Zinger Key Points
- Hasbro targets "kidults" to check declining sales.
- Hasbro plans $1 billion in cost savings by 2027.
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Toy maker Hasbro Inc. HAS is tapping into a growing market segment, aiming to appeal to adults and teens, commonly referred to as “kidults,” reported the Wall Street Journal. These mature customers are driving a surge in toy-related spending, with many shelling out hundreds of dollars on collectibles and intricate playthings.
The report cited that currently, approximately 60% of Hasbro’s revenue comes from individuals aged 13 and older, prompting the company to concentrate its growth efforts on this particular group.
This move comes after the company reported a 15% decline in the fourth-quarter sales.
Recently, Hasbro has introduced a new strategic initiative, ‘Playing to Win,’ which will guide the company through 2027.
With a focus on play-driven engagement and collaborative partnerships, Hasbro aims to increase its reach from over 500 million kids, families, and fans today to more than 750 million by 2027.
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The company projects steady mid-single digit revenue growth and expects an annual improvement of 50-100 basis points in operating profit margin through 2027.
By that time, Hasbro anticipates its operational excellence program will generate $1 billion in gross cost savings, with around half of that contributing directly to its bottom line.
Also, Hasbro is optimistic about the impact of Chinese tariffs on its business, as it shifts manufacturing away from China, according to a report from CNBC.
The report highlighted that during its fourth-quarter earnings call, CFO Gina Goetter outlined the company’s 2025 guidance, which includes adjusted EBITDA of $1.1 billion to $1.15 billion, reflecting tariffs on China, Mexico, and Canada.
The report cited that Hasbro aims to reduce the percentage of toys sourced from China from 50% to below 40% in the next two years.
Price Action: HAS shares are trading higher by 0.73% at $59.73 at last check Friday.
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