Hasbro Addresses Impact of the Coronavirus

Hasbro had good news for investors during today’s fourth-quarter 2019 earnings conference call. High sales from Frozen 2 and Star Wars toys helped offset the cost of trade tariffs, Magic: The Gathering Arena is making a splash in the esports market with plans to move into the mobile marketing being revealed soon. The recent purchase of the Power Rangers franchise has lots of potential and Dungeons & Dragons remains a strong brand. But that outbreak of the coronavirus in China, where Hasbro produces many of its products, could cause problems for the company later this year. Hasbro’s vice president of investor relations Debbie Hancock commented on the impact of the coronavirus outbreak during today’s earnings call.

‘Our thoughts are with those impacted by the outbreak,” Hancock said. “There is disruption to our supply chain and commercial operations in China as travel is limited and employees and factory workers have been delayed in getting back to work. The impact this has made is small, but it is challenging to quantify the potential magnitude at this time as it will depend on how long it takes to contain the outbreak. If it takes a significant time to control, there could be a larger impact on our business.

“We are rescheduling any china based direct import shipments and production missed during the past week and we're monitoring the situation closely to determine how quickly our manufacturing partners can resume full production levels and catch up on the missed activity. This is a lower revenue and factory production period for us and we're working to protect the flow of goods. We have a cross functional team working to identify and mitigate the impact to Hasbro. We've identified priority items with launch dates in the coming weeks and months as part of our contingency plans and we'll work to recapture any lost productivity in the near term to meet demand throughout the year.”

The impact of the coronavirus is already having ripple effects on the global economy. The spread of the virus has forced China to put restrictions on travel, making it difficult or impossible for some employees to return to work. This has driven up the prices of certain goods that China produces and exports. The death toll from the virus in mainland China has risen to over 1,000, with more than 40,000 infected in that region alone. The international community is taking precautions to prevent the further spread of the virus, leaving 5,000 people stranded on ships at sea.

Photo by Stringer/Anadolu Agency via Getty Images