The third quarter earnings season rolls into high gear in the coming week and toy company Hasbro will be among the luminaries getting things started on Monday.
Hasbro Third Quarter Earnings Report (Monday, October 23, before the open)
- Why it's important
- Hasbro is one of the world's largest toy and game companies, so it has unique perspective on demand dynamics in the toy category
- Hasbro derives nearly 50% of its revenue outside the U.S., so it will offer another reference point for market participants aiming to get a feel for the impact of foreign exchange on earnings prospects for U.S. multinationals
- The Toys 'R Us bankruptcy filing created a lot of questions for investors in toy companies and they will be seeking answers from Hasbro on what impact that filing will have on its sales and cash flow prospects
- Note: Toys 'R Us comprised 9% of Hasbro's 2016 net revenues
- Hasbro counts Marvel, Star Wars, and Disney Princess among its partner brands, so investors will be eager to hear how Hasbro expects to capitalize on licensed brands, particularly with the upcoming release of the new Star Wars movie
- HAS has dropped sharply (-17%) since the company's second quarter report in July, which triggered downward earnings revisions tied in part to concerns about partner brand sales, third quarter sales prospects, and margin pressure. Investors will be assessing if Hasbro is facing temporary problems or potentially something that is longer lasting.
- A closer look
- What's in play?
- Related companies
- Mattel (MAT)
- JAKKS Pacific (JAKK)
- Major customers
- Wal-Mart (WMT)... 18% of Hasbro's 2016 net revenues
- Target (TGT)... 9% of Hasbro's 2015 net revenues
- Consumer Discretionary Select Sector SPDR (XLY)