Hasbro sees revenue growth below estimates amid tight spending on toys
Feb 10 (Reuters) - Play-Doh maker Hasbro HAS.O on Tuesday forecast annual revenue growth below estimates despite reporting a strong holiday quarter, as consumers remain hesitant to spend on non-essential items.
Low to middle-income consumers have been struggling with rising product prices tied to U.S. import tariffs, which has affected demand for discretionary items such as toys, electronics and apparel.
Hasbro expects annual revenue to grow in the range of 3% to 5%, compared with analysts' average estimate of a 5.16% rise, according to data compiled by LSEG.
The company, however, managed to beat fourth-quarter revenue estimates, as people stretched their budgets to buy gifts during the holidays.
The quarter also benefited from Hasbro's digital game, "Magic: The Gathering", revenue from which more than doubled, compared with a 19% decline a year ago.
Hasbro has been pouring money into its digital‑gaming division, driven by strong demand and rising income from licensed games.
The investments are a part of its broader push to evolve into a digital‑first play and IP company as demand for traditional toys has softened.
Hasbro on Tuesday announced a multi-year licensing deal with Warner Bros Discovery WBD.O starting in 2027, making it the global primary licensee to create toys and games based on the "Harry Potter" universe.
The Hollywood studio also has licensing deals with other toy makers such as Mattel and Lego.
"Competition is strong within the toy industry and demand has been stable but weak in recent years. We would expect small price increases for the company's strongest brands," Zachary Warring, analyst at CFRA Research, said.
Hasbro's fourth-quarter adjusted profit of $1.51 per share came above analysts' average estimate of 96 cents.
Its total revenue of $1.45 billion also beat analysts' estimates of $1.26 billion.
Shares of the company rose about 2% in premarket trading after Hasbro also announced a $1 billion share buyback plan.
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