New York (CNN Business)Sales of Elsa and Anna dolls and Baby Yoda toys weren’t strong enough to save Hasbro this spring. The company reported a bigger-than-expected drop in revenue and adjusted earnings for the second quarter. Shares fell 8% on the news Monday.
Hasbro (HAS), which makes toys tied to popular Disney (DIS) franchises as well as Nerf, Monopoly and Peppa Pig, said that overall sales were down 29% in the quarter.
The company blamed the rash of temporary store closures in March and April and factory shutdowns across the globe due to Covid-19 for the weak results.
Hasbro said that Chinese factories, which make up about 55% of the company’s production, are now operating at normal levels and trying to catch up to meet demand for the holidays. Toy production at facilities in the United States, Ireland and India are ramping back up too.
Still, Hasbro has been hurt by the delayed releases of big Hollywood movies. The Disney-owned Marvel studio originally planned to release “Black Widow” this May. But that film has been delayed until November as a result of the coronavirus outbreak.
Hasbro said that revenue for toys tied to so-called partner brands plummeted 35% in the quarter.
The company is now a content producer as well, following the 2019 acquisition of the TV, animated studio and music company Entertainment One for $4 billion.
It’s been a rough year so far for Hasbro and its top rival Mattel. Shares of Hasbro are down more than 30% in 2020 while Mattel (MAT), the maker of Barbie, Hot Wheels and Fisher-Price toys, has fallen nearly 20%.
However, Mattel reported sales that topped forecasts last week. And both Mattel and Hasbro remain hopeful that demand will be strong for toys during the key holiday shopping season — and that manufacturers will be able to produce enough new products in time to hit the shelves this fall.
“We believe the outlook improves from here. Consumers – children, families, fans and audiences – are relying on Hasbro brands and stories to connect and entertain themselves throughout this period,” said Hasbro CEO Brian Goldner in a statement.
Goldner added that the full-year impact from coronavirus “remains unpredictable,” but “as stores reopen and we begin to return to production for entertainment, we expect the environment to improve in the third quarter and set us up to execute a good holiday season.”
Still, Hasbro and Mattel are facing tough pressure to keep prices down from giant retailers Amazon (AMZN), Walmart (WMT)and Target (TGT). These three companies each represent a growing percentage of Hasbro’s and Mattel’s overall sales — particularly after the 2017 bankruptcy of Toys R Us.
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