Skip to main content

Market Overview

What Toys R Us Store Closures Could Mean For Mattel, Hasbro

What Toys R Us Store Closures Could Mean For Mattel, Hasbro

Toy investors have plenty of reasons to be nervous about their investments, including a reduction in store footprints, mostly from Toys R Us closures.

The Analyst

UBS' Arpine Kocharyan.

The Thesis

Toy investors continue to face significant uncertainty as Toys R Us has consistently been an important partner for the toymakers, Kocharyan said in a note. (See the analyst's track record here.) 

Under a "bear case" scenario, the retailer could reduce its store count by over 40 to 50 percent, but a "worst-case" scenario would see the closure of 63 percent, or 556, stores, Kocharyan said. A more favorable "base case" scenario would involve the closure of 21 percent of Toys R Us stores, he said. 

Impact To Mattel and Hasbro

If Toys R Us closes 21 percent of its stores, the sales impact would be negative 1.3 percent for Mattel, Inc. (NASDAQ: MAT) and negative 1.1 percent for Hasbro, Inc. (NASDAQ: HAS) in fiscal 2018, the analyst said. Under the worst-case scenario, Mattel would see a 4-percent negative sales impact and a negative 3-to-4-percent sales impact for Hasbro.

"While 21 percent of store count reduction for TRU is not as bad as bears would fear, low single digit sales impact for MAT/HAS is not necessarily priced in yet," Kocharyan said. 

Department stores, including Target Corporation (NYSE: TGT) and Wal-Mart Stores Inc (NYSE: WMT), are well-positioned to take market share as Toys R Us stores continue to close, according to UBS. A total of 630 Toys R Us stores are located within a 15-minute drive of a Target store, and Wal-Mart has a similar positioning.

Price Action

Shares of Mattel have lost more than 45 percent since the start of 2017, while shares of Hasbro are up 17 percent over the same time period.

Related Links:

Mattel's Bad Holiday Guidance Plunges Credit Rating To 'Junk'

There's Rationale For A Hasbro And Mattel Deal

Photo from Wikimedia. 

Latest Ratings for HAS

Apr 2021KeybancMaintainsOverweight
Apr 2021JefferiesMaintainsBuy
Apr 2021DA DavidsonMaintainsBuy

View More Analyst Ratings for HAS
View the Latest Analyst Ratings


Related Articles (HAS + MAT)

View Comments and Join the Discussion!

Posted-In: Arpine Kocharyan toy stores Toymakers Toys Toys R US UBSAnalyst Color Analyst Ratings Best of Benzinga

Latest Ratings

APENLake StreetInitiates Coverage On12.0
PATHMacquarieInitiates Coverage On69.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at