Toymaker Hasbro missed analysts' estimates for quarterly earnings and revenue on Monday, as production shutdowns due to the Covid-19 pandemic crimped efforts to cash in on strong demand for its board games.
The company’s shares, which have lost over a quarter of their value this year, fell 9 per cent in premarket trading.
Sales of Hasbro’s Scrabble, Jenga and Twister board games have surged in recent months, as stuck-at-home families looked for entertainment, as well as ways to keep kids engaged while home from school.
In the second quarter, factory closures in Ireland, the United States and India due to lockdowns stifled supply, with Hasbro blaming the shortages for a 30 per cent fall in net revenue in the United Sates and Canada.
This was in contrast to rival Mattel, which last week reported a 2 per cent rise in North American net sales on resurgent demand for its iconic Barbie dolls.
Hasbro said it expected production to catch up by the end of the third quarter, assuming there were no more shutdowns, and that it was still prepared for a strong holiday season.
The company also took a hit from a halt to television and movie production, with Entertainment One, the company behind Peppa Pig and PJ Masks that Hasbro bought last year for about $4 billion, seeing a 30 per cent drop in revenue.
Net revenue fell 12.6 per cent to $860.3 million, missing analysts’ average estimate of $992.2 million. Hasbro swung to a net attributable loss of $33.9 million in the three months to June 28th, from a profit of $13.4 million a year earlier, due to costs related to its purchase of Entertainment One.
Excluding items, the Hasbro earned two US cents per share, falling well short of estimate of 23 cents. – Reuters