"We continue to work closely with Toys "R" Us as we head into the holiday period", Goldner added. It also points out that the economic outlook in certain markets may harm its earnings for the fourth quarter of the year.
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 anxious by the collapse of a major customer.
Hasbro's estimate for the fourth quarter of an increase of 4 to 7 per cent over last year's US$1.63 billion, however, was below Wall Street expectations.
Net earnings rose three per cent to $265.6m or $2.09 per diluted share, but operating profits fell five per cent in the U.S. and Canada, as Hasbro said it felt the impact from Toys "R" Us, which filed for bankruptcy last month.
Looking ahead, HAS forecast Q4 revenues to rise between 4% and 7%, implying sales of $1.69 to $1.74 billion. This had it beating out analysts' earnings per share and revenue estimates of $1.94 and $1.78 billion for the quarter, but it wasn't enough to save HAS stock. "Our Brand Blueprint strategy is successfully driving the business despite a challenging economic environment in the United Kingdom and Brazil, as well as a short-term retailer disruption".
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Hasbro, Inc. reported earnings per share of $2.09 on revenue of $1.79 billion for the third quarter of the year. Emerging markets revenues increased 8 percent in the quarter.
In premarket deals Hasbro shares were down 2.5% at US$95.75. It now expects revenue for the quarter to be up by 4% to 7% when compared to the same time a year ago.
Operating profit in that unit increased 20%, to $16.9 million, or 28.9% of net revenue, compared to $14.1 million, or 25.1% of net revenue, in 2016. These worldwide revenues include a favorable US$27.9 million impact from foreign exchange.
Partner Brand revenues decreased 2 percent mainly due to declines in certain brands, including YO-KAI WATCH as well as DREAMWORKS' TROLL, and weakness in global region. On a regional basis, revenue was up in Europe (3%), Latin America (13%) and Asia Pacific (17%).