Shortly after joining toymaker Hasbro (HAS) as a senior executive more than a decade ago, Brian Goldner took his 5-year-old daughter, Brooke, on a tour of headquarters. She wasn’t impressed. “She put her hands on her hips and said, ‘Dad, the way I see it, you don’t have any toys for girls,’ ” recalls Goldner, who became chief executive officer in 2008. A lot has changed since. Thanks to improved consumer research about how girls play and revived brands such as My Little Pony, Hasbro has found success beyond its boy-focused Transformers and Star Wars toys. That’s helped it gain on Mattel (MAT), the dominant company for girls toys with its Barbie and American Girl dolls.
Hasbro says revenue from its girls division rose 26 percent in 2013, topping $1 billion for the first time and more than tripling its $300 million in 2003 sales. That helped offset a 22 percent drop in sales from the boys unit last year, leaving companywide sales little changed at $4.1 billion. “The girls business is the strongest part of the company, and 10 years ago they were not really considered a player,” says Needham analyst Sean McGowan.
Hasbro’s turnaround with girls started with the My Little Pony line. The brand, backed by a popular animated series, had been an important part of the company’s success in the 1980s. By the late 1990s, My Little Pony languished, and Hasbro eventually shelved it. The toymaker reintroduced My Little Pony in 2003. After its research and testing showed friendship and working together were central to girls’ play, Hasbro focused its accompanying television show on those themes. Sales for the line have tripled in the past three years.
The company also revived Furby, a computerized talking creature, in 2012 after an absence of more than 10 years. Last year, Furby surpassed My Little Pony as Hasbro’s top-selling girls brand. Furby and My Little Pony follow a strategy Hasbro established with Transformers. Seeking to rely less on licensed brands that require royalty payments to other owners, the company a decade ago brought back the homegrown line of vehicles that transform into robots and expanded it through a new TV show and feature-length films.
Goldner says new lines such as Nerf Rebelle are evidence that Hasbro is getting better at understanding girls’ play patterns. At first glance, Rebelle, with its pastel plastic archery sets, looks like an attempt to use Nerf, one of Hasbro’s biggest boys brands, to feed off the success of The Hunger Games, whose female protagonist is a whiz with a bow.
Not so, says Goldner, adding that Hasbro spent two years developing the Rebelle line extension as a way to reach today’s active young females. “There are more girls playing organized and individual sports than ever before,” he says. We want to give girls “the opportunity to express themselves and play together in a more high-action way, and that’s what the brand is all about.”
After long targeting toys solely by age group, Hasbro is tapping research on the psychographics—preferences and lifestyle choices—of kids to appeal to different kinds of personalities within a group, Goldner says. Some girls want a finished doll to build stories around, while others want to create their own. As a result, a recent My Little Pony release is Pony POP, featuring customizable ponies. “This appeals to little girls who are more of what we call the makers,” Goldner says. “These are girls that want their own creative expression.”
Some analysts think that approach could help Hasbro develop more spinoff brands or categories. “They were treating girls toys before as a product with a life cycle or as an item,” McGowan says. “Now they’re really thinking about brands as a category that can be extended for several years.”