Toymaker Hasbro found consumers were willing to pay more for some toys and games.
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Toymaker Hasbro reported better-than-expected quarterly profits on Tuesday’s earnings call.
The home of Transformers, Play-Doh, and Power Rangers found higher prices didn’t deter consumers.
Hasbro expects inflationary pressures will continue through the holiday season.
Even with the cost of games and toys going up, players gonna play, play, play, play, play.
In the face of higher raw material costs and supply-chain disruptions, Hasbro, the maker of My Little Pony and games like “Magic: The Gathering,” has raised prices. But consumers’ appetite for toys and gaming remains sturdy despite the price hikes, company officials said on an earnings call Tuesday.
“We have very resilient segments across toys, games, and entertainment. These tend to be small luxuries that consumers value pretty highly.” Chris Cocks, CEO of Hasbro, said on the call.
The toymaker reported better-than-expected quarterly profits on Tuesday, posting income of $142 million for the quarter ended in late June compared with a loss of $22.9 million a year earlier. Revenue edged up 1% to $1.34 billion.
With a toy portfolio that includes classic names like Transformers, Play-Doh, and Power Rangers, Hasbro found some consumers were not dissuaded by higher costs.
“We continue to see consumers being very resilient with a deep well of savings and a large amount of passion for pursuing what they love,” Cocks said.
Hasbro expects inflation will continue through the holiday season, an assessment that’s in line with many economists’ forecasts. However, if past economic downturns indicate future performance, Cocks said he’s confident that the company will continue to fare well.
“The games business tends to be very resilient,” Cocks said. “‘Magic: The Gathering’ has grown 12 out of the last 13 years, and that growth vector started back in 2008, during the last financial crisis.”
Consumers’ willingness to plunk down more money for toys and card games like “Magic: The Gathering” — or, in some cases, get their parents to do so — comes as inflation sits at its highest level in 40 years. Costs for essentials like gas, groceries, and rent have soared amid surging demand and supply-line bottlenecks following the pandemic-induced shutdowns that battered large portions of the economy.
Despite absorbing higher production costs and commodity volatility, sales at Hasbro have remained stable with the second-quarter expansion of tabletop and online versions of “Magic: The Gathering.” Hasbro’s “Wizard’s of the Coast” and digital gaming division, which includes the “Dungeons & Dragons” franchise, saw a 17% jump in operating profit. “Dungeons & Dragons” appears to be enjoying renewed interest in recent years after being prominently featured on the popular Netflix series “Stranger Things.”
Last week, Hasbro announced a partnership with The New York Times to turn Wordle, the viral online puzzle game, into a board game. The forthcoming “Wordle: The Party Game” will hit shelves in October.
Hasbro shares rose about 1% in afternoon trading.