Published by Global Banking and Finance Review
Posted on February 20, 2025
By Anuja Bharat Mistry
(Reuters) -Hasbro laid out a $1 billion cost-savings plan on Thursday as the U.S. toymaker navigates subdued demand for its products, sending its shares up about 11% despite a lackluster annual revenue forecast.
In its new strategic plan, the Nerf gun and Play-Doh maker will also target an average of mid-single digit revenue growth and 50-100 basis points of annual operating profit margin improvement through 2027.
"Hasbro's new 'Playing to Win' strategy takes a page from Lego's playbook, aiming for growth through franchises, tapping into the 'kidult' market, and expanding its appeal to girls and emerging markets," said Zak Stambor, an analyst with eMarketer.
Rival Mattel earlier this month forecast annual profit above estimates and warned of price hikes following the tariffs.
Annual forecast includes the impact of U.S. tariffs on imports from China and potential levies on Mexico and Canada announced as of February 1, Hasbro said, but does not reflect any later actions.
"We are on a path to move from 50% of our U.S. toy and game volume originating from China to under 40% over the next two years," CFO Gina Goetter said on an earnings call.
President Donald Trump's tariffs and threats of more import levies have reignited inflationary concerns, casting a shadow over a recovery in discretionary spending by middle-to-lower income households still facing high costs of living.
Unlike in the first Trump administration, toys are not expected to be excluded from the latest tariffs.
Meanwhile, Walmart on Thursday forecast fiscal 2026 sales below estimates, signaling the world's largest retailer expects inflation-weary consumers to pull back after several quarters of solid growth.
Hasbro predicted total annual revenue to be up slightly compared with analysts' estimates for a 4% rise, as per data compiled by LSEG.
Revenue in its biggest segment, consumer products, dipped 1% during the holiday quarter, compared with the 10% decline in the third quarter.
Total revenue of $1.10 billion for the three months ended December 29 beat analysts' estimates of $1.03 billion. Adjusted profit of 46 cents per share also topped estimates of 34 cents.
The company expects adjusted operating margin of 21% to 22% for 2025, compared with the 20.3% logged last year.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Sriraj Kalluvila)
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