(CNN) — Christmas is still more than three months away. But it feels like the holidays are already here for Hasbro shareholders. The stock is up more than 45% this year and CEO Brian Goldner is feeling pretty bullish.
Goldner touted the strength of key brands such as Nerf, Play-Doh, Transformers and My Little Pony at Goldman Sachs conference in New York Wednesday.
He also talked about the Pawtucket, Rhode Island company’s recent decision to buy Canadian studio Entertainment One for $4 billion, which will bolster Hasbro’s presence in the pre-school market. Entertainment One (eOne for short) produces the popular Peppa Pig and PJ Masks television shows.
“Kids are increasingly engaged with characters and story,” Goldner said, talking about the need for Hasbro to own the rights to top media brands.
But Hasbro also is inheriting a music business through the eOne deal. eOne owns labels that produce music by the popular folk rock group The Lumineers and it recently bought the rights to the catalog of legendary rap label Death Row Records, which includes music from Dr. Dre, Snoop Dogg and the late Tupac Shakur.
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The music library is valuable and adds a lot of cash flow, Goldner said Wednesday. He also pointed out that eOne often sells music rights to media companies for use in movies and TV shows, which also is a plus. But he declined to talk about what specific labels Hasbro would consider to be core assets.
Hasbro’s stock has outperformed rival Mattel this year. Shares of the Barbie, Fisher-Price and Hot Wheels owner are up just 12% this year. But both have rebounded after a tough 2018, a year when one of its key retail partners, Toys “R” Us, filed for bankruptcy and shut its doors in the United States. The chain is set to make a bit of a comeback though later this year under new ownership.
Goldner added that the company is also having success with other big retailers that sell toys. Amazon, Walmart and Target are now among Hasbro’s top toy selling partners. The same is true for Mattel.
Both toy companies are also hoping to take advantage of their core brands by turning them into movie franchises, a move that has already been successful for Hasbro with Transformers. Goldner said Wednesday that the company has high hopes for new movies in the works tied to the G.I. Joe and Micronauts lines of toys.
There is one big risk that could hurt Hasbro and the rest of the toy industry: more tariffs. Goldner said if new tariffs on toys from China go into effect in mid-December, that could add some “choppiness” to the business going forward.
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