Hasbro loss narrows as coronavirus snarls supply chain
Toy manufacturer lost $33.9M in second quarter
Hasbro Inc. lost $33.9 million during the three months through June as temporary store closures and product shortages due to COVID-19 hampered the company's ability to meet strong consumer demand.
The Pawtucket, Rhode Island-based toy manufacturer earned an adjusted $2.7 million, or 2 cents per share, excluding costs related to its Entertainment One transaction, but that was shy of the 23 cents that Wall Street analysts surveyed by Refintiiv were expecting. Revenue fell 29 percent from a year ago to $860.3 million, missing the $992.2 million that was anticipated.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| HAS | HASBRO INC. | 61.91 | +0.06 | +0.10% |
“The second quarter was much as we expected: strong point of sale for Hasbro brands countered by a very challenging revenue period due to global closures in our supply chain, across retailers as well as in entertainment production,” Hasbro CEO Brian Goldner said in a statement. “We believe the outlook improves from here.”
Hasbro's gaming revenue was a bright spot, climbing 11 percent from a year ago as point-of-sale rose 50 percent. Jenga, Connect Four, Battleship, Mouse Trap and Twister saw the biggest revenue increases, but supply-chain constraints held back performance. Frozen 2, Star Wars, Play-Doh and Nerf also performed well.
Magic: The Gathering revenue declined, as expected, amid tough comparisons from a year ago due to a major release in the second quarter of 2019.
Hasbro's China production, which accounts for 55 percent of manufacturing, has been operating at full capacity since early in the second quarter while factories in the U.S., Ireland and India were shuttered from mid-March to mid-May. The company expects missed production at those factories to be made up by the end of the third quarter.
The company ended the second quarter with $1 billion cash and has another $1.5 billion available through a revolving credit facility.
Looking ahead, Hasbro expects to spend $450 million to $550 million on content production in 2020 after spending $220.4 million in the first half of the year.
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Hasbro shares were down 27 percent year-to-date through Friday, lagging the S&P 500's 0.47 percent decline.