Hasbro Sees Revenues Drop 14%, Works to Clear Inventory
Hasbro is finding that demand for toys is down, while digital gaming remains strong.
Overall, the branded entertainment company saw revenues decline 14% year over year during the first quarter, in which the current environment remained challenging and the company worked to clear retail inventory, Hasbro said in a Thursday (April 27) press release.
“First-quarter results came in ahead of our expectations and position Hasbro to meet our full-year financial targets,” Hasbro CEO Chris Cocks said in the release.
The news came a day after rival toymaker Mattel reported that its net sales were down 22% in the first quarter due to its retail inventory management and the challenging macroeconomic environment that includes high volatility and inflation.
Toymaker Lego reported March 7 that it “significantly” outpaced the broader toy market with a 17% jump in revenue in 2022 thanks to offerings designed to appeal to “builders of all ages, passions and interests.”
At Hasbro, the Consumer Products segment recorded a 23% drop as it turned to promotional activity to clear retail inventory, according to a presentation released Thursday.
Its Entertainment segment fell 19% in a move the company attributed to a shift in the release timing of new films and other content, the presentation said.
Hasbro’s Wizards of the Coast and Digital Gaming segment, on the other hand, scored a 12% gain in revenue. This was led by Magic: The Gathering, which was up 16%, and Dungeons and Dragons, which was up 13%, per the presentation.
“Wizards of the Coast and Digital Gaming delivered strong fan engagement,” Cocks said in the release.
Looking ahead, Hasbro said in the release that it expects the toy and game market to be flat or declining through the rest of the year, and its own full-year 2023 revenue to see a decline in the low-single-digits.
The company continues to implement its Blueprint 2.0 plan in which it aims to focus on “fewer, bigger brands” with an eye toward those with high growth and high profit, per the presentation.
“The year has started on plan as we reduce retail inventory levels and remain positioned to drive continued margin expansion,” Hasbro Chief Financial Officer Deborah Thomas said in the release. “As we work through our inventory, we continue to invest in our growth priorities, reduce costs and return cash to shareholders.”
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