Despite higher prices, people continued to invest in Nerf Blaster, Power Rangers action figures, and Magic The Gathering Cards to help Hasbro overcome rising material and freight costs. The company said on Tuesday..
According to Hasbro, revenues in the second quarter increased 1% year-on-year, but profits increased 10%, higher than analysts expected, as higher prices and demand overcame increased costs and foreign exchange losses. rice field.
Hasbro’s revenue report is a promising sign for other companies that also sell discretionary products as consumers are squeezed by rising inflation and rising costs are eating up their profit margins. Many of these companies will report quarterly results in the coming weeks.
US consumer prices rose 9.1% in June, the fastest pace in 40 years. However, some shoppers still did not stop opening their wallets, and retail sales in June increased more than expected.
Hasbro’s chief financial officer, Deborah Thomas, said in a call with analysts that Hasbro raised prices in the second quarter, helping to offset rising costs for materials such as paper and plastic. She said the move could further increase profit margins in the third and fourth quarters.
Hasbro toys and games “tend to be small luxury items that consumers value very much,” said Chris Cocks, CEO of the company, over the phone. During the downturn, fans of games like Magic The Gathering and Dungeons & Dragons are “very resilient,” he said.
Sales of the company’s business units, including Magic The Gathering and Dungeons & Dragons, increased 3% from the second quarter of last year to a record $ 420 million.
Hasbro recently partnered with The New York Times to develop a Wordle-based board game.
Hasbro’s earnings, which are likely to be the theme of other multinationals, were curbed by the strong dollar, the company said. Especially in sales in Europe, the euro has fallen to the same level as the US dollar for the first time in 20 years. Year. Converting sales from other currencies to dollars, Hasbro said, would reduce second-quarter sales by about $ 33 million.
Toy makers also said Russia’s invasion of Ukraine will affect the outcome of the year. Last year, the company’s revenue of $ 115 million came from Russia. “There will be no operating profit associated with this revenue in 2022,” Cocks said.
Hasbro’s stock soared nearly three in early trading before it settled at a rise of about 1%. Rival toy maker Mattel will report its latest quarterly financial results on Thursday.
