Hasbro warns of weak holiday quarter results, cuts jobs
Game maker Hasbro
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Hasbro said on Thursday it would cut about 1,000 jobs and warned of weak holiday quarter results.
Shares in the toy maker fell more than 6% in extended trading.
“Despite strong growth from Wizards of the Coast and Digital Gaming, Hasbro Pulse and our licensed business, our consumer goods business performed poorly in the fourth quarter amid a challenging holiday consumer environment,” said Hasbro CEO Chris Cox.
The layoff of about 15% of employees worldwide is due to the company aiming to save between $250 million and $300 million a year by the end of 2025.
Hasbro said it expects fourth-quarter revenue, including the holiday season, to reach $1.68 billion, down 17% from a year earlier. Hasbro is estimated to reach $1.92 billion for the quarter, according to Refinitiv data.
The company forecasts full-year revenue to reach $5.86 billion, down 9% from 2021.
“While all of 2022, and especially the fourth quarter, has been a tough time for Hasbro, we are confident in our Blueprint 2.0 strategy, unveiled in October, which includes a focus on fewer bigger brands, games, digital, and our fast growing directly to the consumer and licensing business,” Cox said.
The company has struggled with earnings in recent quarters as it struggles with tough comparisons to pandemic-driven toy sales, inflation weighing on consumer wallets and high inventory levels.
Wizards of the Coast, which includes Dungeons and Dragons, Magic: The Gathering and digital games, will remain a bright spot, according to the toy maker. The company expects fourth-quarter revenue for the division to be $339 million, up 22% year-over-year, to reach $1.33 billion in full-year revenue, up 3% from 2021.
The division has recently come under fire from fans after Hasbro attempted to rewrite a two-decade-old open play license for Dungeons and Dragons to boost revenue. Earlier this month, the Rhode Island toy maker delayed updating its licensing terms to address growing concerns from the D&D community, which largely viewed the proposed changes as excessive and unfair to third-party content creators.
Hasbro said it still intends to create a new open gaming license, or OGL, but it will not include a royalty structure or grant itself access to intellectual property created by third-party content creators.
The company is due to report fourth quarter earnings on February 16.