Toys stuck in supply chain chaos
New York (CNN Business)Hasbro brushed off global supply chain concerns and reported solid sales and earnings for the third quarter, thanks in large part to strong demand for its Dungeons & Dragons and Magic: The Gathering role playing games.
The toy giant said Tuesday that third quarter revenue was up 11% from a year ago, in line with forecasts. Earnings easily topped Wall Street’s estimates. Shares of Hasbro (HAS) rose nearly 3% Tuesday.
Sales surged 32% at its Wizards of the Coast and Digital Gaming unit, which includes the popular D&D and Magic games. Hasbro’s rapidly growing entertainment business, which produces a My Little Pony show for Netflix (NFLX) and owns the popular Peppa Pig and PJ Masks brands, soared 76%.
The good news from Hasbro comes just a week after toy rival Mattel (MAT) reported healthy sales and gave an upbeat outlook for the fourth quarter holiday shopping season.
But Hasbro is also dealing with the loss of its long-time chairman and CEO Brian Goldner, who died last week at the age of 58…just days after the company announced he would be taking a medical leave of absence due to cancer.
Rich Stoddart, who had been the lead independent board director at Hasbro, is taking over as CEO on an interim basis.
“While we mourn the passing of our long-time leader and friend Brian Goldner, our performance is a testament to the power and potential of the Brand Blueprint strategy he architected,” Stoddart said in a statement.
Stoddart added that the company was able to post solid growth despite “global supply chain challenges in the quarter.” He added that the company was ready to meet consumer and retailer demand for its toys during the holidays.
“Our teams continue to work around the clock to secure transport for our goods to meet the robust demand for Hasbro brands,” Stoddart said.
Hasbro noted that about $100 million in orders were not filled in the third quarter due to port congestion and other supply chain issues. That resulted in a hit to operating profit as a result of lower sales and higher freight costs. But the worst may soon be over.
“We have delivered much of what was delayed in the third quarter despite continued supply chain challenges,” said Hasbro chief financial officer Deborah Thomas in the earnings release.
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