The shares of a number of toy companies fell Friday after Hasbro said demand was weaker than expected during the holidays and it announced plans to cut jobs.
Hasbro, who brands include Monopoly and Nerf, said before the market opened that its fourth-quarter revenue would not meet market expectations because of weaker demand. It plans to cut about 10 percent of its workforce and consolidate facilities to reduce expenses.
The company, based in Pawtucket, R.I., has about 5.500 employees worldwide. A 10 percent workforce cut would put about 550 people out of work.
The holiday spending news shouldn't shock investors because the season was expected to be tough. But it did sound an alarm as Hasbro is one of the largest toy companies and competitor Mattel Inc. is scheduled to report its quarterly results next week.
Hasbro shares sank about 3 percent to $37.30 by early afternoon in unusually high-volume trading.
Stifel Nicolaus analyst Drew Crum said short interest for toy stocks rose 4 percent from Dec. 14 to Dec. 31, most notably an 11 percent increase for Hasbro stock. That suggests some investors were betting on the toy company to perform poorly.
Mattel's shares fell 61 cents, nearly 2 percent, to $37.43 by midday on average volume. Its shares remain at the high-end of its 52-week trading range of $28.97 to $38.48. And shares of Jakks Pacific Inc., which makes toys under such brands as Cabbage Patch Kids and Hello Kitty, fell 14 cents to $12.93. That is at the lower end of its 52-week range of $11.83 to $19.39.
