Hasbro Grabbing Market Share

While Hasbro has done an incredible job of innovating and monetizing its franchise brands (with the August investor day highlighting even more ways to capitalize on improving mix), our thesis since 2015 has been that growing top line off an elevated base becomes more difficult over time, as Hasbro clocked significant top-line gains in 2015-16 from Star Wars: The Force Awakens with sales rising 13% in the fourth quarter of 2015 and 13% in 2016. In this vein, our long-term sales growth forecast normalizes around 5%, implying share gains continue (NPD pegs global growth through 2021 at 3%). Furthermore, we anticipate modest operating margin gains (around 20 basis points annually) as mix shifts to capitalize on more digital and content trends, plateauing around 18%.

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