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Hasbro Q4 Guidance Drags Down Toy Industry, Toys"R"Us To Blame
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Hasbro (HAS - Free Report) reported third-quarter earnings and revenues that beat Wall Street estimates on Monday morning, but the toy maker’s updated guidance for the coming quarter helped send its shares tumbling, taking Mattel (MAT - Free Report) along with it.
Hasbro’s revenues popped 7% to hit $1.79 billion, while its earnings jumped 3%. Yet, the year-over-year gains were ignored because of the company’s new, lowered fourth-quarter guidance, which cited negative industry trends as a major reason for its downward forecast (also read: Hasbro (HAS - Free Report) Beats on Q3 Earnings & Revenues).
“As a result of the Toys“R”Us bankruptcy filing in the U.S. and Canada, there was a negative impact on our quarterly revenues and operating profit,” Hasbro’s CEO Brian Goldner said in a statement.
Hasbro noted that the recent collapse of one of the largest big-box toy retailers is expected to negatively impact its vitally important holiday quarter, after already suppressing potentially larger third-quarter gains.
The company had been selling roughly 9% of its total inventory at the chain. The Toys“R”Us bankruptcy filing could also leave Hasbro on the hook for nearly $60 million in unsecured payments.
Despite Hasbro’s lowered expectations, the company still expects for its fourth-quarter revenues to increase by 4% to 7%. But investors are worried because previous Wall Street estimates for Hasbro’s holiday quarter projected a gain of as much as 11.68%.
“We are well positioned for the holiday, including good quality inventory at Hasbro and at retail, backed by strong consumer momentum,” CFO Deborah Thomas said in a statement. “We continue to work closely with Toys“R”Us as we head into the holiday period.”
Hasbro’s stock had gained over 26% since the start of the year, which almost doubled the S&P 500. However, in the last 12-weeks, the company’s stock price has fallen almost 8%, which likely priced in fears of the now official Toys“R”Us-based fourth-quarter forecast.
Shares of Hasbro sunk over 8.50% Monday morning to hit their lowest point since February.
Hasbro’s new suppressed holiday quarter guidance, based in large part on negative overall industry trends, caused shares of fellow toy making power Mattel to fall.
Shares of Mattel dipped over 3.50% and now rest close to their 52-week low. Mattel is currently a Zacks Rank #5 (Strong Sell) and is set to report its quarterly earnings on Oct. 26.
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Hasbro Q4 Guidance Drags Down Toy Industry, Toys"R"Us To Blame
Hasbro (HAS - Free Report) reported third-quarter earnings and revenues that beat Wall Street estimates on Monday morning, but the toy maker’s updated guidance for the coming quarter helped send its shares tumbling, taking Mattel (MAT - Free Report) along with it.
Hasbro’s revenues popped 7% to hit $1.79 billion, while its earnings jumped 3%. Yet, the year-over-year gains were ignored because of the company’s new, lowered fourth-quarter guidance, which cited negative industry trends as a major reason for its downward forecast (also read: Hasbro (HAS - Free Report) Beats on Q3 Earnings & Revenues).
“As a result of the Toys“R”Us bankruptcy filing in the U.S. and Canada, there was a negative impact on our quarterly revenues and operating profit,” Hasbro’s CEO Brian Goldner said in a statement.
Hasbro noted that the recent collapse of one of the largest big-box toy retailers is expected to negatively impact its vitally important holiday quarter, after already suppressing potentially larger third-quarter gains.
The company had been selling roughly 9% of its total inventory at the chain. The Toys“R”Us bankruptcy filing could also leave Hasbro on the hook for nearly $60 million in unsecured payments.
Despite Hasbro’s lowered expectations, the company still expects for its fourth-quarter revenues to increase by 4% to 7%. But investors are worried because previous Wall Street estimates for Hasbro’s holiday quarter projected a gain of as much as 11.68%.
“We are well positioned for the holiday, including good quality inventory at Hasbro and at retail, backed by strong consumer momentum,” CFO Deborah Thomas said in a statement. “We continue to work closely with Toys“R”Us as we head into the holiday period.”
Hasbro’s stock had gained over 26% since the start of the year, which almost doubled the S&P 500. However, in the last 12-weeks, the company’s stock price has fallen almost 8%, which likely priced in fears of the now official Toys“R”Us-based fourth-quarter forecast.
Shares of Hasbro sunk over 8.50% Monday morning to hit their lowest point since February.
Hasbro’s new suppressed holiday quarter guidance, based in large part on negative overall industry trends, caused shares of fellow toy making power Mattel to fall.
Shares of Mattel dipped over 3.50% and now rest close to their 52-week low. Mattel is currently a Zacks Rank #5 (Strong Sell) and is set to report its quarterly earnings on Oct. 26.
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Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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