Rough quarter for toy maker Hasbro
NEW YORK – Toy maker Hasbro Inc. saw a surprise sales drop for the critical fourth quarter as it struggled with lagging sales of “Star Wars” toys and the woes of Toys R Us.
That comes after results last week from Mattel Inc., which posted an unexpected loss and disappointing sales for the quarter that includes the holiday season.
Hasbro’s results, announced Wednesday, underscore the challenges toy makers face. Parents are increasingly spending more of their money for toys online at sites such as Amazon, and kids are more interested in mobile devices than traditional toys.
The Pawtucket, Rhode Island-based company posted quarterly revenue of $1.6 billion, down from $1.63 billion and short of Wall Street forecasts for $1.73 billion.
Hasbro said higher sales of brands such as Beyblade, Marvel and Sesame Street were more than offset by a drop in Star Wars toy sales and to a lesser extent declines in Yo-Kai Watch and Disney “Frozen” products.
For the quarter, Hasbro reported a loss of $5.3 million, or 4 cents per share, compared to a profit of $192.7 million, or $1.52 per share, in the year-earlier period.
Adjusted to exclude pretax expenses and the impact of tax reform, earnings came to $2.30 per share, surpassing Wall Street expectations. The average estimate of seven analysts surveyed by Zacks Investment Research was for earnings of $1.82 per share.
That helped send Hasbro shares up nearly 9 percent to $102.22.
For the year, Hasbro earned $396.6 million, or $3.12 per share, on revenue of $5.21 billion. That marks the first time since 1993 that Hasbro’s annual sales surpassed Mattel’s, which were $4.88 billion in 2017.
Both Hasbro and Mattel have been affected by the bankruptcy last fall of Toys R Us. The chain announced plans to close 182 locations after struggling through the holiday season. It still sells about 20 percent of the toys bought in the U.S., according to Stephanie Wissink, an analyst at Jefferies LLC.