Kids looking to grab an Iron Man toy after being wowed by the hit Marvels The Avengers have some choices on store shelves, including leftovers from the 2010 movie Iron Man 2.
Stores, burned after years of slow-selling Hollywood toys, held back on orders for Avengers products.
With the film becoming a huge success, retailers have been peddling old Thor hammers and Captain America action figures at or close to full price.
The Avengers surprise illustrates the challenges marketers face capitalizing even on hits.
Hasbro, which licenses the rights to make many Marvel-related toys from Walt Disney Co., will generate about $150 million in sales from Avengers merchandise this year, according to Gerrick Johnson, an analyst in New York for BMO Capital Markets Inc.
Normally, a movie that makes more than $1 billion at the box office would produce $250 million to $300 million in toy sales, Johnson said.
Nobody thought the movie would be this big, said Isaac Larian, chief executive officer of toymaker MGA Entertainment, which doesnt make Avengers products. Retailers didnt buy deep and Hasbro didnt push hard. Sales took off and now they are catching up.
Second-quarter sales of boys toys at Hasbro fell 16 percent to $389 million from a year earlier, as strong growth in Marvel products failed to counter declines in other brands, the company said. Analysts project the company will register $4.27 billion in revenue this year, down slightly from last years $4.29 billion, so $150 million in lost Avengers sales translates into no growth this year.
Avengers is ahead of expectations and selling well, said Wayne Charness, a Hasbro spokesman. Retailers still have some inventory of Iron Man 2 and Thor, but we are well-positioned to meet holiday demand for Avengers products.
Last month, a Toys R Us store in central Los Angeles was selling a mask with packaging emphasizing 2010s Iron Man 2 film for $9.99. The same mask in an Avengers wrapper was offered for $11.99 nearby.
The Wayne, N.J., retailer has stocked its shelves with older Iron Man 2, Captain America: The First Avenger and Thor movie products for an avid collector base, as well as kids, according to Bob Friedland, a spokesman.
Hasbro has gained 18 percent this year, trailing the 28 percent gain of its larger competitor, Mattel. In March 2011, Hasbro traded at a 37 percent premium to Mattel, based on a multiple of earnings. Mattel, with a price-earnings ratio of 15.7 now, is at a 13 percent premium to Hasbros 13.9.
The Avengers has taken in almost $1.5 billion in theaters worldwide since its May release, becoming the top- grossing film this year and the third-highest of all time, after Avatar and Titanic, according to Box Office Mojo, an industry researcher.
Robert Iger, chairman and chief executive officer of Burbank, Calif.-based Disney, said in a May conference call that while orders for Avengers goods exceeded those of Captain America and Thor, two Marvel films last year, the interest was not commensurate with what weve seen in terms of the success of the movie.