Toy and board games giant Hasbro reported worse-than-expected earnings for its 2020 second quarter. The company blamed its poor performance on the nationwide store closures and supply disruptions caused by the coronavirus pandemic.
For its second quarter, ending on June 28, the company reported a net loss of around $33.9 million, or roughly 25 cents per share. This was a big departure from the $13.4 million in profits posted by the company over the same period last year. Revenues for the quarter fell to about $860.3 million, slightly below analysts' expectations of $922 million.
Following the release of its earnings report, Hasbro's share prices dipped by about 6.8 percent during premarket trading.
Hasbro noted that around 30 percent of its global sales and revenues had come from online sales during the quarter. With most of its stores closed, the company had attempted to market its products online to at least make up for lost sales during the period.
According to the company, demand for its toys, board games, and other entertainment products had remained high during the quarter. However, its low retail inventory and the months of store closures had resulted in a 29 percent drop in its revenues for the period.
The performance of the company's gaming portfolio, including popular products such as its Jenga, Mouse Trap, Twister, and Connect 4, had remained strong during the period. Hasbro stated that revenue for the particular category had increased by around 11 percent. However, the company apparently could not meet the increasing demand due to disruptions in its supply chain, which resulted in low stock levels.
The Rhode Island-based company remains positive for its prospects in the coming quarter, stating that it has seen an improvement in its sales number after some of its stores were reopened late into the second quarter. Hasbro's chief executive officer, Brian Goldner, mentioned in a statement that the company's performance should improve in the coming quarters as the business environment continues to recover. He added that the company is still expecting a surge in sales in the third quarter and throughout the holiday season.
As for its supply chain, Hasbro stated that the majority of its operations in China, which represent about 55 percent of its total supply, has already resumed operations. However, its production facilities in the U.S. and India have remained closed. The company's senior vice president of investor relations, Debbie Hancock, mentioned during Hasbro's earnings call on Monday that they are expecting a full recovery of the supply chain in the coming quarters.
