Hasbro swings to £56.05 million net loss in Q1 due to Coronavirus restrictions

Hasbro Inc. (NASDAQ: HAS) released its quarterly financial results on Wednesday that missed analysts’ estimates for earnings and revenue. The company, however, expressed confidence in its firm financial position and highlighted that it plans on slashing costs to cope up with the seasonal demand that is commonly attributed to the 2^nd half of the year.

The American multinational conglomerate also warned of a pronounced hit to its financial performance in the second quarter due to the ongoing Coronavirus pandemic. Hasbro’s nationwide stores were pushed into closure as the government imposed strict social distancing measures in the U.S. Citing COVID-19 uncertainty, the company also suspended its financial guidance for 2020.

In the first quarter, Hasbro said that demand for its family games was higher as people remained restricted to their homes.

Hasbro’s Q1 financial results versus analysts’ estimates

The toy company swung to £56.06 million net loss in Q1 as compared to £21.51 million net income in the same quarter last year. Excluding one-time items, Hasbro made 46 pence of earnings per share in the recent quarter. As per Refinitiv, analysts had forecast a marginally higher 47 pence of earnings per share for Hasbro in the first quarter.

On the revenue front, the company recorded £890 million in Q1 that fell short of the experts’ forecast of £920 million. In the comparable quarter last year, Hasbro printed £590 million in revenue.

According to the U.S toy company, all of its segments including family games, adults, kids, and preschool noted growth in sales in the recent quarter. Its gaming category that includes Monopoly, Magic: The Gathering, and Hasbro gaming, registered 40% higher sales in Q1.

Hasbro’s e-commerce sales climb significantly in Q1

In its report on Wednesday, Hasbro also highlighted Amazon, Walmart, and Target as its largest customers in the first quarter pushing its e-commerce sales up by double digits. Demand for the company’s animated content was also reported upbeat in Q1 including its Peppa Pig brand that it acquired recently.

On March 29^th, the company added, it ended the quarter with £970 million in cash. Hasbro also has a £1.21 billion revolving credit facility.

At £64 per share, Hasbro is currently around 25% down year to date in the stock market. In comparison, the company had recorded an annual gain of around 30% last year.

At the time of writing, Hasbro is valued at £8.59 billion and has a price to earnings ratio of 19.22.