Toymaker Hasbro reported a smaller-than-anticipated decline in first-quarter sales on Wednesday, along with handily beating profit estimates, as leaner inventories and steady digital gaming revenue cushioned the impact of softer demand for physical toys. Hasbro, known for its Play-Doh and Nerf brands, has been grappling with weakened demand over the past year amid a pullback in discretionary spending and tight inventory planning by mass retailers like Walmart and Target. However, efforts to clean up its inventory throughout 2023, coupled with cost efficiencies, helped its operating margin expand significantly to 15.3%, compared to a meager 1.8% in the same period last year. Revenue for Hasbro’s Wizards of the Coast and Digital Gaming segment experienced a 7% growth in the quarter, primarily driven by the popularity of titles like “Baldur’s Gate III” and “Monopoly Go!”. While Nerf toy gun sales faced a 24.3% decline to $757.3 million, it was less severe than the 26.2% drop to $738.6 million estimated by analysts on average, according to LSEG data. On an adjusted basis, Hasbro reported earnings per share of 61 cents in the quarter ended March 31, a significant improvement compared to 1 cent reported in the same period last year. Analysts had forecasted an average of 27 cents per share. The toymaker expressed confidence in achieving the fiscal 2024 targets set in February. This news follows the announcement by Hasbro’s rival, Barbie maker Mattel, which also posted a smaller-than-expected loss for the first quarter, aided by cost-saving measures.
Hasbro Tops Profit Estimates, Cushions Soft Toy Sales with Lean Inventory and Digital Gaming
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