Yeah. It's not as bad as it sounds. They're at around 8% net profit. Mattel is at around 16%. 50% growth would get them up to 12% net profit.

The problem is this. Saying you're going to increase net profits by 50%:

- Doesn't impress institutional investors. Talk is cheap and they could put all their Hasbro investments into Mattel stock if they were hungry for that.

- Doesn't impress knowledgeable speculators. Again, your target is still below what Mattel, a comparable company, is doing right now. Also, it's just going from 8% to 12%.

- Outrages consumers because 50% sounds like a big number and they associate it with your price hikes, even if your price hikes don't increase profit and aren't intended to.

It's strategically bad.

To be honest, as I've said before, if the profit strategy is influencing collector offerings, they're managing pennies at the risk of losing dollars.

Hasbro could give away its Haslabs to 20,000 people per item and it wouldn't substantially affect net profit at the company level. It might improve it.

There are non-profit motivated reasons to raise prices. Maybe you want retailers to clearance stock more regularly and the price hike subsidizes that. Maybe you want to make less of a product without losing money. Maybe your plan is for retailers to discount it back down to the original price but they can make the sale price look like a bigger discount. Maybe you want your product to be perceived as a status symbol. There are reasons, some better than others, that don't amount to trying to extract more money from consumers. They may be raising prices with the intent to make Walmart more money without increasing Hasbro's cut so Walmart will freaking get rid of Snake Eyes movie figures and stock new waves.

But the 50% comment was truly dumb. I don't think it helped with investors. And I don't think it helped with consumers.

As for layoffs, most of the companies getting into this fad (in the middle of a worker shortage) are generally not doing great with it.

And why WOULD it do well? To the employees and their sphere of influence, you make your company look bad. To customers, you reek if failure. To investors who think the economy's fundamentals are good, you look like an idiot, giving up operational capacity and marketshare. To investors who expect the global economy to collapse, well... I imagine most of them had their money in gold, oil, and water rights to begin with rather than a luxury product toy company but if they DID have money with you then downsizing confirms their fears and some of them will sell and put their money in oil, gold, and water rights.

It's a messaging no-win. Guaranteed to please nobody.

Only way it makes sense to me is you plan to use the savings to do a stock buyback to improve share price but any longterm investor worth their salt knows you're sacrificing longterm prospects to do that and any short term investor is going to hold you hostage unless you agree to keep doing it quarterly and then, if they're smart, they'll flip your stock and 18 months later you'll wind up bankrupt or owned by a vulture capital fund that saddles you with the debt of three other leveraged purchases of unrelated companies.

 

Well, the executives need to get that 7-figure bonus SOMEHOW...

 

Three executives meet.

Executive 1 says: "We laid off 25% of our workforce. Productivity went up by 15%, profits by 11%." The other two executives nod in awe.

One month later, the three meet again.

Executive 2 says: "Taking a cue from our friend here, we laid off 50% of our workforce. Productivity went up by 23%, profits by 38%." The other two executives nod in awe.

One month later, the three meet again.

Executive 3 says: "Well, we decided to lay off 100% of our workforce." Executive 1 asks: "Aaaand?" Executive 3 shrugs. "Productivity and profits dropped drastically. We're still in the process of figuring out why exactly that is."

 

Hopefully with ROTB and that D&D movie on the way that may give Hasbro a bit of a boost with all the hits they've taken lately.

All they need to do is not do something really unpopular with one or both of the fanbases that ends up turning a sizeable portion of their customerbase against them and whatever mid-tier films they're attempting to push.

But that'd be silly.

:^)

 

I hope Pulse doesn't get any worse because of this.

 

Google, Amazon, etc went on a hiring spree during covid, so their layoffs are more a correction now that people are not stuck at home.

 

"Cost savings" and "reducing costs"

Yeah, I'm very sure this will result in toy prices going down. 100% absolutely sure. No WAY they will just keep going up like they have for years.

Cost savings = finding new ways to make the toy quality even cheaper while keeping the price growing at the same pace.

Awaiting the day they start making figures out of recycled cardboard.

 

I read this:
https://investor.hasbro.com/news-re...es-organizational-changes-and-provides-update

While reading, came across this:

"We are focused on implementing transformational changes aimed at substantially reducing costs and increasing our growth rates and profitability. While the full-year 2022, and particularly the fourth quarter, represented a challenging moment for Hasbro, we are confident in our Blueprint 2.0 strategy, unveiled in October, which includes a focus on fewer, bigger brands; gaming; digital; and our rapidly growing direct to consumer and licensing businesses. Through this strategy, we are putting the consumer at the center of everything we do, and our Operational Excellence program is on track to drive significant cost savings across the business and improve our overall competitiveness. These strategic pillars helped to improve our results, particularly operating profit margin and revenue growth in key categories, in a challenging fourth quarter, and lay the groundwork for continued progress in 2023."

That to me, is a potential sign of more emphasis on Haslabs and licensing out more than they currently are now. Would be very interesting to see if Hasbro actually licenses out transforming Transformers toys beyond Lego and Robosen. For example, a transforming Optimus Prime in the Threezero Robodou line.

Hoping all the laid off employees are able to find new jobs quick and hope they had substantial severance pay.

In the press release they pretty much say they want to cut costs and boost profit so you’re right. If I were them, I’d start by getting out of NFTs and cutting production of the simpler toys that seem destined for the winter lineup at discount stores on arrival at mainline stores. Stuff like the simpler Marvel 5POA 12” figures, gimmicked out 6” figures, those finger puppet Earthspark toys, et al. Yes kids should have affordable toys readily available but they aren’t Hasbro’s strong point IMO.

 

If by "green agenda", you mean their profit margin, then yes. Less plastic means more money for executive pay raises. If Hasbro actually gave a shit about the environment, they wouldn't be doing that NFT bullshit.

 

If by "direct to consumer" they mean stocking more on Pulse I'm all for it. It's a pain hunting regular product on shelves, let alone exclusives.

 

God forbid that corporations, the largest producer of plastic pollution and carbon emissions try to do something to offset their destructive business plans

 

It reads like they feel that retail stores are holding them back a bit and are looking at ways of cutting out the middle man. Not just with Haslab but through other exclusives.

As for licensing, the great thing about that is that other people do the work for you while you basically wait for the royalties to come in. but they will need to be careful as to not dilute the brand by licensing to just anyone.

As for the simple toys, I think that's a retailer demand that Hasbro seeks to meet. Once it's in the distribution chain, I don't think they really care if Walmart decides to sit on product until a reset phases the product out and they have to dump their inventory to discount chains. We know it's not isolated to simple toys, too. Generations and Studio Series figures show up there as well. That's more of a retailer distribution issue.

 

What if they manufactured closer to home? You know, where we have actual environmental and labor laws? Saves on extremely wasteful shipping across the ocean too.

Nobody's mentioned that Mattel owns many of their factories where Hasbro doesn't. That accounts for some of the difference in profit margins. Outsourcing isn't always the cost saver that executives think it is.

 

Lol, like that is the reason why they did it.

 

Someone did the math and figured the plastic window costs 1/200th of a cent per package. The executive that decided they could advertise it as "environmentally friendly plastic free packaging" was most likely given a 5 figure bonus for the idea

 

I feel like this may also have something to do with the fact that multiple Walmarts I've seen have shelves super full of toys that won't move. My local Walmart still has about 5-6 each of Studio Series 86 Slug and Studio Series Grindor. This isn't uniquely a Hasbro problem though, the Jurassic World section is full too. Maybe it's just stores ordering way too many of one product? This is just pure speculation on my part.

 

This is the same company that promoted a man for coming up with the idea to include playdoh with Netflix Ultra Magnus, and he then used his new position to get a job at another company.

 

Man, I am wasting my talents when industry rewards genius like that.

 

If you're some nobody the exec will say "thank you", take credit for your idea, get a huge bonus, then come back to tell you "that was a good idea, now come up with 2 more before the end of the week or you're fired"