Hasbro cuts annual revenue view as weak toy demand clouds holiday quarter
(Reuters) — Hasbro (NASDAQ:HAS) cut its annual revenue forecast for the second time this year, joining rival Mattel (NASDAQ:MAT) to warn of choppy toy sales in the holiday quarter, sending its shares down 10% before the bell on Thursday.
It now expects fiscal 2023 revenue to fall 13% to 15%, compared with prior expectations of a 3% to 6% decline.
The toymaker's third-quarter revenue and profit also missed market expectations as shoppers cut back on non-essential spending.
Revenue from its core toy business fell 18%, blunting gains from a 40% surge in digital and licensed gaming revenue on strong demand for its digital games «Monopoly Go» and «Baldur's Gate 3».
Demand across the toy industry have weakened since a pandemic surge, as consumers re-allocate their budget to cover for household essentials against the backdrop of rising prices and higher borrowing costs.
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.
«Our plan for Q4 is to drive share over the holiday, exit the year with clean inventory… and a clear runway for introducing new product innovation,» CEO Chris Cocks said.
The Monopoly maker's net revenue fell 10% to $1.50 billion in the third quarter compared with expectations of $1.64 billion, according to LSEG data.
Excluding certain items, it earned $1.64 per share, but missed analysts' average estimate of $1.70.
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