Hasbro, Mattel sales get walloped by Toys ‘R’ Us bankruptcy
By Agence France-Presse
Shares of Hasbro tumbled Monday after the toymaker projected lower sales growth than expected in the crucial holiday shopping quarter due to the Toys “R” Us bankruptcy.
Hasbro executives projected fourth-quarter sales growth of between four and seven percent because of the uncertainty surrounding the shopping chain. That was below the 11.5 percent growth that had been expected by analysts.
Shares of Hasbro and rival Mattel, which also fell Monday, have been under pressure since Toys “R” Us filed for bankruptcy protection on September 19.
Hasbro is owed nearly $60 million in unsecured claims by Toys “R” Us, which accounts for about nine percent of Hasbro’s sales.
Hasbro reached an agreement “a few days ago” with Toys “R” Us to establish commercial terms for delivery through the holidays while the retailer works through the bankruptcy process, said Hasbro chief executive Brian Goldner.
“So now, our Toys “R” Us team and the merchants can focus and refocus on the holiday joint business plan with just two months to go,” Goldner said on a conference call with analysts.
“In fact, this wouldn’t have been an issue had it happened earlier in the year, and it’s not an issue for us in 2018,” Goldner added. “We just need to determine what Toys”R” Us can receive over the next few months.”
Hasbro shares sank 9.4 percent to $89 in midday trade. Rival toy giant Mattel dropped 2.7 percent to $15.53.
Hasbro reported third-quarter earnings of $265.6 million, up three percent from the year ago period.
Revenues rose 6.7 percent to $1.8 billion. (AFP)