Hasbro Hammered on COVID Damage

Store closures, product shortages and lower retail inventory hampered Hasbro (NASDAQ:HAS) in its fiscal second quarter, as the company dealt with the fallout of the global coronavirus pandemic.

Despite strong demand for toys in the quarter, Hasbro’s revenue fell 29% on a pro forma basis.

For the quarter ended June 28, Hasbro posted a net loss of $33.9 million, or 25 cents per share, compared with a profit of $13.4 million, or 11 cents per share, a year ago.

Excluding items, Hasbro earned but cents a share. Analysts expected Hasbro to earn 23 cents a share.

Revenue fell to $860.2 million, which was shy of the $922 million analysts expected.

Nearly 30% of its global toy and game revenue came from online sales.

The company’s gaming portfolio remained strong during the quarter, with revenue in the category rising 11%, fueled by sales of Jenga, Connect 4, Mouse Trap and Twister. However, disruption in Hasbro’s supply chain resulted in stock levels being low and limited its number of shipments during the quarter.

Hasbro said that shipments and sales improved as stores began to reopen late in the quarter. It said this trend continued into July.

Hasbro, which works with major studios, also took a hit from movie theaters being closed and a lack of new blockbuster features being released on the big screen. Industry watchers noted that the company has a strong entertainment lineup for 2021 with partnerships and for its own slate of films.

While live-action TV and film production has been hindered by the pandemic, animation production has continued for brands like Peppa Pig, PJ Masks and Hasbro’s upcoming “My Little Pony” feature film.

Sales of action figures across the toy industry have been sluggish because of the delay to the movie slate. Hasbro holds the master toy license for both Marvel and Star Wars. Still, Hasbro said that sales remained strong for its “Frozen 2” and “Star Wars” collections.

Shares of the company were down $3.19, or 4.1%, to $74.42, in Monday trading, on the weaker-than-expected results.