Reuters
- The Toys R US bankruptcy is going to impact holiday sales, Hasbro says.
- Hasbro estimates fourth quarter revenue will come in at $1.7 billion to $1.74 billion, missing Wall Street expectations.
(Reuters) - The bankruptcy of Toys'R'Us weakened Hasbro Inc's forecasts for the holiday season in otherwise strong third-quarter results on Monday, boding ill for a sector worried by the collapse of a major customer.
The Amazon-fueled move away from brick-and-mortar retailing was behind the surprise filing last month by Toys'R'Us, which left Hasbro exposed to the tune of $60 million in unsecured claims for payment.
The U.S. toymaker, which was selling about 9 percent of its total inventory through Toys'R'Us stores, said third-quarter profit rose 3 percent and revenue 7 percent - above analysts' estimates - even as the bankruptcy began to hurt operations.
Hasbro's estimate for the fourth quarter of an increase of 4 to 7 percent over last year's $1.63 billion, however, was below Wall Street expectations.
"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 Chief Executive Brian Goldner said in a statement.
"We continue to work closely with Toys'R'Us as we head into the holiday period."
The fourth-quarter growth estimates translate to revenue of $1.7 billion to $1.74 billion, below the average analyst estimate of $1.82 billion, according to Thomson Reuters I/B/E/S.
Toys'R'Us, the largest toy
Smaller rival Jakks Pacific Inc had also said in September it would post a loss in 2017 due to charges related to the bankruptcy.
Hasbro reported a profit of $265.6 million, or $2.09 per share, for the third quarter and revenue of $1.79 billion, helped by strong demand for games such as Monopoly and Magic: The Gathering and My Little Pony toys.
Analysts on average had expected sales of $1.78 billion and a profit of $1.94 per share. (Reporting by Gayathree Ganesan; editing by Saumyadeb Chakrabarty)