Hasbro reported third-quarter earnings Tuesday morning that fell short of analysts’ expectations as inflation weighed on consumers.
The toy maker also faced tough comparisons from a year ago when it benefitted from multiple film releases such as “My Little Pony: A New Generation” and “Come From Away.” Surging inflation added to the pressure.
“As expected, the third quarter is our most difficult comparison and was further impacted by increasing price sensitivity for the average consumer,” CEO Chris Cocks said in an earnings release.
Shares were down about 1.5% on light volume in pre-market trading.
Here’s how the toy maker performed compared with Wall Street estimates, according to Refinitiv:
- Earnings per share: $1.42 vs. $1.52 expected.
- Revenue: $1.68 billion vs. $1.68 billion expected.
Revenue for the period fell 15% compared to last year, dragged down by a 35% decrease in entertainment revenue. Its Wizards of the Coast unit, which includes “Dungeons & Dragons” and “Magic: The Gathering,” saw revenues decline 16%.
As prices for goods and supplies surge, the toy and game giant has increased prices for products like Nerf Blasters and My Little Pony figures.
For the fourth quarter, the company expects flat results versus last year, buoyed by the “Magic: The Gathering” brand. The digital and trading card game has grown into the company’s first $1 billion brand and the 30th anniversary of the game occurs in the fourth quarter.
The company also pointed to several upcoming releases, including Marvel’s “Black Panther: Wakanda Forever” and the company’s own “Transformers: EarthSpark,” which the company will produce merchandise for during the fourth quarter and beyond.
With the holidays approaching, the toymaker said it plans to “sell through inventory” in the fourth quarter as it seeks to stick to its plan of focusing on fewer, bigger brands and more licensing.
Cocks told “Closing Bell” in early October that the toy market remains resilient even through bad times.
Read the earnings release here.
This is breaking news. Check back for updates.