Hasbro Extends Recession, Delivers Soft Q4 Results With Expected 2023 Forecast

Hasbro extended its streak of Wall Street disappointments, issuing a weaker-than-expected forecast for 2023 and fourth-quarter financials reflecting a host of holiday-season challenges.

Revenue fell 17% to nearly $1.7 billion in the quarter, while earnings per share came in at $1.31. Hasbro is projecting 2023 adjusted earnings of $4.45 to $4.55 per share, down from analysts’ consensus of $4.88, according to Refinitiv.

This morning’s quarterly earnings report provided an early glimpse into the financials several weeks ago, with news that the Rhode Island-based toymaker will lay off 15% of its workforce. Also hanging in the balance is eOne, the film and TV studio known for characters like Peppa Pig. Hasbro announced last fall that it was shopping eOne, which it acquired in 2019 for $4 billion. Along with myriad economic challenges like Covid and inflation, foreign exchange fluctuations and supply-chain snags, Hasbro is navigating a leadership transition. Longtime CEO Brian Goldner, who led Hollywood’s breakthrough with features like Transformers and GI Joe, died in October 2021 at age 58 after a battle with prostate cancer.

According to Refinitive Data, Hasbro said it expects 2023 adjusted earnings in the range of $4.45 to $4.55 per share, below analysts’ average estimate of $4.88 per share.

“For 2023, we have a focused plan to grow share in our core segments and further improve our margins,” CEO Chris Cox said in the earnings release. He pointed to entertainment releases based on the company’s properties, including Dungeons and Dragons: Honor Among Thieves, which comes out in March. He said the company continues to face “a challenging consumer discretionary environment” and will take a $300 million hit to revenue from the loss of licensing deals like a recent one with Disney’s princesses. “Our strategy is centered on what makes our brands great – play, supported by compelling storytelling and disciplined brand management.”