Hasbro’s shares dwindled on Monday after the US Toymaker company revealed a lower-than-expected sales growth under the effect of the recent bankruptcy of Toys “R” Us during the holiday shopping quarter.

Executives of Hasbro have recently announced the fourth quarter results of the toy company. Along with that, the company revealed the sales growth numbers for the quarter which was around 4-7% due to the uncertainties within the toy-making industry. Hasbro missed the estimated data of 11.5% growth rate.

Toys “R” Us filed bankruptcy protection back on the 19th of September this year

Mattel, Hasbro’s rival company, also experienced a decline on Monday. The company also has faced pressures as the Toys “R” Us filed bankruptcy protection back on the 19th of September this year.

Hasbro has an outstanding amount approximately US$60 million in unsecured claims owed to the company by Toys “R” Us. Also, such amount accounts for around nine percent of sales of Hasbro.

“So now, our Toys “R” Us team and the merchants can focus and refocus on the holiday joint business plan with just two months to go,” Chief Executive Brian Goldner recently told reports.

Also according to Goldner, the company has done an agreement “a few days ago” with Toys “R” Us to further institute a commercial tenure for distribution throughout the upcoming holiday season as the toy retailer works on its bankruptcy process.

“In fact, this wouldn’t have been an issue had it happened earlier in the year, and it’s not an issue for us in 2018,” Goldner stated. “We just need to determine what Toys “R” Us can receive over the next few months.”

Earnings Report

Hasbro announced its third-quarter earnings valuing around US$265.6 million, which is a 3% increase from the data posted in the similar period of last year. Also, the Earnings per share of $2.09 exceed the market estimate of $1.93.

In another earnings beat, Revenues added a 6.7% to US$1.8 billion beating the estimated prediction of $1.7 million.

Trading Performance

Despite the upbeat earnings report, shares of Hasbro experienced a sharp decline during the release of the said report. It declined by at least -8.60% while finishing at the close of 89.75.

As for its Relative Strength Index, it was last found at 27.75 making the toy stock oversold over such performance.

Lastly, its Coppock Curve has entered the negative region as well. At -3.02, a recommended sell would be advised. However, with upbeat earnings – it is possible that the stock can rebound specially after such dramatic moment.  

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