Hasbro Isn’t Child’s Play After All

Hasbro Isn’t Child’s Play After All

about 1 year ago2 mins

Mentioned in story

Toymaker Hasbro gave a disappointing outlook on Thursday, and investors decided the firm’s a problem child.

What does this mean?

Hasbro’s preliminary results update last month showed that demand for its toys dropped off a cliff last quarter – so the firm decided to run a tighter ship and lay off 15% of its workforce. But if anyone was actually reassured by that move, this week’s outlook set them straight: the owner of My Little Pony and Monopoly released an annual forecast that was way below analysts’ expectations. And it’s not hard to see why: after all, retailers will probably continue to play it safe with orders after overstocking last year. And lately Hasbro's lost some important licenses – like the Disney Princess range poached by rival Mattel – which could dent profit big-time. Obviously that wasn’t the bedtime story investors wanted, and they sent Hasbro's shares tumbling.

Hasbro stock
Source: Google Finance

Why chould I care?

Zooming in: Life in plastic.

Kids are really annoying when they cry, which means that demand for toys typically withstands the most Herculean economic hardships. But not this earnings season. Mattel gave a weak outlook of its own earlier this month, and now it’s ransacking its iconic back catalog to try and woo consumers with old favorites. The firm announced earlier this week that Barney – the famous TV dinosaur – will be back on the airwaves and store shelves before long. And that's not to mention this year's hotly anticipated Barbie movie.

The bigger picture: Workers beware.

Another day, another layoff announcement – and Hasbro's bout of job-slashing shows that's not just confined to tech. In fact, S&P 500 companies' profits fell for the first time since 2020 this earnings season, a sign there could be more cuts to come. That's the way the wind seems to be blowing anyway: a recent business survey showed that more respondents expect payrolls to fall than rise over the coming months – the first time that's been the case for two years.

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