Hasbro Inc. reported solid sales in the third quarter as parents flocked to well-known brands like Monopoly and Magic: The Gathering to pass the time during lockdown.
- The largest U.S. toymaker’s revenue fell 4 per cent on a pro forma basis to $1.78 billion, beating analysts’ predictions of US$1.74 billion. Excluding Entertainment One, which Hasbro acquired earlier this year, revenue rose 13 per cent. Adjusted profit was US$1.88 a share, topping estimates of US$1.60, led by its games segment.
Key Insights
- Hasbro has benefited from a boost in toy buying throughout the pandemic, and reported a similarly strong third quarter as competitor Mattel Inc. Both companies have said parents are flocking to more familiar products, as the type of impulse buying that happens at retail shops has ebbed during the pandemic. Revenue for Hasbro’s so-called franchise brands rose 4 per cent.
- The Pawtucket, Rhode Island-based company has beenpartly hampered by a sales reduction in partner brands, or toys tied to movie franchises, where revenue fell 4 per cent. Hollywood studios have held back new releases due to theater closures and social-distancing rules.
- Hasbro said it has worked through issues with its supply chain. About half of its products come from China, where manufacturing returned to normal during the second quarter. Factories in Europe, the U.S. and India were operational during the third quarter, but still making up for earlier delays.
Market Reaction
- Hasbro shares were up 1.4 per cent to US$93.28 in premarket trading at 6:47 a.m. in New York. They are down 13 per cent this year, mostly because of weaker sales in the first half of the year.
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