Hasbro has today posted a steeper than expected drop in Christmas-quarter sales and profit as a persistent demand weakness in the toy industry weighed on revenues of its digital and board games, sending its shares down 13% in premarket trading.
Sluggish demand from a pullback in leisure spending and cautious inventory planning by retailers like Walmart and Target hurt the company's sales in the past year.
Last week, Barbie maker Mattel reported a softer holiday quarter and forecast tepid sales in 2024.
For fiscal year 2024, Hasbro's consumer products segment, which made up more than half of its fiscal 2023 sales, is expected to decline by 7% to 12%.
Revenue in its core Wizards of the Coast segment, which includes games such as "Baldur's Gate III" and "Monopoly Go!", is forecast to decrease 3% to 5%, owing to weakness in digital gaming.
The Monopoly maker's net revenue fell about 23%, to $1.29 billion, in the fourth quarter ended December 31. Analysts on average expected a 19.3% drop, to $1.36 billion, according to LSEG data.
Excluding items, Hasbro's profit per share was 38 cents, compared to the estimate of 66 cents.
Benefiting from cost-saving efforts like job cuts, the firm expects annual adjusted EBITDA, or earnings before interest, taxes, depreciation, and amortisation, to be between $925m and $1 billion - better than the $709.4m it reported in 2023.
"As we navigated the current environment, we took aggressive steps to optimise our inventory, reset the cost structure and sharpen our portfolio focus on play," CFO Gina Goetter said.
