Despite owning some of the most iconic board games in the industry, such as Monopoly, as well as one of the most popular card games in Magic: The Gathering, the toymaker suffered a 28% drop in revenue to $860.3 million, compared to the consensus estimate of $965.5 million, leading to adjusted earnings of only $0.02 per share, far below the $0.22 per share analysts had been expecting.
A tale of two toymakers
Where Mattel surprised the market last week with an earnings report that beat Wall Street estimates on the top and bottom lines as consumers returned to old favorites like Barbie and Uno to cope with lockdown orders, Hasbro had a more difficult time translating that trend into growth.
The toymaker said operations were hampered by retail store closures due to the coronavirus pandemic. It's possible Wall Street was just more pessimistic about Mattel's ability to sell into the storm, but Mattel's sales and profits seemed less impacted by the COVID-19 pandemic despite the company having to contend with similar retail conditions to Hasbro.
Hasbro did say e-commerce growth was strong, and CEO Brian Goldner said that although the pandemic's ongoing impact "remains unpredictable, as stores reopen and we begin to return to production for entertainment, we expect the environment to improve in the third quarter and set us up to execute a good holiday season."
There were gains made in gaming as segment revenue rose 11% due to stronger sales of Jenga, Connect 4, Battleship, Mousetrap, and Twister -- all classic analog games -- but store shutdowns and delayed releases of new movies overwhelmed the toymaker this quarter.