Hasbro Counting on Price Hikes to Offset Costs

Published on 02-11-2011 02:53 PM

3 Comments

Attachment 24522Hasbro Inc, the No. 2 U.S. toy company, is counting on price increases to combat rising costs of commodities, freight and labor.

The company, which hiked prices by mid-single digits this month, said it will monitor the cost environment closely to see if it has to raise prices again before fall, CFO Deborah Thomas told investors ahead of the toy fair in New York.

Larger rival Mattel Inc on Feb. 2 also said rising costs of oil and Chinese labor would entail price increases in 2011.

Manufacturers of everything from food to soap to appliances are grappling with rising costs of metals, plastics, packaging paper and labor costs in manufacturing hubs such as China. Many are raising prices to pass the costs to customers, but industry experts worry if the price hikes will stick in a slowly recovering economy.

Hasbro, the maker of Nerf foam toys and Monopoly board games, is planning for labor rates to rise in the mid-teens in 2011. However it does not see overall costs rising as much as they did last year.

Hasbro missed sales estimates in the key fourth quarter on tepid U.S. demand for games and puzzles. The company has forecast a rise in sales and profits in 2011 citing a strong entertainment lineup for 2011, including toys modeled after the movie "Transformers -- Dark of the Moon."

Its shares were down 0.5 percent or 22 cents at $45.47 on Friday morning on Nasdaq. (Reporting by Dhanya Skariachan; Editing by Phil Berlowitz)

Source: Reuters

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3 Comments

JediTricks - 02-11-2011
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"Sales are down, so how do we combat? Raise prices!"

That is one business decision I've never agreed with. Look at Sideshow, they've been doing that for years now and every figure gets more expensive and more exclusive to try to offset how expensive they are. It's a downward spiral, to offset you charge more, but when you charge more your sales dry up, so to offset the weakened sales you charge more, rinse, lather, repeat.

Pushing $9 a pop for TVC figures and $8 for CW at my local stores is making this hobby difficult to continue in. The figures just aren't worth it anymore, too many repetitive rehashes that don't address the biggest issues (like no good Han Solo figures, or figures that can't stand not having ankle articulation, or lack of accessories).

El Chuxter - 02-11-2011
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It's even worse if you collect multiple Hasbro lines. They're making me be more selective. Collecting hasn't hit the "hardship" point, but it's definitely expensive enough where the entire "impulse buy" aspect is gone.

JediTricks - 02-11-2011
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Originally Posted by El Chuxter

It's even worse if you collect multiple Hasbro lines. They're making me be more selective. Collecting hasn't hit the "hardship" point, but it's definitely expensive enough where the entire "impulse buy" aspect is gone.

So true. I also collect Transformers, and the basic figures are now up to $10 at most stores, while those same stores are selling deluxe figures for sometimes $9 simply to sell through the most popular product faster. But where I'd be more free to buy basics I wasn't sure about, now I'm selective, and that subconsciously seems to be slowing my Deluxe purchases even when they're lower price.