Feb 8 (Reuters) – Toymaker Hasbro Inc missed estimates for quarterly profit on Friday as the absence of a major Disney movie release compounded its struggles to recover sales lost from the collapse of retailer Toys “R” Us, sending its shares down 10 percent.
Sales at every major U.S. toy maker suffered last year as the sudden bankruptcy and liquidation of the world’s largest standalone toy retailer left the industry in a scramble to find new avenues to sell their toys.
“We were not … able to recapture as much of the Toys “R” Us business during the holiday period as we anticipated as the effect of its liquidated inventory in the market was more impactful than we and industry experts expected,” Chief Executive Officer Brian Goldner said.
Overall U.S. toy retail sales fell 2 percent in 2018, after four straight years of growth, according to market research firm NPD Group.
Rival Mattel Inc reported a steeper-than-expected fall in gross sales in North America on Thursday, also due to the shuttering of Toys ‘R’ Us, but its overall holiday sales rose thanks to a revamped line of Barbie dolls.
Barbie’s success was also due in part to the absence of a Disney Princess film in 2018, the license to which Hasbro holds.
Net revenue in Harbro’s Partner Brands division, which makes Disney dolls and Star Wars action figures, fell 20 percent in the quarter.
Hasbro’s reliance on selling toys based on big movie franchises has grown over the years as kids increasingly prefer watching Hollywood blockbusters than playing with decades old toy properties.
The company’s net revenue fell to $1.39 billion in the fourth quarter ended Dec. 30 from $1.6 billion a year earlier, while analysts were expecting $1.52 billion, according to IBES data from Refinitiv.
Hasbro also said revenue took a hit from weak demand in the UK.
The company reported net income of $8.8 million, or 7 cents per share, compared with a loss of $5.3 million, or 4 cents per share, a year earlier, when it took a one-time charge related to changes in U.S. tax laws.
Excluding certain items, the company earned $1.33 per share, below the average analyst estimate of $1.67 per share. (Reporting by Uday Sampath in Bengaluru Editing by Saumyadeb Chakrabarty)
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