On Thursday, Hasbro Inc forecast annual profit below Wall Street estimates, citing a sharp decline in demand as customers cut back on spending on its toys and games due to rising prices.
Despite laying off 15% of its workforce, the maker of Transformers toys and NERF blasters has seen profits suffer as a result of rising freight and supply chain costs.
Toy demand has historically been resistant to economic uncertainty, but it fell sharply during the holiday season, with Hasbro rival Mattel Inc forecasting 2023 profit below expectations earlier this month.
Following an inventory glut last year, retailers have reduced orders to keep a tight lid on stocks, squeezing revenue at toymakers.
In 2021, Walmart accounted for approximately 13% of Hasbro's sales, while Target accounted for approximately 8% of sales.
Hasbro is facing a "challenging consumer discretionary environment," according to CEO Chris Cocks.
The toymaker stated that the licenses and brands it exited will cost it nearly $300 million in revenue in 2023. Last year, it lost the lucrative license to manufacture Disney Princess toys to Mattel.
According to Refinitiv data, Hasbro expects adjusted earnings in the range of $4.45 to $4.55 per share in 2023, well below analysts' average estimate of $4.88 per share.
Hasbro, known for brands such as Peppa Pig and My Little Pony, also predicted a low-single-digit percentage drop in annual revenue, while analysts predicted a 2.5% increase to $6 billion.
After reporting preliminary results late in January, the Monopoly board game maker reported revenue of $1.68 billion for the fourth quarter, which was in line with analysts' expectations.
In premarket trading, Hasbro shares fell 1.5% to $57.50.
(Source:www.usnews.com)
Despite laying off 15% of its workforce, the maker of Transformers toys and NERF blasters has seen profits suffer as a result of rising freight and supply chain costs.
Toy demand has historically been resistant to economic uncertainty, but it fell sharply during the holiday season, with Hasbro rival Mattel Inc forecasting 2023 profit below expectations earlier this month.
Following an inventory glut last year, retailers have reduced orders to keep a tight lid on stocks, squeezing revenue at toymakers.
In 2021, Walmart accounted for approximately 13% of Hasbro's sales, while Target accounted for approximately 8% of sales.
Hasbro is facing a "challenging consumer discretionary environment," according to CEO Chris Cocks.
The toymaker stated that the licenses and brands it exited will cost it nearly $300 million in revenue in 2023. Last year, it lost the lucrative license to manufacture Disney Princess toys to Mattel.
According to Refinitiv data, Hasbro expects adjusted earnings in the range of $4.45 to $4.55 per share in 2023, well below analysts' average estimate of $4.88 per share.
Hasbro, known for brands such as Peppa Pig and My Little Pony, also predicted a low-single-digit percentage drop in annual revenue, while analysts predicted a 2.5% increase to $6 billion.
After reporting preliminary results late in January, the Monopoly board game maker reported revenue of $1.68 billion for the fourth quarter, which was in line with analysts' expectations.
In premarket trading, Hasbro shares fell 1.5% to $57.50.
(Source:www.usnews.com)
Homepage
Send to a friend
Printable version
Share
