Hasbro cuts revenue forecast as Hollywood strike to hit entertainment unit
HASBRO lowered its full-year revenue forecast on Thursday (Aug 3) as its entertainment segment, which includes eOne film and TV studio, is expected to take a hit from the ongoing strike by writers and actors.
The toymaker, however, beat second-quarter revenue estimates, sending its shares up 2.5 per cent in pre-market trading.
Hasbro also lowered its growth target for adjusted operating margin to between 20 basis points (bps) and 50 bps, from 50 bps to 70 bps forecast earlier.
The company said margins at its entertainment segment are expected to decline due to industry strikes as well as a US$25 million Dungeons & Dragons: Honor Among Thieves production asset impairment charge.
Thousands of Hollywood actors voted to strike in July, after talks with studios broke down, joining film and television writers who have been on picket lines since May and deepening the disruption of scores of shows and movies.
The company forecast fiscal 2023 revenue to decline 3 per cent to 6 per cent, compared with its previous outlook of a low-single-digit fall, as entertainment segment revenue is expected to drop between 25 per cent and 30 per cent.
The Monopoly maker’s net revenue fell 10 per cent to US$1.2 billion in the quarter ended Jul 2, compared with analysts’ average estimate of US$1.1 billion, according to Refinitiv IBES data.
Separately, the toymaker said it would sell its eOne film and TV studio to Lionsgate Entertainment for about US$500 million as part of its efforts to focus on more profitable brands. REUTERS
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