The blistering success over the pandemic months of Hasbro and the spike in sales of games for families at home has meant that – along with a handful of other external factors – has meant that the cost of Hasbro products have gone up. That said, shares went up by 1% last Monday morning, a very positive sign.
The toymaker, like most U.S. manufacturers, has had to contend with rising resin, packaging and metal prices, as well as soaring transportation costs due to high demand and supply disruptions caused by the COVID-19 pandemic.
Rival Mattel Inc (MAT.O) last week had flagged expectations for a “significant impact” to margins from higher resin prices and ocean freight charges.
“Freight and input cost increases have become more pronounced over the past several months, and we have plans in place to help mitigate those costs, including price increases for the second half of the year,” Hasbro Chief Financial Officer Deborah Thomas said.
Demand for toys has remained robust more than one year into the pandemic, with the company reporting a 14% rise in first-quarter sales in its consumer products unit.
Excluding certain items, Hasbro earned $1 per share, above analysts’ average estimate of 65 cents, according to a Refinitiv IBES estimate.
A drop in advertising around films and TV shows due to the pandemic-forced production delays and theater closures also aided in the profit beat.
However, net revenue rose just 1% to $1.11 billion in the quarter, missing analysts’ estimates of $1.17 billion, as the delays and closures hurt the company’s entertainment production revenue.
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