Hasbro Inc. beat quarterly profit estimates on Tuesday, helped by a rebound in its TV and film production business that cushioned some of the impact from toy shipment delays due to global supply chain bottlenecks.
The toymaker’s shares rose 5 percent in early trading, despite the company’s warning that its sales could take a hit during the crucial holiday shopping season.
Productions such as “My Little Pony” for Netflix and the musical “Come From Away” for Apple TV+ from Hasbro’s entertainment business boosted the unit’s third-quarter revenue by 76 percent from a year ago, when filming was largely shutdown by the pandemic.
That helped offset some of the $100-million hit in delayed toy orders Hasbro had to endure in the quarter as factory shutdowns, a lack of container ships, and long port delays pinched supply chains across the world.
The maker of “Transformers” toys said the majority of those orders had been delivered in recent weeks, as the company is expanding its shipping capacity and using more air freight.
Hasbro said it expects 2021 revenue to rise between 13 percent and 16 percent, but warned supply issues could impact its ability to achieve the high-end of its forecast.
Still, Chief Financial Officer Deborah Thomas was confident that the company’s investments to get around supply bottlenecks would be enough to ensure there would not be a dearth of Nerf blasters or My Little Pony toys under Christmas trees come December
“We’ve got everything in place and there will be Hasbro toys and games on the shelves this holiday season,” Thomas said on an analyst call.
Hasbro said quarterly adjusted net earnings rose 5 percent to $271.2 million, or $1.96 per share, beating analysts’ estimates of $1.69 per share, but warned that higher freight costs would pressure margins in the fourth quarter.
By Uday Sampath Kumar