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Hasbro's shares fell 2% to $81.80 in low-volume premarket
trading as a jump in freight and raw material costs bit into the
company's earnings.
While demand for toys has surged since the start of the pandemic
as children spent more time at home, factory shutdowns, a lack
of container ships and long port delays have caused costs to
surge and squeezed profit margins at Hasbro.
The company's first-quarter adjusted operating margin fell to
12.2% from 15.6%.
Hasbro reported adjusted net earnings 57 cents per share in the
quarter ended March 27, missing estimates of 61 cents per share,
according to Refinitiv IBES data.
However, the Monopoly maker's net revenue rose 4% to $1.16
billion, beating estimates of $1.15 billion, boosted by demand
for role-playing games "Magic: The Gathering" and "Dungeons &
Dragons".
The success of the unit that houses those games has drawn the
attention of activist investor Alta Fox Capital Management LLC,
which is pushing Hasbro to spin-off the business.
Hasbro said it expects fiscal 2022 operating profit to rise in
the mid-single digits, compared with its previous forecast of a
low-single-digit increase.
(Reporting by Uday Sampath in Bengaluru; Editing by Amy Caren
Daniel)
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