Despite upbeat third quarter results for Hasbro, the retailer warned today it's not all fun and games, as it expects to take a hit due to the bankruptcy of Toys 'R' Us.
The US toymaker, which was selling around nine per cent of its total inventory through Toys 'R' Us stores, said third quarter profit rose three per cent, and revenue was up seven per cent to $1.79bn (£1.4bn). That was above analysts' forecasts.
Hasbro's forecast for the fourth quarter however, of a 4-7 per cent rise over last year, was below expectations. It said the revised expectation was "given our new view to the holiday based on Toys 'R' Us and the economic outlook in certain markets".
Net earnings rose three per cent to $265.6m or $2.09 per diluted share, but operating profits fell five per cent in the US and Canada, as Hasbro said it felt the impact from Toys 'R' Us, which filed for bankruptcy last month.
Its franchise brand revenues for the third quarter rose seven per cent to $827.3m, which was bolstered by growth in the likes of My Little Pony and Monopoly.
Hasbro shares dipped on the news.
Brian Goldner, Hasbro's chief executive, said:
As a result of the Toys 'R' Us bankruptcy filing in the US and Canada, there was a negative impact on our quarterly revenues and operating profit.
However, our multi-platform content strategy, combined with an industry leading investment in innovation and an omni-channel commercial approach, is driving strong consumer takeaway heading into the holiday season as consumers engage with Hasbro brands across a multitude of experiences.
The company said despite the quarter presenting "several obstacles", it remained well positioned for the holiday "backed by strong consumer momentum".
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