Hasbro falls short of earnings expectations after revenue slide

Shares in toy giant Hasbro were sliding in premarket trading on Tuesday, after it reported a significant decline in revenue and a mixed performance across its business segments.

Despite growth in certain areas, overall revenue dropped 23% in the fourth quarter, driven primarily by decreases in the consumer products and entertainment segments.

The company's revenue for the fourth quarter totalled $1.29bn, marking a 23% decline year-on-year.

Its Wizards of the Coast and digital gaming segment experienced 7% growth, partly offsetting declines of 25% in consumer products and 49% in entertainment.

Hasbro reported a net loss of $1.06bn, or $7.64 per share, widening from $128.9m, or 93 cents per share, in the fourth quarter of 2022.

Adjusted earnings per share stood at 38 cents, falling short of the FactSet consensus of 65 cents per share.

The company attributed the fall to nonrecurring items, including impairment charges, which affected profitability.

Looking ahead, Hasbro said it anticipated further declines in revenue in 2024 for both the consumer products and Wizards of the Coast segments.

The company said it expected consumer products revenue to decrease by between 7% and 12%, and Wizards of the Coast revenue to decline by 3% to 5%.

Additionally, Hasbro projected total adjusted EBITDA of $925m to $1bn for the full year.

“2023 was a productive year for Hasbro, although not without some challenges,” said chief financial officer Gina Goetter.

“As we navigated the current environment, we took aggressive steps to optimise our inventory, reset the cost structure, and sharpen our portfolio focus on play with the eOne film and TV divestiture.”

Goetter said taken together, the actions throughout the full year had positioned the company for improved financial performance in 2024 and beyond.

“We are encouraged by our recent progress and remain laser focused on execution to deliver on our transformation objectives.”

At 0907 EST (1407 GMT), shares in Hasbro were down -5.44% in premarket trading on the Nasdaq, at $48.50.

Reporting by Josh White for Sharecast.com.