Toy maker Hasbro reported third-quarter earnings Tuesday that fell short of analysts’ expectations, as consumers are still cautious on spending amid high inflation and the company faces high levels of inventory.
“As expected, the third quarter is our most difficult comparison and was further impacted by increasing price sensitivity for the average consumer,” CEO Chris Cocks said in an earnings release. “To achieve our full-year outlook, we are projecting Hasbro’s fourth quarter revenue to be approximately flat versus last year on a constant currency basis with particular strength from our Wizards and Digital Gaming segment.”
Revenues of $1.68 billion were down 15% year-over-year, a decline of 12% on a constant currency basis. Operating profit of $194.3 million declined 47%, or 31% on an adjusted basis.
The Rhode Island based company also faced tough comparisons from a year ago when it benefitted from multiple film releases.
Revenue for the period fell 15% compared to last year, dragged down also by a 35% decrease in entertainment revenue.
Shares were down more than 2% Tuesday morning after the results were announced, hitting a new 52-week low.
During a conference call Tuesday morning, Cocks noted that promotions have become increasingly important in driving product sales.
Upcoming releases like “Black Panther: Wakanda Forever” and the company’s own “Transformers: EarthSpark,” are expected to drive Hasbro’s sales in the fourth quarter.
As prices for goods and supplies surge, the toy giant has increased prices for top sellers like Nerf Blasters and My Little Pony.