Spin Master shares experienced a decline in late morning trading on Tuesday, following Hasbro's announcement of significant workforce cuts. With weak sales in toys and games persisting throughout the holiday shopping season, Hasbro plans to reduce its workforce by nearly 20%.
As a result, Spin Master shares dropped by 5.3% to 32.66 Canadian dollars ($24.06) at 12:04 p.m ET, contributing to a year-to-date decrease of 2%.
Hasbro, renowned for popular products such as Transformers action figures, the Dungeons & Dragons fantasy game, and Monopoly, revealed its intention to eliminate approximately 1,100 jobs within the next 18 to 24 months. This comes in addition to the 800 employee layoffs that occurred earlier this year. Consequently, Hasbro's stock has declined by 1.6% to $48.09. Furthermore, shares of competing toy maker Mattel have also fallen by 3.5% to $18.25.
Moreover, Spin Master stated that toy gross product sales for the year are estimated to decrease by a high single-digit percentage compared to 2022 levels. Previously, they had anticipated these sales to remain steady or slightly decrease.
Additionally, in October, Spin Master announced plans to acquire Melissa & Doug, a U.S.-based toy maker, for $950 million in cash. This strategic move aims to expand Spin Master's portfolio of toys and diversify its revenue base.
