Hasbro Q4 results beat overshadows muted annual revenue forecast, shares jump
By Anuja Bharat Mistry
Feb 10 (Reuters) - Play-Doh maker Hasbro HAS.O on Tuesday beat fourth-quarter estimates on strong holiday sales, but forecast muted annual revenue growth, as lower-income consumers remain hesitant to spend on non-essential items.
Shares of the company, however, surged as much as 8.9%, as investors cheered the results, a $1 billion share buyback plan and a forecast of a strong first half.
Hasbro said it expects stronger revenue growth in the first half, driven by releases within consumer products such as toys, games and action figures related to "Transformers - Age of the Primes" and Dungeons and Dragons board game.
"The top 20% of households in terms of wealth are really driving a lot of demand and are staying pretty resilient," CEO Chris Cocks said.
Hasbro has been pouring money into its digital‑gaming division, prompted 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.
Quarterly revenue from Hasbro's digital game, "Magic: The Gathering", more than doubled from a year earlier.
The traditional toy market has, however, been struggling with sluggish sales.
Hasbro expects annual revenue to grow in the range of 3% to 5%, below analysts' average estimate of a 5.16% rise, according to data compiled by LSEG.
"We believe this guidance will ultimately trend higher throughout the year as the company is typically conservative with its forward projections," said Zachary Warring, analyst with CFRA Research.
Separately on Tuesday, Hasbro 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.
Hasbro's fourth-quarter adjusted profit of $1.51 per share came above analysts' average estimate of 96 cents.
Its revenue of $1.45 billion also beat analysts' estimates of $1.26 billion.
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