Hasbro’s sales drop at the end of a “very disruptive year” for the toy industry

On Friday, Hasbro posted a stronger-than-expected decline in holiday quarter revenue as the company behind Play-Doh and Monopoly took a hit from the Toys R Us bankruptcy and headwinds across Europe.

The Rhode Island-based company said fourth-quarter net revenue fell 13% from a year ago to $1.39 billion, below analysts’ expectations in a Refinitiv survey. of $1.57 billion. It was the fifth consecutive quarter of declining revenue for the toymaker, which attributed some of the weakness to fluctuations in exchange rates.

Brian Goldner, chief executive, said 2018 had been a “very disruptive year”, thanks to the collapse of Toys R Us, the toy retailer, and “a rapidly changing consumer and retail landscape”. .

He added that the company was not able to “recoup as much activity from Toys R Us over the holiday season as we had anticipated, as the effect of its liquidated inventory on the market had more impact than we and industry experts anticipated.”

Hasbro shares, which were up 11% year-to-date as of Thursday’s close, fell nearly 9% in premarket trading to $82.50.

The liquidation of Toys R Us also continued to affect the results of rival Mattel, which also saw a drop in revenue at the end of last year. However, its results easily exceeded Wall Street expectations, with sales fueled by stronger demand for Barbie and Hot Wheels.

At its franchise brands, Hasbro’s largest division, revenue fell 8% year-over-year in the fourth quarter. Its partner brands, which include Star Wars, Marvel and Frozen products, saw sales drop 20%; similarly, sales of its gaming brand fell 22%. However, its emerging brands, which include lines like Lost Kitties, saw a 5% increase in sales.

On Friday, Hasbro also noted that European shipments fell as the company dealt with a changing consumer landscape and reduced inventory amid a declining toys and games market over the past year.

The company earned $8.8 million or 7 cents per share in the three months ended Dec. 30, compared with a loss of $5.3 million or 4 cents per share in the quarter. last year. Adjusting for one-time items like after-tax changes, the company reported earnings of $1.33 per share, lower than analyst estimates of $1.67.

Looking ahead, Hasbro took a more optimistic tone, noting that it entered a new round of innovation this year for its Nerf toys. He also said his Power Rangers line, which he bought for $522 million last year from creator Haim Saban, will hit shelves in the second quarter.

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