BMO Capital Markets analyst Gerrick Johnson trimmed earnings expectations for Hasbro ( NASDAQ: HAS ) in 2023 after noting deeply disappointing holiday sales.
“Despite a pickup at retail in the last week of the season — momentum that has carried through to the post-Christmas week — we still think HAS's holiday season toy sales were amongst the weakest in the North American toy industry,” he told clients on Wednesday. “In particular, HAS is still feeling a COVID hangover in games and Play-Doh. With most families having a fully-stocked cupboard of games, especially the Hasbro classics, there was little demand for new ones.”
He added that both Play-Doh and action figure sales look slower than anticipated, leading to elevated inventory levels and subsequent discounting. Nerf, meanwhile “looks tired” and will likely be subject to the same promotional activity.
While a strong 2023 movie slate could rejuvenate action figure sales and digital efforts for its Magic: The Gathering business could offer a boost, shares look “fully valued” at present, according to Johnson. As such, he assigned a Hold-equivalent rating to the stock.
Additionally, he pulled back both EPS and revenue expectations for both the fourth quarter of 2022 and the full year for both 2022 and 2023. Johnson expects $4.15 in earnings per share for the full-year 2022 alongside $6.04B in revenue, down from previous estimates that reflected $4.75 in earnings per share on $6.18B in sales. Analyst consensus on the figures stand at $4.68 and $6.12B, respectively. Johnson reduced his price target to $66 from $74.
Read more on Stifel’s similarly downbeat holiday sales data review .
For further details see:
Hasbro holiday toy sales among ‘weakest in history’ - BMO