What's going on?

Toymaker Hasbro gave a disappointing outlook on Thursday, and investors decided the firm�s a problem child.

What does this mean?

Hasbro�s preliminary results update last month showed that demand for its toys dropped off a cliff last quarter � so the firm decided to run a tighter ship and lay off 15% of its workforce. But if anyone was actually reassured by that move, this week�s outlook set them straight: the owner of My Little Pony and Monopoly released an annual forecast that was way below analysts� expectations. And it�s not hard to see why: after all, retailers will probably continue to play it safe with orders after overstocking last year. And lately Hasbro’s lost some important licenses � like the Disney Princess range poached by rival Mattel � which could dent profit big-time. Obviously that wasn�t the bedtime story investors wanted, and they sent Hasbro’s shares tumbling.

Why should I care?

Zooming in: Life in plastic.
Kids are really annoying when they cry, which means that demand for toys typically withstands the most Herculean economic hardships. But not this earnings season. Mattel gave a weak outlook of its own earlier this month, and now it�s ransacking its iconic back catalog to try and woo consumers with old favorites. The firm announced earlier this week that Barney � the famous TV dinosaur � will be back on the airwaves and store shelves before long. And that’s not to mention this year’s hotly anticipated Barbie movie.

The bigger picture: Workers beware.
Another day, another layoff announcement � and Hasbro’s bout of job-slashing shows that’s not just confined to tech. In fact, S&P 500 companies’ profits fell for the first time since 2020 this earnings season, a sign there could be more cuts to come. That’s the way the wind seems to be blowing anyway: a recent business survey showed that more respondents expect payrolls to fall than rise over the coming months � the first time that’s been the case for two years.