By Drew Richardson - CNBC
Toymaker Hasbro has announced the layoff of about 1,100 employees as it grapples with a drop in sales that has spilled over into the holiday shopping season, according to a memo obtained by CNBC.
Hasbro had about 6,300 employees at the beginning of this year, according to a company report.
Shares of the company fell more than 4% in trading on Monday. Shares of rival Mattel also fell after hours.
Hasbro board games in 2021 in San Anselmo, California.Justin Sullivan/Getty Images file
"We anticipated that the first three quarters would be difficult, particularly in the toy sector, where the market is emerging from pandemic-driven record highs," Hasbro Chief Executive Chris Cocks said in a statement. While we have made some important progress across our organization, the headwinds we saw in the first nine months of the year have continued through the holiday period and are likely to persist into 2024."
Hasbro, which already laid off hundreds of employees at the beginning of the year, had warned in October that trouble was coming. In the company's latest quarterly earnings report, Hasbro sharply lowered its already moderate full-year outlook and forecast a revenue decline of between 13% and 15%.
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Sales of popular toy brands had fallen significantly, the company explained in its October quarterly report. Popular brands like My Little Pony, Nerf, and Transformer had fallen 18% at the time.
Hasbro shares were down nearly 20% through Monday's trading close.
Mattel, a competitor to Hasbro, had also warned of weak sales. However, Mattel shares had risen about 6% as of Monday, driven largely by the box office success of the movie Barbie. However, it still lags behind the S&P 17's 500% rise so far this year.
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Retailers in general could face a tepid holiday season in terms of sales. Toys have had fewer discounts for consumers compared to sales a year ago.