Key Takeaways:
Hasbro Inc. (HAS) shares fell 7.8 percent Wednesday even after the company reported first-quarter revenue of $1 billion, a 13 percent year-over-year increase that beat expectations.
"Q1 was a great start to the year. I think there’s a lot of tailwinds that are blowing the business," CEO Chris Cocks said on the earnings call, citing the strength of the Wizards of the Coast division.
The toy and game maker posted strong top- and bottom-line results for the quarter ended in March, though the market focused on forward-looking risks.
The negative stock reaction came after Hasbro maintained its full-year guidance for revenue growth of 3 percent to 5 percent, a move analysts suggested was conservative after the strong quarter. Management also disclosed a cybersecurity incident from late March that will shift between $40 million and $60 million in revenue from the second quarter to the second half of the year and incur approximately $20 million in related operating expenses.
Cocks told analysts that reiterating guidance was the "prudent move" given concerns over rising oil prices and tariff uncertainty. The revenue delay means the company now expects the third quarter, not the second, to be its biggest of the year. The results were driven by strong performance in its gaming portfolio, with "Lorwyn Eclipsed" becoming the best-selling MAGIC Premier set.
The stock drop makes Hasbro the worst performer in the S&P 500 for the session. The decline puts the stock at its lowest since late April, testing its 50-day moving average. Investors will watch for further details on the financial impact of the cyber incident in the company's Q2 earnings report.
This article is for informational purposes only and does not constitute investment advice.
