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Challenging Toy Industry to Ail Hasbro's (HAS) Q1 Earnings
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Hasbro, Inc. (HAS - Free Report) is scheduled to report first-quarter 2024 results on Apr 24, 2024, before the opening bell. In the last reported quarter, the company registered a negative earnings surprise of 40.6%.
What Do the Estimates Say?
The Zacks Consensus Estimate for fiscal first-quarter earnings per share is pegged at 27 cents, indicating a surge of 2600% from 1 cent reported in the year-ago quarter.
For revenues, the consensus mark is pegged at nearly $742.7 million, suggesting a decline of 25.8% from the year-ago quarter’s figure.
Let’s analyze the factors that are likely to make an impact this earnings season.
Factors to Note
Hasbro’s fiscal first-quarter performance is likely to have received a boost from its focus on enhancing and diversifying its product portfolio, inventory optimization and solid demand of its gaming category. This and the focus on an out-licensing model for certain brands are likely to have improved structural profitability in the to-be-reported quarter.
Increased focus on the implementation of a more flexible strategy with a marketing budget to enhance consumer targeting, maximize its impact and reset the cost structure is likely to have aided the company’s fiscal first-quarter performance.
However, challenges persist in the toy industry, which may hinder Hasbro's prospects for the fiscal first quarter. The industry continues to face issues such as an oversupply of discounted products, reflecting consumer preferences for value-driven purchases. Changes in the entertainment industry landscape, including a reduction in box office releases, are anticipated to provide less support to Hasbro's performance. The company expects steeper year-over-year declines in its fiscal first-quarter revenue.
Per our model, fiscal first-quarter total consumer product revenues are expected to decline 23.7% year over year to $397.2 million. Total entertainment revenues are expected to plunge 87% year over year to $24 million.
Our Take
Given both positive and challenging factors, investors might opt for a cautious stance on HAS stock. Although Hasbro has taken steps to address industry challenges, uncertainties prevail. Therefore, investors may avoid Hasbro shares for the time being until the company's response to the difficulties becomes more apparent and the effectiveness of its strategies in the upcoming quarter becomes evident.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Hasbro this time. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. However, that's not the case here.
Earnings ESP: Hasbro has an Earnings ESP of -7.83%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company carries a Zacks Rank #3 at present.
Stocks Poised to Beat on Earnings
Here are some stocks from the Zacks Consumer Discretionary sector that investors may consider, as our model shows that these, too, have the right combination of elements to post an earnings beat.
FOXA is expected to register a 23.4% increase in earnings for the to-be-reported quarter. It reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 71.1%.
DraftKings Inc. (DKNG - Free Report) currently has an Earnings ESP of +36.22% and a Zacks Rank of 3.
DKNG’s earnings for the to-be-reported quarter are expected to increase 67.8%. It reported better-than-expected earnings in two of the trailing four quarters and missed on the other two occasions, with a negative surprise of 57.1% on average.
Funko, Inc. (FNKO - Free Report) currently has an Earnings ESP of +6.90% and a Zacks Rank of 3.
FNKO’s earnings for the to-be-reported quarter are expected to increase 40.8%. It reported better-than-expected earnings in three of the trailing four quarters and missed on one occasion, the average surprise being 42.8%.
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Challenging Toy Industry to Ail Hasbro's (HAS) Q1 Earnings
Hasbro, Inc. (HAS - Free Report) is scheduled to report first-quarter 2024 results on Apr 24, 2024, before the opening bell. In the last reported quarter, the company registered a negative earnings surprise of 40.6%.
What Do the Estimates Say?
The Zacks Consensus Estimate for fiscal first-quarter earnings per share is pegged at 27 cents, indicating a surge of 2600% from 1 cent reported in the year-ago quarter.
For revenues, the consensus mark is pegged at nearly $742.7 million, suggesting a decline of 25.8% from the year-ago quarter’s figure.
Hasbro, Inc. Price and EPS Surprise
Hasbro, Inc. price-eps-surprise | Hasbro, Inc. Quote
Let’s analyze the factors that are likely to make an impact this earnings season.
Factors to Note
Hasbro’s fiscal first-quarter performance is likely to have received a boost from its focus on enhancing and diversifying its product portfolio, inventory optimization and solid demand of its gaming category. This and the focus on an out-licensing model for certain brands are likely to have improved structural profitability in the to-be-reported quarter.
Increased focus on the implementation of a more flexible strategy with a marketing budget to enhance consumer targeting, maximize its impact and reset the cost structure is likely to have aided the company’s fiscal first-quarter performance.
However, challenges persist in the toy industry, which may hinder Hasbro's prospects for the fiscal first quarter. The industry continues to face issues such as an oversupply of discounted products, reflecting consumer preferences for value-driven purchases. Changes in the entertainment industry landscape, including a reduction in box office releases, are anticipated to provide less support to Hasbro's performance. The company expects steeper year-over-year declines in its fiscal first-quarter revenue.
Per our model, fiscal first-quarter total consumer product revenues are expected to decline 23.7% year over year to $397.2 million. Total entertainment revenues are expected to plunge 87% year over year to $24 million.
Our Take
Given both positive and challenging factors, investors might opt for a cautious stance on HAS stock. Although Hasbro has taken steps to address industry challenges, uncertainties prevail. Therefore, investors may avoid Hasbro shares for the time being until the company's response to the difficulties becomes more apparent and the effectiveness of its strategies in the upcoming quarter becomes evident.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Hasbro this time. A stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings. However, that's not the case here.
Earnings ESP: Hasbro has an Earnings ESP of -7.83%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company carries a Zacks Rank #3 at present.
Stocks Poised to Beat on Earnings
Here are some stocks from the Zacks Consumer Discretionary sector that investors may consider, as our model shows that these, too, have the right combination of elements to post an earnings beat.
Fox Corporation (FOXA - Free Report) has an Earnings ESP of +15.53% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
FOXA is expected to register a 23.4% increase in earnings for the to-be-reported quarter. It reported better-than-expected earnings in each of the trailing four quarters, the average surprise being 71.1%.
DraftKings Inc. (DKNG - Free Report) currently has an Earnings ESP of +36.22% and a Zacks Rank of 3.
DKNG’s earnings for the to-be-reported quarter are expected to increase 67.8%. It reported better-than-expected earnings in two of the trailing four quarters and missed on the other two occasions, with a negative surprise of 57.1% on average.
Funko, Inc. (FNKO - Free Report) currently has an Earnings ESP of +6.90% and a Zacks Rank of 3.
FNKO’s earnings for the to-be-reported quarter are expected to increase 40.8%. It reported better-than-expected earnings in three of the trailing four quarters and missed on one occasion, the average surprise being 42.8%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.