Hasbro Sales Beat The Street On Board Games Demand; Shares Drop 7%

Hasbro’s quarterly sales outperformed analysts’ expectations driven by demand for its board games and toys as the coronavirus pandemic-led restrictions kept more families at home.

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Hasbro (HAS), which owns popular branding games like Monopoly, Scrabble and Jenga, said that net revenue increased 12.8% to $1.78 billion in the three months ended Sept. 27, surpassing the Street consensus of $1.75 billion. Net earnings attributable to the company advanced 3.7% to $220.9 million from a year earlier. Hasbro reported adjusted EPS of $1.88 per share, exceeding analysts’ estimates of $1.63 per share.

However, shares are declining 8% in Monday’s morning trading as pandemic-led production delays pushed Hasbro’s sales from its TV, film and entertainment division down 28%. In addition, the company suffered a 8% revenue drop in its international business, primarily driven by declines in Latin America.

“Hasbro’s third quarter performance was the result of continued growing consumer demand for Hasbro brands in most markets,” said Hasbro CEO Brian Goldner. “Building off this quarter’s growth in toys, games and digital we are positioned to deliver a good holiday season. Live-action entertainment production is returning, and we are set to improve deliveries in the fourth quarter with some moving into 2021.”

Goldner added that COVID-19 remained a factor in our global operations. Shares in Hasbro have jumped more than 11% over the past month but are still down 19% on a year-to date basis. That’s with a Strong Buy analyst consensus boasting 7 Buy ratings versus only 1 Hold rating. (See HAS stock analysis on TipRanks)

Meanwhile the 12-month average analyst price target of $94.43 reflects upside potential of 13%.

Earlier this month, MKM Partners analyst Eric Handler raised the stock’s price target to $104 from $90 and maintained a Buy rating saying that Q3 results should reflect “solid shipment activity” into retail outlets and the holiday season should also be “optimistic” as shelf space devoted to toys at bricks-and-mortar stores has been expanding.