Hasbro Misses Wall Street Expectation as Toy Demand Slumps — Retail Bum

Toy maker Hasbro missed analysts’ estimates due to a slump in demand for toys and games as consumers continue to deal with an increased cost of living.

The toy maker’s decision to raise the cost of its products to offset the increase in manufacturing costs also likely hurt its sales, especially as retailers cut back on their orders to maintain tight inventory levels.

Hasbro CEO Chris Cocks noted that the slump in demand, which began at the start of the holiday season, will likely extend into the third quarter.

The company is anticipating a $300 million hit to its revenue resulting from a strong dollar and its decision to exit some of the brands and licensing deals, according to Reuters.

Last year, the company reportedly lost a profitable deal to make Disney Princess toys, and this year the company decided to end its Sesame Street and Trolls licenses.

Despite the challenges, some analysts remain optimistic as the company’s forecast is better than anticipated.

“Uncertainty has been cleared up (at Hasbro)…real detailed plans seem to be in place to start righting the ship,” said D.A. Davidson analyst Linda Bolton Weiser.

The company’s shares declined by more than 8% after it issued the warning but bounced back 3% in early trading.

Originally published at https://retailbum.com on February 16, 2023.