Hasbro Looks To Cut More Costs To Offset Slumping Sales

In a new article from the WSJ, Hasbro's Chief Financial Officer Gina Goetter stated that the company will be increasing efforts to cut costs within the company more aggressively in order to help compensate for slumping sales. Revenue at Hasbro fell 15% in 2023 to $5 billion as demand in the toy market softened due to things like rising inflation. This month they announced that they have increased their 2025 cost-savings goal from $350-$400 (Which is what they announced the goal would be 2 months ago) to $750 million.

This effort has started in their game division and will expand to other product brands throughout 2024.

The article doesn't talk much about action figures but it does use Hasbro's Nerf brand as an example. They state that Hasbro has identified 40 cost-savings ideas for that brand that include things such as the thickness of the plastic it uses to the type of packaging. Hasbro states that if they adopt just 8 of the largest ideas to cut costs for Nerf, it will save them $10 million.

Other actions Hasbro has taken recently to cut costs at the company include the announcement late last year where they stated that they would be cutting roughly 20% of it's workforce in 2024, which translates to roughly 1100 people. Hasbro is also looking to lower vendor costs and increase efficiency across its supply chain.

Hasbro also has begun shifting their less profitable brands to a licensing model which means instead of making the product themselves and carrying that inventory on it's books, they are allowing other companies to pay them for the privilege of making the stuff. Examples given in the article for this included Easy-Bake Oven and FurReal Friends.

As I said, this article doesn't really focus much on the action figures that are produced in large part for adult collectors these days. In fact Hasbro has previously stated that things like Transformers experienced a %25 full year growth in 2023 and G.I. Joe has been mentioned as doing well for them as well. Still you have to wonder overall how these cost saving measures Hasbro plans to implement will effect in terms of quality and availability the stuff we the adult collector buy from them?