Hasbro records a net loss of £26.36 million in the second quarter

Hasbro (NASDAQ: HAS) published its quarterly financial results on Monday that highlighted a 29% decline in its revenue in the second quarter on a pro forma basis. The company attributed the slump to the Coronavirus pandemic that pushed its stores into temporarily shutting down in recent months. COVID-19 also resulted in lower retail inventory and product shortages. Hasbro revealed Deadpool 2 action figures last week.

Shares of the company were reported about 11% down in premarket trading on Monday. At £60.53 per share, Hasbro is currently more than 25% down year to date in the stock market after recovering from an even lower £34.78 per share in March. Learn more about how to choose winning stocks.

Hasbro reports weaker than expected earnings and revenue

Demand for toys, as per Hasbro was strong in the quarter that ended on 28^th June. Nonetheless, the company posted £26.36 million of net loss that translates to 19.44 pence per share. In the same quarter last year, Hasbro had recorded £10.42 million of profit or 8.55 pence a share. Its net loss in Q1, however, was much broader than Q2.

Excluding items, the American multinational conglomerate registered 1.56 pence of earnings per share in Q2. According to Refinitiv, experts had forecast the company to see 17.88 pence of earnings per share in the recent quarter.

At £668.86 million, its revenue also came in sharply lower than the analysts’ expectations of £716.91 million in the second quarter. Hasbro said on Monday that digital sales made up roughly 30% of its revenue generated from global sales of toys and games.  

According to the Pawtucket-based company, higher demand for Connect 4, Twister, Jenga, and Mouse Trap resulted in an 11% year over year increase in its revenue from the gaming portfolio. In the final few weeks of the second quarter, Hasbro commented, sales recovered quickly as several states in the U.S. started easing COVID-19 restrictions.

CEO Brian Goldner expects an improvement in Q3

CEO Brian Goldner refrained from giving guidance for the fiscal third quarter. But he expressed confidence that the company’s performance will be stronger in Q3. In the Q2, as per Goldner, Hasbro also took a hit due to COVID-19 driven closures of movie theatres.

With no new blockbuster releases in Q2, action figures sales were reported under pressure in recent months except for the sales of Star Wars and Frozen 2 collection.

At the time of writing, Hasbro is valued at £8.27 billion and has a price to earnings ratio of 23.65.