NEW YORK (AP) — Analysts expect the toy maker Hasbro Inc. will report slightly higher net income on lower revenue than a year ago when it reports its second-quarter financial results before the market opens on Monday.
WHAT TO WATCH FOR: Toy industry sales have been in slight decline all year, hurt by cautious consumer spending, a video game industry slump and increased demand for electronic gadgets like smartphones and tablets.
Hasbro's larger rival Mattel Inc. reported Wednesday that its second-quarter net income fell 24 percent while revenue edged up slightly to $1.17 billion from $1.16 billion.
Analysts will want to see how Hasbro's games division, which includes games like Scrabble and Monopoly, as well as its lines such as My Little Pony, Furby and Play-Doh are doing.
They will also be looking for an update on Hasbro's cost-cutting program, which includes cutting 10 percent of its workforce, consolidating facilities and reducing the number of product extensions.
BMO Capital Markets analyst Gerrick Johnson, who monitors stores' toy shelves, said he has seen weakness and lost shelf space in core boys items, games, outdoor and preschool brands. He said wet weather and heat waves probably didn't help sales of Nerf or Super Soaker either.
WHY IT MATTERS: Toys, unlike food and shelter, are not necessities, so how well they are selling indicates how confident consumers feel about the state of the economy and their finances.
WHAT'S EXPECTED: Analysts expect net income of 34 cents per share on revenue of $800.6 million.
LAST YEAR'S QUARTER: Hasbro, based in Pawtucket, R.I., earned 33 cents per share on revenue of $811.5 million.