Entertainment products and media company Hasbro, Inc. (NASDAQ: HAS) the stock recently hit a 52-week low of $63.44 lower (-35%) over the year. The company missed its third-quarter 2022 profit estimates, primarily due to overstocking its retailers in the second quarter of 2022 to avoid potential postalpandemic problems in the supply chain. It’s Magic: The Gathering card game sets and content releases were pushed to the fourth quarter as it celebrates its 30th anniversary en route to the holiday season. Hasbro expands its iconic IP portfolioincluding GI Joe, Monopoly, My Little Pony, Nerf, Play-Doh, Power Rangers and the Transformers, to other forms of entertainment including video gamesdigital content, live-action movies and shows for release in both major theaters such as AMC Entertainment (NYSE:AMC) and streaming services Like it Netflix (NASDAQ: NFLX)and Paramount Global (NASDAQ: PARA). Hasbro remains committed to its full-year budget target, which is expected to have flat revenue growth. The strong US dollar is a boon to Hasbro’s product margins, as it produces most of its toy products in China and India. With the holiday season approaching, Hasbro may surprise positively despite the impact of inflationary headwinds customer discretionary spending pattern.
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Although the 2021 live-action GI Joe movie Snake Eyes was bombed, they’re continuing with a Amazon (NASDAQ: AMZN) Prime live-action TV series centered on GI Joe’s Lady Jaye. It tries to build its own “universe” for live action, similar to the Marvel Cinematic Universe (MCU) (NYSE:DIS)and the DC Expanded Universe (DCEU) (NYSE: WBD). It is also licensing MCU IPs for action figures and toys with a major rollout of the upcoming Black Panther: Wakanda Forever live-action movie slated for November 2022. The company is also preparing the next iteration of its timeless Dungeons & Dragons franchise. in the coming year, which will have generations of fans, from baby boomers to Gen-Zers.
Income Miss
On October 18, 2022, Hasbro released its third quarter 2022 results for the quarter ended September 2022. The company reported adjusted earnings per share (EPS) of $1.42 excluding one-time items versus consensus analyst estimates of $1. 60 , a (-$0.18) missing. Revenues were down (-15%) year-over-year (year-on-year) to $1.68 billion, in line with analyst consensus. The expects full year 2022 revenues to decline stable to slightly in constant currencies from (-3.7%) current estimate. Adjusted profit margins are expected to be 16.7%, excluding non-GAAP items. The company ended the quarter with $552 million in cash. The weak numbers were mainly due to the accelerated push of product to retailers in Q2 ahead of supply chain shortages and the Magic: The Gathering releases scheduled for release in Q4 rather than Q3 like last year.
Comments from CEO and CFO
Hasbro CEO Chris Cocks commented: “As expected, the third quarter is our toughest comparison and was further impacted by increasing price sensitivity for the average consumer. To meet our full-year outlook, we expect Hasbro’s sales in the Q4 will be similar to last year on a constant currency basis, with particular strength from our Wizards and Digital Gaming segments. Growth will be driven by what we expect to be one of the largest fourth quarters for MAGIC: THE GATHERING will be as we kick off the brand’s 30th anniversary and celebrate Hasbro’s first-ever $1 billion brand.”
Attractive pullback levels to watch out for
Using the gun cards on the weekly and daily timeframes provides an accurate picture of the landscape for HAS stock. Weekly Gun Chart Formed a Bearish Inverse Pup Breakdown on the $84.13 Rejection Fibonacci (fib) level. The breakdown is led by the declining 5-period weekly resistance moving average (MA) at $67.89, followed by the 15-period weekly MA at $75.83. Weekly stochastics slipped through the 20 band and geared up for another possible bearish mini-inverse pup breakdown below the 10 band. The weekly lower Bollinger Bands (BBs) are at $61.51. the weekly market structure layer (MSL) buy triggers on breakout up to $71.22. The daily gun chart also has a bearish inverse breakout of the pups, led by the declining 5-period daily MA at $65.58, followed by the 15-period MA resistance at $67.38. The daily stochastic has rejected multiple attempts to bounce through the 20 band while again trying to traverse the 10 band for a bounce. The daily lower BBs are at $63.24. Attractive pullback levels sit at the $63.71 fib, $62.27 fib, $60.91 fib, $59.80 fib, $58.22 fib and the $56.29 fib level.
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