$1.08 billion

$1.22 billion


Hasbro gaming

$815 million

$710 million


Emerging brands

$480 million

$579 million


TV/film entertainment

$805 million

$1.02 billion



$5.47 billion

$5.93 billion


Data source: Hasbro.

But let's turn our attention to the struggling TV and film segment, now including eOne -- whose most famous assets are preschooler franchises Peppa Pig and PJ Masks, and which handled distribution of the film 1917 in the U.K. and Ireland. With the pandemic came a temporary shutdown of production, and thus a reduction in revenue, with shows and films getting delayed. However, the segment notched a 20% rebound in Q4 as Hasbro was able to complete some projects and monetize them via its TV partners. This area should continue to rebound throughout 2021 and has an easy year-over-year lap time to beat as the new in-house production studio gets rolling again.  

Deepening consumer engagement with its brands

Its first year as part of the Hasbro family didn't go so well for eOne, but 2021 will be the year the combined forces of the two companies will be unleashed. Hasbro CEO Brian Goldner said on the last earnings call that Hasbro will be launching a new line of Peppa Pig and PJ Masks toys in 2021. And eOne will begin reimagining popular Hasbro franchises. My Little Pony is getting a TV show reboot, for example. Goldner said more upcoming projects will be announced at the company's investor day on February 25.

What does this mean for Hasbro? Beyond its rebound story, the plan is for the company to unlock additional value from its toy franchises -- and do the same for eOne's kids shows with new toys and games. This is a new vertical for the company, giving it the ability to interact with the consumer via TV programs and movies in ways it couldn't in the past. For instance, the Transformers movies were licensed out based on Hasbro's ownership of the toy franchise. Going forward, it will be able to make shows and films directly with its portfolio. This is no Disney, but a vertically integrated entertainment business like this has nonetheless worked wonders for the Magic Kingdom.

Granted, Hasbro's results have been lackluster in recent years. It's just now getting up to speed selling merchandise digitally, and the eOne acquisition wasn't exactly timely given the events that unfolded last year. At 33 times trailing-12-month free cash flow, shares aren't a value the way they were at the start of the pandemic last year. But if Hasbro's TV and film segment can post a solid rebound and start contributing to the bottom line, shares could have room to run higher this year.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Hasbro, Inc. Stock Quote
Hasbro, Inc.
$85.74 (3.23%) $2.68
The Walt Disney Company Stock Quote
The Walt Disney Company
$97.78 (3.69%) $3.48

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.