Hasbro’s Missed Earnings Could Lead To A Tough 2023.

There was a surprise miss in Hasbro's revenue and earnings expectations in the holiday quarter, and the company warned of a challenging consumer discretionary environment in 2023.

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There were $1.31 adjusted earnings per share for Hasbro (ticker: HAS) in the final three months of the year while revenue dropped 17% to $1.68 billion, according to the company.

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A FactSet survey of analysts suggested that analysts were expecting earnings of $1.33 per share on sales of $1.72 billion, according to a survey of estimates conducted by FactSet.

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Hasbro's 2022 revenue fell 9% to $5.86 billion, missing estimates of $5.9 billion, despite a record year for Marvel products and Star Wars products.

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As part of its outlook for profit in 2023, the company sees a range of $4.45 and $4.55 a share, which is below the consensus estimate of $4.88 a share. It is expected that the company's revenue will decline by a low-single-digit percentage this year.

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“Despite facing a challenging consumer discretionary environment, as well as approximately $300 million in revenue headwinds as a result of exited licenses, brands, and markets as well as foreign exchange, we are capitalizing on an exciting entertainment slate, including Dungeons & Dragons: Honor Among Thieves in March, exciting new product launches, and exciting new entertainment initiatives,” said CEO Chris Cocks.

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Based on Wednesday's closing price, the stock has declined 4.3% since the start of the year. There was a 3.2% increase in the stock on Thursday. Stocks fell 8% after the company forewarned investors at the end of January with preliminary numbers.

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In a statement alongside the preliminary results on Jan. 26, Cocks said Hasbro's licensing and consumer products business underperformed during the fourth quarter due to a "challenging holiday consumer environment."

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Additionally, the company announced in January that it would be cutting 15% of its global workforce by the end of the year.

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As consumers retreated from more expensive toys during the holiday season due to tougher economic conditions, Hasbro's rival Mattel MAT +1.15% (MAT) missed earnings expectations last week. Doll sales, in particular, fell sharply. In the session following its fourth-quarter earnings, Mattel shares fell close to 11%, but remain 4.5% higher in 2023.

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