Shares of Hasbro Inc. (HAS, Financial), a major manufacturer of toys and games, tumbled over 7% on the back of the company reporting second-quarter results that missed analyst expectations as the coronavirus pandemic resulted in temporary store closures and product shortages.
For the quarter ending June 30, the Pawtucket, Rhode Island-based company reported a net loss of $33.9 million, or 25 cents in loss per share. Adjusted net earnings of 2 cents per share underperformed the Refinitiv estimate of 23 cents, while revenue of $860.30 million missed the consensus estimate of $922 million.
Company reports strong demand in games, but coronavirus temporarily shuts down production
Hasbro Chairman and CEO Brian Goldner said in the earnings release that although it had a strong point of sale in its brands, global closures in the company’s supply chain, retailers and entertainment production resulted in a “challenging” revenue period.
Gaming revenue increased 11% on strong demand for games like Jenga, Connect 4, Battleship, Mousetrap and Twister. Point of sales increased 50% globally, reflecting double-digit growth in the U.S., U.K., France, Italy and Australia.
Despite strong demand, retail inventories declined as the company transitioned to e-commerce as the coronavirus outbreak temporarily closed stores, leading to lower revenues from brick-and-mortar shipments and live-action production in the company’s TV and Film space.
Shares tumble on revenue and earnings miss
Shares of Hasbro closed at $71.84, down 7.41% from the previous close of $77.59 on the company’s weaker-than-expected results.
GuruFocus ranks Hasbro’s profitability 8 out of 10: Operating margins are outperforming 76.10% of global competitors despite declining over 7% per year on average over the past five years. Additionally, returns on equity and returns on assets are outperforming 88% and 81% of global travel and leisure companies.
Gurus with large holdings in Hasbro include Jim Simons (Trades, Portfolio)’ Renaissance Technologies and Steven Cohen (Trades, Portfolio)’s Point72 Asset Management.
Disclosure: No positions.
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