Hasbro is laying off about 1,100 employees as the toy maker struggles with soft sales that have carried into the holiday shopping season, according to a company memo obtained by CNBC.
Hasbro had about 6,300 employees as of earlier this year, according to a company fact sheet.
Shares of the company fell more than 4% in extended trading Monday. Rival Mattel’s stock also slipped after hours.
“We anticipated the first three quarters to be challenging, particularly in Toys, where the market is coming off historic, pandemic-driven highs,” CEO Chris Cocks said in the memo. “While we have made some important progress across our organization, the headwinds we saw through the first nine months of the year have continued into Holiday and are likely to persist into 2024.
Hasbro, which already laid off hundreds of employees earlier this year, had warned in October that trouble was on the horizon. In the company’s most recent quarterly earnings report, Hasbro slashed its already-soft full-year outlook, projecting a 13% to 15% revenue decline for the year.
Popular toy brand sales had dropped significantly, Hasbro also said in the October quarterly report. Popular brands like My Little Pony, Nerf and Transformer had fallen 18% at the time, due to “softer category trends.”
Hasbro’s stock was down nearly 20% through Monday’s close.
Hasbro competitor Mattel had also warned of soft sales. Yet Mattel’s stock is up about 6% through Monday, powered a great deal by the box office success of the film “Barbie.” That’s still behind the 17% gain posted by the S&P 500 so far this year, though.
Retailers overall could be in for a tepid holiday season, and toys saw lower discounts for consumers when compared to discounts a year ago.