Hasbro Inc (NASDAQ:HAS) missed quarterly profit estimates on Tuesday as the company's move to raise prices to offset higher commodity costs led customers to buy fewer toys and games.
Hasbro saw its net revenue fall by 15% to $1.68 billion in the third quarter to September 25, 2022, partly dented by a stronger dollar. 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.
The company said it expects its fourth-quarter revenue growth to be flat on a constant currency basis, driven by key brands such as Peppa Pig, My Little Pony and Marvel's Black Panther. Analysts were expecting a near 2% decline.
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"Promotions and entertainment field demand have become increasingly important and will be key in the quarters ahead," Hasbro chief executive officer Christian Cocks said on a post-earnings call, reported by Reuters, adding that Amazon (NASDAQ:AMZN)'s recent Prime Day saw Hasbro's sales volume rise in mid-double digits from a year earlier.
While toys have typically held up better than other discretionary categories during economic downturns, Hasbro warned earlier this month that demand was starting to slip ahead of the holiday season due to stubbornly high inflation and cut its annual sales forecast then.
Hasbro said on Tuesday it expects to see more promotional activity heading into the gifting season as consumers get more conscious about spending their holiday budgets wisely at a time of decades-high inflation.