The definition of a company with pricing power is one that can put up prices without causing a drop in customer demand. Toy maker Hasbro (HAS:NASDAQ) doesn’t make the cut as its price hikes have weakened demand, leading it to miss its latest quarterly earnings estimates.

Consumers are looking for bargains in the current economic climate which means shops are relying on promotions to shift products and are ordering less stock from suppliers.

That explains Hasbro’s recent share price weakness, yet its stock has been in decline all year, down 39% so far. In June, the company fought off pressure from activist investor Alta Fox who wanted to shake up the board and split up the business.

Over the years Hasbro has leaned heavily on its toy brands including Transformers to create TV and films. It bought Peppa Pig brand owner and production conglomerate Entertainment One in 2019 for $3.8 billion to get an even bigger foothold in Hollywood.

In October, Hasbro announced a new strategy to focus on its biggest brands and franchises only, suggesting it could offload some assets. So far, the market hasn’t got excited about the plans with the shares down at levels not seen since the global Covid-induced market sell-off in March 2020.

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