Potential industry slowdown in toy sales weighs on shares of Hasbro and Mattel

abcnews.go.com:

Hasbro’s third-quarter revenue performance missed Wall Street’s expectations and the company cut its full-year revenue outlook again as signs of a possible industry slowdown in toy sales heading into the holiday season weighs on jittery investors

Hasbro's third-quarter revenue performance missed Wall Street's expectations and the company cut its full-year revenue outlook again as signs of a possible industry slowdown in toy sales heading into the holiday season weighs on jittery investors.

Holiday shopping is traditionally a critical selling season for toy companies and can comprise a large portion of their annual toy sales. But this year there are concerns that a pullback in consumer spending due to inflation concerns may lead some to spend less on dolls, board games and other toys this season.

Consumer confidence dropped in September, as Americans continue to worry that interest rates will remain elevated for an extended period of time.

For the quarter, Hasbro's revenue slipped to $1.5 billion from $1.68 billion. Analysts polled by Zacks Investment Research were looking for higher revenue of $1.64 billion.

The Pawtucket, Rhode Island-based company now foresees full-year revenue falling 13% to 15%, driven by a softer toy outlook for its consumer products division, which includes toys, games, clothing, music and other categories. Its prior guidance was for a decline of 3% to 6%, which was an adjustment from a previous forecast for revenue to be down low-single digits.

Shares slid more than 12% before the market open on Thursday.

Hasbro posted a third-quarter loss $171.1 million, or $1.23 per share.

Stripping out one-time costs and amortization costs, earnings were $1.64 per share. This met Wall Street's view.

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