Hasbro Blames Toys 'R' Us Implosion For Sales Plunge


Hasbro, (has) the maker of products like Transformers and My Little Pony, on Monday reported a 16% first quarter drop in its revenues to $716.3 million and warned investors it will keep feeling the aftershocks of Toys "R" Us' ongoing liquidation through the year, though to a lessening degree as the holiday season approaches.

Hasbro HAS, +4.03% reported revenue of $716.3 million, down from $849.7 million previous year and below the $816.0 million FactSet consensus.

Hasbro, which posted revenue for the first quarter that was close to $100 million less than forecast, said it was on track to reach its goal of between $600 million and $700 million of operating cash flow in 2018. Analysts had estimated $821.2 million on average. A year earlier the Pawtucket, Rhode Island, company made $68.6 million, or 54 cents per share. The Toy store underwent liquidation in the quarter a move that has affected its operations in key markets.

The demise of Toys "R" Us took a toll on Hasbro last quarter, but the toymaker says the worst is behind it. The management expects the company to bounce back to growth in 2019, having issued impressive operating margin figures for the full year.

"The Hasbro teams executed extremely well during a challenging first quarter", said Brian Goldner, Hasbro's chairman and CEO.

"Hasbro brands are resonating with consumers, and consumer takeaway is positive".

The retailer - one of Hasbro's largest customers - filed for bankruptcy in September, had a awful fourth quarter and then announced the liquidation of several divisions. The company has already scheduled a $0.63 dividend payment to be paid to shareholders on May 15, 2018.

The toy maker swung to a loss of $112.5 million, or 90 cents per share. The company still has about $19.2 million remaining in its current share repurchase authorization. "The quarter's revenue and profits were negatively impacted by lower revenues and higher expenses associated with events that do not reflect the health of our underlying business".

Hasbro, which has placed focus on media content to support its toys through its partnership with Marvel and Disney, said that it supports six major films released in 2018 including Black Panther, Deadpool 2 and Avengers: Infinity War.