Klosters Toy Manufacturer Newsletter June 1, 2019

May 29, 2019 3:56 PM ETMAT, HAS, JAKK, SNMSF, VTKLF, FNKO
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Special Situations

Contributor Since 2009

Lutz is an acknowledged expert on the toy space. His clients include one of the top three U.S. banks and one of the top three non-public toy companies worldwide. Between 1984 and 2002, Lutz was the CEO at five different manufacturing companies catering to U.S. and international mass retailers. He's lived on five continents and speaks six languages.


He started his business intelligence consulting practice in 2003 and he derives his information from three primary sources. The first is his proprietary retailer panel, which includes Wal-Mart, Target, J C Penney, Kohl's, Gamestop, Dollar General, Barnes + Noble and Learning Express. This panel provides him with sell-through data, shelf space changes, inventory levels and other pertinent metrics governing the major companies and products active in the two industry categories. The second is national buyers at 30 leading retailers in 17 large country markets. These provide color on trends and issues that have a bearing on the major manufacturers and products in the two industry categories. The last is mainly Chinese third-party manufacturers who provide insights into supply and inventory issues affecting the major companies or products in the two industry categories.

Lutz consults with banks and hedge funds, and hence does not trade in any stocks associated with companies active in the spaces he focuses on. Lutz also is a monthly contributor to Seeking Alpha. He also publishes a monthly Toy Newsletter, which can be found on his website, www.klosterstrading.com.

Summary

  • This is a summary of all major developments at Mattel, Hasbro, Leapfrog/VTech, Jakks Pacific, Spin Master and Funko in May based on feedback from national buyers at 32 retailers worldwide.
  • It assesses sell-through data for the months of April and May for these six manufacturers in terms of overall performance as well as individual category performance.
  • It provides charts showing the top five brands in Fashion Dolls, Action Figures and the Learning Space worldwide at 32 retailers in 18 toy markets at the end of May.
  • Itprovides market share changes for Fashion Dolls, Action Figures, LearningProducts and Board Games at the end of May worldwide.
  • Incidentally, I will be issuing a review of theAction Figure Market worldwide with focus on Hasbro, Mattel, Spin Master,Jazwares, Just Play and Funko in the course of June. All subscribers to my JuneNewsletter, be that on a yearly or monthly basis, will be sent this reportautomatically.

Detailed Page Index:

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Contents

1

1

OVERALL CAVEATS

All projections are based on sell-through, not shipments, reported by 32 retailers in 18 countries – 9 retailers in 3 countries in North America; 10 retailers and 5 countries in Europe; 4 countries and 5 retailers in Asia; 2 retailers in 2 countries in the Pacific area; 2 countries and 3 retailers in Africa and the same in Latin America

1

2

U.S. Box Office Performance

Box Office results for period January 1 to May 25 for both 2018 and 2019 for licenses held by Hasbro, Mattel, Spin Master and Jakks Pacific

2

3

MATTEL

2

3.1

April and May performance

Sell-through April and May for company; outlook for rest of the quarter

2

3.2

Boy/Girl Category

2

April and May performance

Sell-through April and May for Category; outlook for rest of the quarter

3

Top Fashion Doll IPs in each major market

Calculated on the basis of feedback from 32 retailers in 18 major toy markets.

3

North America

Top five IPs in 3 markets at 9 major retailers; commentary on performance

4

Europe

Top five IPs in 5 markets at 10 major retailers; commentary on performance

5

AustralAsia, Latin America, Africa

Top five IPs in 10 markets at 12 major retailers; commentary on performance

6

Fashion Dolls Worldwide

Overall performance in May by Mattel, Hasbro, MGAE, Just Play and Spin Master

6

Special Events

BTS and DC Comics license; potential bid for Disney Princess license by Mattel

6

3.3

Fisher-Price

6

April and May performance

Continued problem due to Rock ‘n Play recall; sell-through April and May for Category; outlook for rest of the quarter

7

3.4

American Girl

April and May performance

7

3.5

Mega

April and May performance; Detective Pikachu impact

7

4

HASBRO

7

4.1

April and May performance

Sell-through April and May for company; outlook for rest of the quarter

7

4.2

The Boy Segment

7

April and May performance

Sell-through April and May for Category; outlook for rest of the quarter; Aladdin.

8

Top Action Figure IPs in each major market

Calculated on the basis of feedback from 32 retailers in 18 major toy markets.

8

North America

Top five IPs in 3 markets at 9 major retailers; commentary on performance

8

Europe

Top five IPs in 5 markets at 10 major retailers; commentary on performance

9

AustralAsia, Latin America, Africa

Top five IPs in 10 markets at 12 major retailers; commentary on performance

10

Action Figures Worldwide

Overall performance in May by Mattel, Hasbro, Spin Master, Jakks Pacific, Jazwares, Just Play, and Funko

11

4.3

Girls properties

April and May performance – Dis Princess, Moana and Pony

11

4.4

Preschool

April and May performance; Lion King Hasbro versus Funko

11

4.5

Games and Puzzles

11

April and May performance

April and May sell-through performance

11

Position in each major market

Hasbro’s performance calculated on the basis of feedback from 32 retailers in 18 major toy markets.

12

North America

Hasbro’s position in 3 markets at 9 major retailers; commentary on performance

13

Europe

Hasbro’s position in 5 markets at 10 major retailers; commentary on performance

14

AustralAsia, Latin America, Africa

Hasbro’s position in 10 markets at 12 major retailers; commentary on performance

14

Hasbro Position Worldwide

Market share changes between June 2018 and May 2019

15

5

LEAPFROG/VTECH

15

5.1

April and May performance

Sell-through April and May

15

5.1

Top Learning Products in each major market

Calculated on the basis of feedback from 32 retailers in 18 major toy markets.

15

North America

Top five IPs in 3 markets at 9 major retailers; commentary on performance

16

Europe

Top five IPs in 5 markets at 10 major retailers; commentary on performance

17

AustralAsia, Latin America, Africa

Top five IPs in 10 markets at 12 major retailers; commentary on performance

19

Learning Product Positions Worldwide:

Performances of Vtech/Lf, Mattel, Melissa + Doug, Spin Master, MGAE, Learning Resources, Elanco and 4M in the Learning Category

19

6

JAKKS PACIFIC

19

6.1

April and May performance

Sell-through April and May; Godzilla

19

6.2

Special Events

Gigantosaurus

19

7

SPIN MASTER

19

7.1

April and May performance

Sell-through April and May

20

7.2

Games (includes Gund) - April and May performance

Sell-through April and May; with and without Gund

20

7.3

Remote Control/ Interactive - April and May performance

Sell-through April and May; Hatchimals

20

7.4

Boys Action Figures and HiTech - April and May performance

Sell-through April and May; Bakugan, Dragons and Twisty Petz

20

7.5

Preschool and Girls - April and May performance

Sell-through April and May; Paw Patrol and Party Pop Teenies

20

7.6

Outdoor - April and May performance

Sell-through April and May; Swimways

20

8

FUNKO

Sell-through April and May; Swimways

20

CAUTION

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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