Toymaker Hasbro's turnaround efforts buoy quarterly results, shares rise

[July 25, 2024]  (Reuters) -Hasbro posted a smaller-than-expected drop in second-quarter sales and beat profit expectations, helped by cost-control strategies and steady demand for digital gaming, sending shares of the toymaker up 10% before the bell. 

People walk past the Beyblade Burst Speedstorm, by Hasbro, Inc., on display in the FAO Schwarz toy store in Manhattan, New York City, U.S., November 24, 2021. REUTERS/Andrew Kelly/File Photo

The Nerf toy gun maker's turnaround strategy to limit expenses and maintain a tight inventory amid an industrywide slowdown in toy demand has helped its margins grow in the quarter to 21.3%, compared with a 15.6% decline a year earlier.

In August last year, the company hived off a chunk of its entertainment asset, eOne, to focus more on toy sales, licensed and digital games as well as international publishing deals.

The launch of "MAGIC'S Modern Horizons 3" gaming set during the quarter and strong digital gaming revenue from "Monopoly Go!", "Baldur's Gate 3" led to a 20% jump in revenue from the company's tabletop gaming unit.

This helped in a smaller drop in total quarterly revenue of 18% to $995.3 million, compared with a 22.02% fall estimated by analysts, according to LSEG data.

On an adjusted basis, Hasbro earned $1.22 per share in the second quarter, above estimates of 78 cents.

Barbie maker Mattel also topped Wall Street estimates for second-quarter profit, aided by a tight control on costs even as it posted a surprise drop in sales.

Hasbro now expects full-year revenue from its consumer products segment to be down 7% to 11%, compared with its February forecast of a 7% to 12% decline.

(Reporting by Savyata Mishra in Bengaluru; Editing by Shounak Dasgupta and Shinjini Ganguli)

[© 2024 Thomson Reuters. All rights reserved.]
This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.