Hasbro revenue beats as gaming boost offsets slowing demand for toys

By Deborah Mary Sophia

(Reuters) -Hasbro Inc topped Wall Street estimates for quarterly revenue on Thursday as players snapped up its “Magic: The Gathering” game sets, helping counter weak demand for its toys and action figures.

The company’s shares were up about 9% at $56.09.

An overall slowdown in demand for toys and retailers cutting back on orders to manage their inventories are set to temper the U.S. toy industry this year, with Hasbro (NASDAQ:) expecting the toys and games market to remain flat or decline this year.

However, Hasbro saw a 16% jump in revenue from its “Magic: The Gathering” tabletop and digital game, with fans piling on the February release of its “Phyrexia: All Will Be One” game set.

That helped the Monopoly board game maker offset a 23% slump in revenue at its consumer products segment, its largest business unit, stemming from weaker demand for NERF blasters, Play-Doh and Peppa Pig toys.

While Hasbro is still cautious about consumer spending, it is banking on a series of blockbuster movie releases, upcoming “Magic: The Gathering” launches, and expectations of a return to normal shipment levels to retailers to steer through 2023, outgoing CFO Deborah Thomas said.

The company reported first-quarter adjusted earnings in line with analysts’ estimates and maintained its annual sales and profit forecasts.

In contrast, rival Mattel Inc (NASDAQ:) on Wednesday posted a bigger-than-expected quarterly loss, pinched by retailers trimming orders for its Barbie and Hot Wheels toys.

“‘Magic: The Gathering’ is becoming a monster brand with a steady stream of new product releases that are fueling sales. Leaning into gaming in Q1 helped (Hasbro) offset some of the inventory struggles … on the toy side of the business,” James Zahn, editor-in-chief of trade magazine “The Toy Book”, said.

Hasbro’s net revenue fell 14% to $1.00 billion in the quarter, but beat analysts’ estimates of $878.4 million, according to Refinitiv IBES data.