Hasbro has maintained its annual sales and profit forecasts in light of the latest results.
Hasbro reported net revenue of $1b in the first quarter, down -14% from a year earlier. However, this figure was ahead of analysts’ estimates of $878.4m.
US toy companies have been experiencing a short-term slowdown in demand, with retailers cutting back orders to tighten their inventories after a soft festive season. These trading conditions impacted demand for Hasbro’s leading toy ranges in the first quarter, resulting in a 23% drop in revenue at its consumer products segment, the company’s largest business unit.
However, Hasbro saw strong fan engagement in its Wizards of the Coast and Digital Gaming segment, with revenue from its Magic: The Gathering tabletop and digital game increasing by 16%, while demand for its Dungeons & Dragons role-playing game was also healthy.
Chris Cocks, Hasbro chief executive officer, commented: “First quarter results came in ahead of our expectations and position Hasbro to meet our full-year financial targets. Wizards of the Coast and Digital Gaming delivered strong fan engagement. Segment revenues increased +12%, including a +16% revenue increase in Magic: The Gathering, behind the successful release of Phyrexia: All Will Be One. Dungeons and Dragons: Honor Among Thieves delivered strong critical and audience reviews pointing to a promising long life, including home entertainment and streaming, while also introducing our newest franchise brand to tens of millions of new fans around the world and positioning Dungeons & Dragons for robust full-year growth.”
Referring to the company’s ongoing Blueprint 2.0 strategy, Chris said: “We’ve made significant progress in implementing the strategy, including heightening our focus on high-growth, high-profit categories; improving our cost structure; and adding talented executives to our leadership team. The sale process for the eOne TV and film assets is ongoing and we expect to provide an update during the second quarter. The global Hasbro team continues to execute our strategy to unlock the value of our rich IP library across our growth priorities including in gaming, direct-to-consumer and licensing.”
Outgoing chief financial officer Deborah Thomas added: “The year has started on plan as we reduce retail inventory levels and remain positioned to drive continued margin expansion. As we work through our inventory, we continue to invest in our growth priorities, reduce costs and return cash to shareholders. The first quarter is the smallest quarter of the year, and there is a lot of the year ahead of us. The team is advancing our cost savings and taking strategic steps to drive long-term shareholder value. With my upcoming retirement and transition, I believe Hasbro is well positioned with an experienced leadership team and a strong strategic and financial plan for the future.”
