By Shares of Hasbro and Mattel took a hit in after-hours trading on Monday following Hasbro’s warning of sluggish sales during the holiday season and the announcement that it would be cutting nearly 20% of its workforce.
Stock Performance
After the news broke, Hasbro shares experienced a 4.4% decline, falling to $46.75. Similarly, Mattel stock fell 1.7%. Year-to-date, Hasbro stock has experienced a decline of approximately 20%, while Mattel’s stock has risen by 6%.
Workforce Reduction Announcement
In a memo addressed to employees, Hasbro’s Chief Executive, Chris Cocks, revealed that the company would be cutting around 1,100 jobs. This is in addition to the 800 layoffs that occurred earlier this year. Cocks stated that the decision was a result of weaker sales throughout the year, and this trend was expected to continue into the holiday season and beyond.
Declining Toy Sales
Preliminary data from the critical holiday shopping period suggests that toy sales are continuing to lag. Specifically, toy sales in November dropped by 10% compared to the previous year, with a 7% decline in units sold, according to Circana data.
Mattel’s Flat Sales Expectation
On the other hand, Mattel has expressed its anticipation that full-year sales will remain flat when compared to 2022. The recent success of the Barbie movie has contributed to the company’s positive results.
In conclusion, both Hasbro and Mattel are facing challenges due to sluggish sales. Hasbro’s decision to reduce its workforce further highlights the seriousness of the situation. As the holiday season progresses, it remains to be seen how these companies will navigate the difficult market conditions.
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