(Reuters) – Hasbro Inc missed quarterly profit estimates on Tuesday as higher prices for the company’s toys and games put further strain on spending from inflation-weary customers.
Companies across the consumer industry have been forced to raise prices to protect their profit margins and revenue as they face higher transportation and commodity costs.
While toys have typically held up better than other discretionary categories during economic downturns, Hasbro cut its annual sales forecast earlier this month, warning that demand was starting to slip ahead of the holiday season due to stubbornly high inflation.
“As expected, the third quarter is our most difficult comparison and was further impacted by increasing price sensitivity for the average consumer,” Hasbro Chief Executive Officer Chris Cocks said.
The Monopoly game maker has also been grappling with the impact of a strengthening U.S. dollar, which negatively impacted the company’s third-quarter revenue by $53.7 million, or 3%.
Hasbro said it expects its fiscal 2022 sales to be flat to down slightly in constant currency, maintaining its updated outlook from earlier this month.
Net revenue fell 15% to $1.68 billion in the third quarter ended Sept. 25, in line with analysts’ estimates, according to Refinitiv IBES.
Hasbro’s consumer products business – its largest and home to toys such as Nerf blasters and My Little Pony figures – posted a 10% fall in revenue.
The Transformers toys maker reported a 28% fall in adjusted net earnings to $196.2 million, or $1.42 per share, while analysts had expected the company to earn $1.52 per share.
(Reporting by Granth Vanaik in Bengaluru; Editing by Shinjini Ganguli)
