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October 19, 2022: -On Tuesday, Hasbro reported third-quarter earnings that decreased short of analysts’ anticipation as inflation weighed on consumers.
The toy maker faced tough comparisons from a year when it benefitted from multiple film releases like “My Little Pony, A New Generation″ and “Come from Away.” Increasing inflation added to the pressure.
“As expected, the third quarter is our difficult comparison and was further impacted by surging price sensitivity for the average consumer,” CEO Chris Cocks said in an earnings release.
Shares were down by 1.5% on light volume in pre-market trading.
Revenue decreased 15% compared to the previous year, dragged down by a 35% decrease in entertainment revenue. Its Wizards of the Coast unit, including “Dungeons & Dragons” and “Magic, The Gathering,” experienced revenues drop by 16%.
As prices for goods and supplies increase, the toy and game giant has increased costs for products such as Nerf Blasters and My Little Pony figures.
The company expects flat results for the fourth quarter compared to the previous year, buoyed by the “Magic, The Gathering” brand. The digital and trading card game includes increased 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 leaves coming, the toymaker said it intends to “sell through inventory” in the fourth quarter as it seeks to stick to its focus on fewer, more prominent brands and more licensing.
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