Hasbro CEO expects toy demand to stay strong regardless of increased costs
Hasbro CEO and Chairman Brian Goldner expects the robust demand for toys to continue as the company hikes prices to offset increased shipping and other costs.
“For example, ocean freight is on average about four times as expensive as it was a year ago,” Goldner said on Monday in an interview with CNBC’s “Squawk on the Street”.
Hasbro expects the global price hike to take full effect in the fourth quarter as the company incurs higher costs.
The toy maker’s stock hit a 52-week high of $ 103.54 after earnings announcement on Monday. Shares recently rose nearly 12%, bringing their year-to-date gains almost 9%.
Hasbro reported better-than-expected results for the second quarter, with quarterly revenue up 54%. The company said its loss had dropped to $ 22.9 million, or 17 cents per share, on sales of $ 1.32 billion. After adjustments, Hasbro earned $ 1.05 per share, beating analysts’ estimates.
Hasbro said it continues to see strong demand for its Dungeons & Dragons and Magic: The Gathering games. Goldner assumes that consumers will continue to be interested in these and other products and that sales will not be affected by the higher prices.
“This is to cover our costs and maintain our gross margin and ensure that we can achieve the 15% or better operating profit margin that we are targeting for the year,” said Goldner.
Hasbro expects sales to grow in double digits this year and is positioning itself for profitable growth this year.