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Elevated freight and supply chain expenses have also crimped
profits for the maker of Transformers toys and NERF blasters
even though it took steps to cut costs by laying off 15% of its
workforce.
Toy demand has typically remained resistant to economic
uncertainties, but it fell sharply in the holiday season, with
Hasbro rival Mattel Inc earlier this month projecting 2023
profit below expectations.
Retailers have cut back on orders to keep a tight lid on stocks
following an inventory glut last year, squeezing revenues at
toymakers. For Hasbro, Walmart accounted for around 13% of
sales, while Target made up for roughly 8% of sales in 2021.
Chief Executive Chris Cocks said Hasbro is facing a "challenging
consumer discretionary environment".
The toymaker said it will take a nearly $300 million hit to 2023
revenue from the licenses and brands that it exited. It lost the
highly-lucrative license to make Disney Princess toys to Mattel
last year.
Hasbro said it expects 2023 adjusted earnings in the range of
$4.45 to $4.55 per share, well below analysts' average estimate
of $4.88 per share, according to Refinitiv data.
Known for brands including Peppa Pig and My Little Pony, Hasbro
also forecast its annual revenue to be down in the low-single
digit percentage range, while analysts expected a 2.5% increase
to $6 billion.
For the fourth quarter, the Monopoly board game maker posted
revenue of $1.68 billion, in line with analysts' estimates,
after it reported preliminary results late in January.
Shares of Hasbro fell 1.5% to $57.50 in premarket trading.
(Reporting by Deborah Sophia in Bengaluru; Editing by Arun
Koyyur)
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