(Reuters) - Hasbro Inc reported a 4% fall in adjusted revenue on Monday as delays in movie and TV show production hit its entertainment unit, taking the shine off its thriving board game business and allowing Mattel to catch up to its larger rival.
Hasbro’s shares fell over 10% in afternoon trading as it also cautioned of not having a major release of a kids’ movie to boost toy sales during the holiday season. The company, however, said adjusted sales and earnings for the holiday quarter could still rise.
The fall in the company’s overall net revenue for the third-quarter, excluding the acquisition of “Peppa Pig” maker Entertainment One, was in contrast with rival Mattel, which last week posted net sales growth of nearly 10% for the same period.
Hasbro has been trying to broaden its revenue base by making movies, TV shows and video games based on characters it owns, but the coronavirus crisis has highlighted the risk of that bet as scrambled studio production schedules caused a 28% fall in the company’s TV, film and entertainment business.
Analysts at MKM Partners attributed some of the drop in Hasbro shares on Monday to heightened expectations after Mattel trounced sales and profit forecasts on strong demand for its Barbie line of dolls.
Hasbro reported third-quarter net revenue of $1.78 billion, beating analysts’ estimates of $1.75 billion, according to IBES data from Refinitiv.
However, Mattel, which is still almost entirely reliant on traditional toy sales, beat estimates by nearly $200 million, while closing the revenue gap on its larger rival.
Still, total revenue from all of Hasbro’s gaming brands including Monopoly, Scrabble and Dungeons & Dragons jumped 21% as stuck-at-home families spent more on board games.
On an adjusted basis, Hasbro posted earnings of $1.88 per share, beating estimates of $1.63 per share.
Reporting by Uday Sampath in Bengaluru; Editing by Anil D’Silva
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