- Hasbro logged $100 million worth of orders that went unfilled during its third quarter due to shipping supply chain disruptions, including capacity shortages and port congestion.
- The company said in a press release that the majority of those orders were filled early in Q4. Operating profit in Hasbro's consumer products segment, meanwhile, fell 7% year over year in Q3 largely because of shipping constraints and freight costs.
- Revenue gains in the company's entertainment segment "more than overcame" the "small" decline in consumer product shipments, interim CEO Rich Stoddart said in a statement. "Our teams continue to work around the clock to secure transport for our goods to meet the robust demand for Hasbro brands."
Toy makers, among many others, have been navigating a constant cascade of supply chain challenges for most of the year. As retail heads into the holiday season, the stakes get even higher, with many predicting inventory shortages and price hikes across much of the industry.
Shippers have faced both skyrocketing rates and delays as they try to get goods into the U.S. Larger players have more resources and more options to navigate the crisis, but no one can avoid it entirely. Hasbro Chief Financial Officer Deb Thomas said this summer that the company was seeing ocean shipping costs rise fourfold.
For smaller players in the toy space, supply chain bottlenecks threw into chaos what should have been good news: a surge in demand in 2021. "This is one of those years where, for some companies, business can be so good it's bad," Jay Foreman, CEO of the toy maker Basic Fun, told Retail Dive this summer.
As for Hasbro, the company's Safe Harbor statement, boiler plate language meant to warn investors of possible business risks, is littered with references to shipping and supply chain contingencies that were not there a year ago.
And yet the company is large enough, and demand is robust enough, that the company's overall performance has been quite strong, helped along by the turn toward toys during the pandemic. Hasbro's overall revenue rose 11% year over year in Q3, and operating profit was up 9% despite the disruptions.
Major retailers, by and large, have had similar experiences. While they have been paying higher costs for ocean and air shipping, many have been able to offset those expenses through sales gains, strong margins, price hikes and cuts elsewhere in their business. Of course, if not for the shipping delays, profits and revenue at Hasbro and across the retail industry would likely be even higher.
Along with supply chain challenges, Hasbro suffered the loss of its CEO after Brian Goldner died just two days after taking medical leave from the company. Goldner had worked with Hasbro for two decades prior to his death.