Hasbro revenue beats as gaming boost offsets slowing demand for toys

By Deborah Mary Sophia

(Reuters) -Hasbro Inc topped Wall Street estimates for quarterly revenue on Thursday as players snapped up its "Magic: The Gathering" game sets, helping counter weak demand for its toys and action figures.

The company's shares were up about 9% at $56.09.

An overall slowdown in demand for toys and retailers cutting back on orders to manage their inventories are set to temper the U.S. toy industry this year, with Hasbro expecting the toys and games market to remain flat or decline this year.

However, Hasbro saw a 16% jump in revenue from its "Magic: The Gathering" tabletop and digital game, with fans piling on the February release of its "Phyrexia: All Will Be One" game set.

That helped the Monopoly board game maker offset a 23% slump in revenue at its consumer products segment, its largest business unit, stemming from weaker demand for NERF blasters, Play-Doh and Peppa Pig toys.

While Hasbro is still cautious about consumer spending, it is banking on a series of blockbuster movie releases, upcoming "Magic: The Gathering" launches, and expectations of a return to normal shipment levels to retailers to steer through 2023, outgoing CFO Deborah Thomas said.

The company reported first-quarter adjusted earnings in line with analysts' estimates and maintained its annual sales and profit forecasts.

In contrast, rival Mattel Inc on Wednesday posted a bigger-than-expected quarterly loss, pinched by retailers trimming orders for its Barbie and Hot Wheels toys.

"'Magic: The Gathering' is becoming a monster brand with a steady stream of new product releases that are fueling sales. Leaning into gaming in Q1 helped (Hasbro) offset some of the inventory struggles ... on the toy side of the business," James Zahn, editor-in-chief of trade magazine "The Toy Book", said.

Hasbro's net revenue fell 14% to $1.00 billion in the quarter, but beat analysts' estimates of $878.4 million, according to Refinitiv IBES data.

(Reporting by Deborah Sophia in Bengaluru; Editing by Shounak Dasgupta)

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