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 per cent before the bell.
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 per cent, compared with a 15.6 per cent 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, licenced 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 per cent jump in revenue from the company’s tabletop gaming unit.
This helped in a smaller drop in total quarterly revenue of 18 per cent to US$995.3 million, compared with a 22.02 per cent fall estimated by analysts, according to LSEG data.
On an adjusted basis, Hasbro earned US$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 per cent, compared with its February forecast of a 7 to 12 per cent decline. REUTERS
