Hasbro Inc. late Thursday said it plans to lay off about 15% of its workforce and warned Wall Street to brace for a quarterly loss and a drop in revenue after a disappointing holiday season.
reported preliminary losses between $1 a share and 93 cents a share for its fourth quarter, and an adjusted loss of between $1.29 a share and $1.31 a share in the period.
That runs counter to FactSet consensus of an adjusted profit of $1.52 a share for the quarter.
The maker of My Little Pony, Baby Alive and other toy brands also reported preliminary fourth-quarter revenue of about $1.68 billion, down 17% year-over-year. That compares with FactSet consensus for revenue of $1.92 billion for the quarter.
Hasbro stock fell more than 8% in the extended session after ending the regular trading day down 0.5%.
Hasbro’s “consumer-products business underperformed in the fourth quarter against the backdrop of a challenging holiday consumer environment,” despite “strong growth” for digital gaming and other areas of the company, Chief Executive Chris Cocks said in a statement.
Several retailers have posted lower-than-expected fourth-quarter sales as concerns about the economy simmer. Layoffs have also been widespread, with International Business Machines Corp.
among the latest announcing cuts.
The global job cuts will start in the next few weeks, Hasbro said. The toy maker employed 6,640 people worldwide as of December 2021, according to its most recent annual filing with securities regulators.
Hasbro said that the layoffs and “ongoing systems and supply-chain investments” will keep the company on track to hit its goal of between $250 million and $300 million in cost savings by the end of 2025.
Until then, however, 2022 and “particularly” the fourth quarter were a “a challenging moment for Hasbro,” the company said.
Earlier this month, analysts at BMO said they expected Hasbro’s holiday-season sales were likely among “the weakest in the North American toy industry.”
Hasbro’s stock has fallen about 29% in the last 12 months, compared with a decline of around 7% for the S&P 500 index