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Hasbro reported a smaller-than-expected decline in first-quarter sales on Wednesday, handily beating profit estimates, as lower inventories and stable digital games revenue helped cushion the blow from weaker toy demand.
The company’s shares, which have gained about 14% this 12 months, rose about 4% in premarket trading.
The Play-Doh maker struggled last 12 months with weakening demand as a consequence of a decline in consumer spending and tight inventory planning by mass retailers like Walmart and Target.
However, efforts to clear inventory throughout 2023 in addition to cost efficiencies helped operating margin rise to fifteen.3% from 1.8% a 12 months ago.
“We made solid progress in our turnaround efforts in the first quarter,” said Hasbro CFO Gina Goetter.
The company’s own inventory fell 53% 12 months over 12 months within the quarter, including a 57% decline in its consumer products division.
Revenue within the Wizards of the Coast and Digital Gaming segment increased 7% within the quarter, driven by the recognition of the games Baldur’s Gate III and Monopoly Go! games.
In contrast, the patron products division, which accounted for greater than half of its fiscal 2023 sales, saw a 21% decline in sales as a consequence of a general slowdown within the toy industry and better clearance discounts by retailers.
The Nerf toy gun maker’s revenue fell 24.3% to $757.3 million within the quarter ended March 31, lower than the 26.2% decline to $738.6 million estimated by analysts on average , as shown by LSEG data.
On an adjusted basis, Hasbro earned 61 cents per share, beating analysts’ estimate of 27 cents per share.
The toy maker stuck to its fiscal 2024 targets set in February. The Company continues to expect Consumer Goods segment sales to say no between 7% and 12% and Wizards of the Coast segment sales to say no between 3% and 5%.
On Tuesday Barbie Maker Mattel The company posted a narrower-than-expected loss in the primary quarter as a consequence of its cost-cutting measures.
