Hasbro Sinks After Missing on Top and Bottom Line

Toy maker Hasbro reported third quarter earnings that did not thrill Wall Street at all.

The company’s earnings missed on both the top and bottom line with U.S retail inventories down 17%. Net revenue was down 12 percent from last year at $1.57 billion while analysts were waiting for $1.71 billion.

Hasbro’s CEO Brian Goldner said, “We were unable to meet all of the demand within the quarter.”

“These are real retailer reductions across our business and then certainly Toys R Us has some impact,” said the CEO.

The company is expecting to add a warehouse in the Midwest to help meet demand and shorten delivery time. Golder said, “By mid-2019, we’ll add a Midwest warehouse to better meet demand, shorten delivery time, and reduce trucking mileage to our retailers’ distribution centers. We’re also working closely with our retailers in new, innovative ways, including sharing warehouse space to dramatically reduce delivery times.”

Goldner also said on the earnings call, “Just over one year ago, Toys “R” Us filed for Chapter 11 bankruptcy and put into motion a process which ultimately resulted in the rapid closing of most of their stores including all stores in the US, UK, and Australia and transitioning to new owners in select markets. In certain markets, this transition is ongoing. We continue to believe this is a near-term retail disruption that will last for the next few quarters. Our established and differentiated brand blueprint strategy has enabled us to transform. And we’ve invested in industry-leading, brand-building capabilities. To best position our company for profitable future growth, we need to continuously drive new ways of competing.”

Hasbro recently said it would be trimming less than 10 percent of its workforce as part of “meaningful organizational changes” to continue its “ongoing transformation.”

“While some of these changes are difficult, we must ensure we have the right teams in place with the right capabilities to lead the company into the future,” the company said.

Disclaimer: We have no position in Hasbro, Inc. (NASDAQ: HAS) and have not been compensated for this article.