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Toys 'R' Us Closures Hurt Hasbro's Q3 Earnings

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Toys 'R' Us Closures Hurt Hasbro's Q3 Earnings

Toy maker Hasbro, Inc. (NASDAQ: HAS) reported Monday its third-quarter results, highlighted by a top-and-bottom-line miss.

What Happened

Hasbro said it earned $1.93 per share in the third quarter on revenue of $1.57 billion. The Street was modeling the company to earn $2.25 per share on revenue of $1.71 billion. Q3 sales of $1.57 billion missed estimates of $1.71 billion.

Net earnings for the quarter fell from $265.6 million in the same quarter a year ago to $263.9 million despite a $17.3 million favorable benefit in the reported quarter from U.S. tax reform.

Why It's Important

Hasbro said its revenue fell 12 percent year-over-year due to:

  • A loss of Toys 'R' Us revenue.
  • Certain geographic regions experienced "changing consumer shopping behaviors."
  • A changing retail landscape.
  • Clearing through retail inventory.
  • A negative impact of $32 million from foreign exchange changes.

Hasbro said woes it experienced in the third quarter due to a large number of product liquidated at Toys 'R' Us represents a near-term impact. The company is managing retail inventory which was down notably in the U.S. and Europe and comes ahead of a large number of retailers looking to win market share in the toy market this holiday season.

What's Next

Management continues to make large changes to its organization to ensure it is well positioned for the future. Backed by $907 million in cash and quality inventory ahead of the holiday season, the company is confident the strength of its brand can result in profitable growth for years to come.

The stock was down 7 percent to $91.10 in Monday's pre-market session.

Related Links:

4 Reasons Why Hasbro Was Downgraded By BMO

MKM Partners: After Toys 'R' Us Struggles, Hasbro Poised For Strong 2019

Posted-In: retailers Toys Toys 'R' UsEarnings News Movers Trading Ideas Best of Benzinga

 

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