12:43 PM EDT, 10/24/2024 (MT Newswires) -- Shares of Hasbro ( HAS ) dropped intraday Thursday after the toymaker reported a sharper-than-expected decline in third-quarter revenue and lowered full-year top-line expectations for its largest operating segment.

Revenue slid to $1.28 billion for the three months ended Sept. 29 from $1.5 billion a year ago and missed the $1.3 billion average analyst estimate on Capital IQ. Excluding the eOne divestiture, revenue was down 9%. Shares of Hasbro ( HAS ) fell 6% in midday trade.

In its largest segment by revenue, consumer products, sales tumbled 10% on soft volume. Wizards of the Coast and digital gaming revenue declined 5%. The entertainment segment's revenue tumbled 17% when excluding the eOne divestiture, which Hasbro ( HAS ) said reflected the timing of deal deliveries.

"Toy revenue softness was due in part to our decision to sell less closeout volume in favor of higher profitability, as well as incremental softness in action figures, particularly Star Wars," Chief Executive Chris Cocks said in remarks prepared for the earnings conference call. The company continues to view action figures as a "long-term bet" and is bullish about the segment's "eventual return to growth," he said.

Adjusted earnings per share rose to $1.73 from $1.64 year over year and topped the $1.29 consensus. Profitability was buoyed by a favorable business mix, supply chain productivity and lower operating costs, the company said.

For the full year, Hasbro ( HAS ) now expects consumer products revenue to decline by 12% to 14%, worse than the 7% to 11% decrease it previously predicted. In the third quarter, the pace of the business' decline moderated "significantly" versus the first half, according to Cocks' remarks. That moderation is expected to continue in the fourth quarter, he said.

Revenue for the Wizards of the Coast and digital gaming segment is now expected to be flat to down 1% this year, compared with the company's previous estimate that it would be down 1% to 3%.

Hasbro ( HAS ) reiterated its 2024 adjusted earnings before interest, taxes, depreciation and amortization target of between $975 million and $1.03 billion.

Price: 66.21, Change: -4.13, Percent Change: -5.87