19.6 C
New York
HomeEntrepreneursHasbro and Mattel stocks drop on poor holiday sales guidance

Hasbro and Mattel stocks drop on poor holiday sales guidance


Game maker Hasbro

Justin Sullivan | Getty Images

Shares of Hasbro and Mattel sank on Thursday, as both toymakers suggested sales will slow in the fourth quarter.

Hasbro’s stock dropped more than 10% on Thursday, and Mattel slid more than 7%.

The companies face challenges entering the critical fourth quarter, they said as they separately reported third-quarter earnings. Consumers are cutting back on spending while inflation pressures their budgets as the holiday season approaches. Toys and games, products both Hasbro and Mattel are known for, could be on the chopping block this season as consumers watch their spending.

Hasbro, which houses iconic brands like Play-Doh and Monopoly, cut its guidance for the full year. It projected a 13% to 15% revenue decline for a year, a worse decrease than its previous forecast of a 3% to 6% drop in revenue. A “softer toy outlook” drove the guidance, the company said in its earnings release Thursday.

“We have a cautious outlook on the holiday,” CEO Chris Cocks said during Hasbro’s earnings call Thursday. “We do not have a real solid view on where the market will go.”

Mattel’s implied fourth quarter guidance on toy sales offered Wednesday also spooked Wall Street, despite its strong third-quarter results.

The company’s third-quarter earnings beat “was largely offset by a weaker-than-expected implied guide” for the fourth quarter, which suggested lackluster performance for Mattel’s business outside of Barbie products, analysts at Citi Research said Thursday.

While Mattel beat Wall Street expectations on the top and bottom lines, Hasbro’s third-quarter report fell short of analyst estimates compiled by LSEG, formerly known as Refinitiv. The company’s adjusted earnings per share of $1.64 missed expectations of $1.70 a share, and revenue of $1.5 billion missed an estimate of $1.64 billion.

Hasbro’s revenue fell 10% for the quarter compared to the year-ago period, largely driven by decreases in its consumer and entertainment segments. Conversely, Mattel on Wednesday posted a revenue increase of 9%, largely driven by a boost in Barbie sales in conjunction with the blockbuster summer film.

Hasbro’s consumer segment sales, which includes popular toy brands like Nerf, My Little Pony and Transformers, fell 18%. The company said the decline was due to “exited licenses and softer category trends.”

Hasbro’s entertainment segment revenue also lagged. It fell a whopping 42% year over year, largely due to the writers’ and actors’ strikes, the company said. Hasbro said earlier this year that it will sell its film and TV business eOne, home of Peppa Pig, to Lionsgate for $500 million.



Source link

latest articles

explore more

LEAVE A REPLY

Please enter your comment!
Please enter your name here