(Reuters) – Hasbro Inc (HAS.O) missed analysts’ estimates for quarterly earnings and revenue on Monday, as production shutdowns due to the COVID-19 pandemic crimped the toymaker’s efforts to cash in on strong demand for its board games.
FILE PHOTO: A Monopoly board game by Hasbro Gaming is seen in this illustration photo August 13, 2017. REUTERS/Thomas White/Illustration
The company’s shares, which have lost over a quarter of their value this year, fell 9% 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 the United States, Ireland and India due to lockdowns stifled supply, with Hasbro blaming the shortages for a 30% fall in net revenue in the United Sates and Canada.
This was in contrast to rival Mattel Inc (MAT.O), which last week reported a 2% 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% drop in revenue.
Net revenue fell 12.6% to $860.3 million, missing analysts’ average estimate of $992.2 million, according to IBES data from Refinitiv.
Hasbro swung to a net attributable loss of $33.9 million in the three months ended June 28, 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 2 cents per share, falling well short of estimate of 23 cents.
Reporting by Uday Sampath in Bengaluru; Editing by Sriraj Kalluvila