Toy makers are revealing a dire outcome for the holiday season as shoppers scooped up far fewer dolls and action figures than last year, but experts say there’s no relief in sight.
Hasbro’s fourth quarter was disappointing, with sales down 23% from a year earlier, it announced on Tuesday, following archrival Mattel’s announcement last week of flat sales forecast for 2024. It came out.
Even though the Barbie movie’s box office success led to sales of Barbie dolls, Mattel CEO Inon Kreitz said consumers were spending their money on “experiences” rather than products. Told. wall street journal last week.
Overall U.S. toy sales plummeted 8% to $28 billion last year, after increasing 1% in 2022, according to Circana data. This is in stark contrast to the dizzying growth recorded during the pandemic, with pent-up demand driving revenue growth of 17% in 2020 and 16% in 2021, according to Sarcana.
Hasbro said Tuesday that it expects sales to fall between 7% and 12% this year as it makes significant staff cuts.
The outlook for the toy industry is grim, with many consumers struggling financially with record credit card debt. But toy company executives say there are other factors contributing to the decline in toy sales, including shortages and sell-outs of essential toys and young people’s obsession with cell phones. It points out that.
Jay Foreman, chief executive of Basic Fun, which makes Tonka Trucks, Care Bears and LiteBrite, said: “The appeal of mobile phones is probably the most addictive and decisive thing I’ve ever seen.” ” he said. “The competition is about mind space and how much time kids spend on social media and streaming games.”
The privately held Boca Raton-based company’s 2023 sales fell 8%.
“We don’t see consumers who are financially constrained,” Forman said. “Planes are full, restaurants are full, bowling alleys are full. People are just spending less on toys.”
Monopoly maker Hasbro is reeling from the post-pandemic transition.
In December, the company cut 1,100 jobs globally, on top of the 800 jobs it cut earlier this year.
“While we view layoffs as a last resort given the state of the business, this is a lever that must be pulled to maintain the health of Hasbro,” CEO Chris Cox said in a memo to employees. ” he said.
The Pawtucket, Rhode Island-based maker of Monopoly, My Little Pony, Nerf and Transformers said its sales for the quarter ended Dec. 31 fell 23% to $1.3 billion, a drop that was as much as Wall Street reported. This was worse than the 19.3% decline expected.
Hasbro also reported a loss of $1.5 billion in 2023, primarily due to the sale of its TV and movie entertainment division.
Not all toy companies are predicting a bleak future.
Privately held MGA Entertainment, maker of LOL Surprise, Little Tikes and Bratz dolls, said it expects to grow up to 80% in 2024.
“The problem with the big toy companies is a lack of innovation,” Isaac Larian, the outspoken CEO of MGA Entertainment, told the Post.
“Of course, consumer debt is also a factor,” Larian said. “But parents and grandparents will always buy toys for their children if they are innovative and affordable.”
