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Tue Oct 22, 2019, 10:47 AM

Hasbro Stock Falls Because the Trade War Dragged on Earnings


Hasbro stock (ticker: HAS) tumbled more than 15% on Tuesday morning, after the toymaker’s third-quarter sales and profits missed analysts’ expectations.

The back story. Hasbro shares have been running ahead of the market, up more than 25% year to date, ahead of the S&P 500’s nearly 20% climb over the same period, and well ahead of rival Mattel’s (MAT) 4.5% gain. Hasbro enjoys lucrative licensing from major franchises and has been making acquisitions as well. The company, however, has an outsize exposure to China, which means that tariffs have been a major concern for investors.

What’s new. Early Tuesday, Hasbro said it earned $1.84 a share on revenue of $1.58 billion, while analysts were expecting per-share earnings of $2.17 on revenue of $1.71 billion. Operating margins in the U.S. and Canada slipped to 21.6% from 24.5% in the year-ago quarter, while international margins edged up to 12% from 11.9%. U.S. sales slipped 2% from a year earlier, while international revenues were flat (but up 4% on a constant currency basis).

Looking ahead. Both Hasbro and Mattel were shaken by the Toys “R” Us bankruptcy, and this is one of the first quarters that Hasbro has reported with the major retailer’s bankruptcy in the rearview mirror.

https://www.barrons.com/articles/hasbro-stock-trade-war-dragged-on-earnings-51571755289?

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