PAWTUCKET, R.I. (WPRI) — Hasbro’s profit and sales slipped in the third quarter as families watched their spending on toys more closely with inflation cutting into budgets.
“The third quarter is our most difficult comparison and was further impacted by increasing price sensitivity for the average consumer,” said CEO Chris Cocks.
Revenue for the Pawtucket, Rhode Island, company fell to $1.68 billion, down 15% from last year’s third quarter, and Hasbro said the strong dollar knocked 3% off of quarterly revenue, or almost $54 million.
Hasbro Inc. earned $129.2 million, or 93 cents per share, in the quarter, down 49% from the same period last year. Stripping out one-time costs and amortization costs, earnings were $1.42 per share, which is well short of the $1.53 Wall Street had expected, according to a survey by Zacks Investment Research.
The toymaker was also hit by a 26% decline in revenue from film and TV when compared with last year at this time, which benefitted from the streaming release of the films “Come from Away” and “Finch.”
But families are pulling back on spending as prices rise for necessities like food and housing. The timing of the pullback coincides with the holiday season, which is a period that toy companies and other retailers rely on for a significant amount of sales. It remains to be seen if consumers will spend freely as that had been on gifts this year, or if they’ll be waiting for sales.
But there is growing evidence that Americans are cutting spending where they can as inflation takes a bite. The U.S. reported this month that retail sales were flat between August and September but because prices are rising, it means people are paying more for less. And small businesses are already preparing for what could be slimmer holiday sales this year.
Shares fell almost 2% Tuesday.