- Hasbro reported first-quarter earnings Wednesday, telling investors that it has a solid financial footing during the coronavirus pandemic.
- The toymaker is cutting costs as it prepares to meet the seasonal demand that comes in the second half of the year.
- Demand for family games has spiked during the quarter and into April.
Hasbro said Wednesday it expects its second quarter to take a hit from the coronavirus pandemic, but it expects to be ready for the holiday season.
The comments come as the toymaker reported its first-quarter earnings, telling investors that it has a solid financial footing and is cutting costs as it prepares to meet the seasonal demand that comes in the second half of the year.
The coronavirus pandemic has led to store closures due to country-wide restrictions on social interactions as well as global production shutdowns. It's also created uncertainty, which prompted Hasbro to withdraw its fiscal 2020 financial outlook.
That said, Hasbro has benefited from an increased demand for family games, which spiked during the quarter and into April.
"People want to make social connections and we're seeing it across the board," Brian Goldner, Hasbro's chairman and chief executive officer, said on CNBC's "Squawk Box" Wednesday.
In the quarter ended March 29, the company swung to a net loss of $69.6 million, or 51 cents a share, from net income of $26.7 million, or 21 cents a share, in the year-ago period.
Excluding non-recurring items, such as eOne acquisition-related expenses, adjusted earnings per share came to 57 cents, below the consensus of 58 cents, according to data from Refinitiv.
Revenue rose to $1.11 billion from $732.5 million but came up shy of the Refinitiv consensus of $1.14 billion.
Goldner said that sales across every category, including preschool, kids, adults and family games, saw growth during the quarter. Hasbro's gaming category, including Magic: The Gathering, Monopoly and Hasbro Gaming, grew 40%.
The company also saw strong demand for its animated content, including its newly acquired Peppa Pig brand. "Peppa Pig" is now the most viewed preschool show in the world on YouTube, the company said. PJ Masks, another Hasbro animation property, is also one of the most streamed children's shows on Netflix in the U.S. and U.K.
The company said it ended the first quarter with $1.2 billion in cash and has a revolving credit facility of $1.5 billion available, should it be needed.
"Hasbro is operating from a solid financial position with substantial liquidity available in both cash on hand and a revolving credit facility," Deborah Thomas, Hasbro's chief financial officer, said in a statement.
Manufacturing and warehouse partners outside of China are operating at close to normal levels, the company said. However, since mid-March some of these locations have been impacted by local government safety restrictions. Some manufacturing facilities in Massachusetts, Texas, Ireland and India have been temporarily closed.
Third-party factories in China represent about 55% of Hasbro's manufacturing production and those facilities are operating at the planned capacity for this time of year, which is typically a bit slower than later in the year.