Hasbro Misses Profit Estimates, Warns of $100 Million Russia Hit

By Reuters
April 20, 2022 Updated: April 20, 2022

Toymaker Hasbro Inc. on Tuesday missed Wall Street estimates for quarterly profit and warned of a potential revenue hit of about $100 million this year due to Russia’s invasion of Ukraine.

Hasbro’s shares fell 2 percent to $81.80 in low-volume premarket trading as a jump in freight and raw material costs bit into the company’s earnings.

While demand for toys has surged since the start of the pandemic as children spent more time at home, factory shutdowns, a lack of container ships and long port delays have caused costs to surge and squeezed profit margins at Hasbro.

The company’s first-quarter adjusted operating margin fell to 12.2 percent from 15.6 percent.

Hasbro reported adjusted net earnings 57 cents per share in the quarter ended March 27, missing estimates of 61 cents per share, according to Refinitiv IBES data.

However, the Monopoly maker’s net revenue rose 4 percent to $1.16 billion, beating estimates of $1.15 billion, boosted by demand for role-playing games “Magic: The Gathering” and “Dungeons & Dragons.”

The success of the unit that houses those games has drawn the attention of activist investor Alta Fox Capital Management LLC., which is pushing Hasbro to spin-off the business.

Hasbro said it expects fiscal 2022 operating profit to rise in the mid-single digits, compared with its previous forecast of a low-single-digit increase.

By Uday Sampath