The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how toys and electronics stocks fared in Q1, starting with Hasbro (NASDAQ:HAS).
The toys and electronics industry presents both opportunities and challenges for investors. Established companies often enjoy strong brand recognition and customer loyalty while smaller players can carve out a niche if they develop a viral, hit new product. The downside, however, is that success can be short-lived because the industry is very competitive: the barriers to entry for developing a new toy are low, which can lead to pricing pressures and reduced profit margins, and the rapid pace of technological advancements necessitates continuous product updates, increasing research and development costs, and shortening product life cycles for electronics companies. Furthermore, these players must navigate various regulatory requirements, especially regarding product safety, which can pose operational challenges and potential legal risks.
The 4 toys and electronics stocks we track reported an exceptional Q1. As a group, revenues beat analysts’ consensus estimates by 2.4% while next quarter’s revenue guidance was in line.
Thankfully, share prices of the companies have been resilient as they are up 6.8% on average since the latest earnings results.
Best Q1: Hasbro (NASDAQ:HAS)
Credited with the creation of toys such as Mr. Potato Head and the Rubik’s Cube, Hasbro (NASDAQ:HAS) is a global entertainment company offering a diverse range of toys, games, and multimedia experiences for children and families.
Hasbro reported revenues of $887.1 million, up 17.1% year on year. This print exceeded analysts’ expectations by 14.8%. Overall, it was an incredible quarter for the company with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
“Hasbro’s Playing to Win strategy is delivering in a challenging environment. We’re outperforming today and building for tomorrow through disciplined execution, standout partnerships like our extended Disney agreement, and future-focused bets that are already paying off,” said Chris Cocks, Hasbro Chief Executive Officer.
Hasbro achieved the biggest analyst estimates beat and fastest revenue growth of the whole group. The stock is up 26% since reporting and currently trades at $66.32.
Is now the time to buy Hasbro? Access our full analysis of the earnings results here, it’s free.
Mattel (NASDAQ:MAT)
Known for the creation of iconic toys such as Barbie and Hotwheels, Mattel (NASDAQ:MAT) is a global children's entertainment company specializing in the design and production of consumer products.
Mattel reported revenues of $826.6 million, up 2.1% year on year, outperforming analysts’ expectations by 4.4%. The business had an exceptional quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
The market seems happy with the results as the stock is up 14.9% since reporting. It currently trades at $18.59.
Is now the time to buy Mattel? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Bark (NYSE:BARK)
Making a name for itself with the BarkBox, Bark (NYSE:BARK) specializes in subscription-based, personalized pet products.
Bark reported revenues of $115.4 million, down 5% year on year, falling short of analysts’ expectations by 9.9%. It was a mixed quarter as it posted a solid beat of analysts’ EPS estimates but a significant miss of analysts’ adjusted operating income estimates.
Bark delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 29.3% since the results and currently trades at $0.96.
Read our full analysis of Bark’s results here.
Funko (NASDAQ:FNKO)
Boasting partnerships with media franchises like Marvel and One Piece, Funko (NASDAQ:FNKO) is a company specializing in creating and distributing licensed pop culture collectibles.
Funko reported revenues of $190.7 million, down 11.6% year on year. This number met analysts’ expectations. It was an exceptional quarter as it also produced a solid beat of analysts’ EBITDA estimates.
Funko had the slowest revenue growth among its peers. The stock is up 15.5% since reporting and currently trades at $4.84.
Read our full, actionable report on Funko here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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