Hasbro cuts revenue view, joins Mattel to warn of cloudy holiday quarter
HASBRO cut its annual revenue forecast for the second time this year on weak toy demand and joined Barbie-maker Mattel to warn of choppy holiday-quarter sales, sending its shares down 12 per cent before the bell.
The Monopoly maker expects 2023 revenue to tumble 13 per cent to 15 per cent compared to a prior forecast of a 3 per cent to 6 per cent decline.
Its third-quarter revenue and profit also missed market expectations, with revenue from its core toy business dropping 18 per cent as shoppers cut back on non-essential spending.
“Although the impact of the broader toy category declines has changed our Consumer Products and total Hasbro outlook, we are growing share in the categories where we compete,” CEO Chris Cocks said.
Hasbro saw a 40 per cent surge in digital and licenced gaming revenue on strong demand for its Monopoly Go and Baldur’s Gate III games.
Demand across the toy industry has weakened since a pandemic surge as consumers re-allocate their budget to cover for household essentials amid rising prices and higher borrowing costs.
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“Hasbro’s earnings reflect the reality of the challenges facing the broader toy industry this year. In many ways, 2023 has been a reset year,” said James Zahn, editor of trade magazine The Toy Book.
Analysts have warned that uncertain holiday spend and softer toy demand could prompt retailers to keep supply tight and offer steep discounts to avoid a pile-up like last year.
The maker of Transformers action figures expects its toy business to decline in mid- to high-teens for the year compared with mid-single digits decline it forecast earlier.
SEE ALSO
Net revenue fell to US$1.50 billion, missing estimates of US$1.64 billion, according to LSEG data. Excluding certain items, it earned US$1.64 per share, below expectations of US$1.70.
Rival Mattel’s shares sank 10 per cent after warning of slowing demand ahead of the holiday season, even as its third quarter benefited from the box-office success of Barbie movie. REUTERS
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