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Hasbro suffers as lack of Disney movies adds to Toys "R" Us woes

Reuters 

By Uday Kumar

(Reuters) - Inc missed estimates for quarterly profit on Friday as the struggled with the collapse of and falling European demand, in a year without a major Disney or a film to bolster sales.

Hasbro's results were in contrast to those of rival Mattel Inc, which on Thursday reported a surprise profit on strong sales of its revamped line of dolls.

Mattel's shares rose 20 percent, while those of were down 5 percent by late morning.

While every major U.S. scrambled to find new avenues to sell toys after the sudden liquidation of the world's largest toy retailer, Hasbro's reliance on toys based on movie franchises compounded its struggles.

"is very reliant on entertainment for success and their Disney licenses - Frozen, and Marvel. In non-movie, non-entertainment years, those brands are not going to sell as well," said Jackie Breyer, at the

The lack of Disney movies last year, for which Hasbro holds key licenses, also drove more pre-teens to dolls in the holiday season, allowing Mattel to take market share away from Hasbro in the dolls category.

added about $134 million to Mattel's sales in 2018 in the absence of direct competition from Hasbro's Disney dolls, Jefferies said.

Hasbro's sales in also took a hit from the bankruptcies of several specialty toy retailers and reduced spending in the ahead of Britain's impending exit from the

Lower inventory levels at European retailers was nearly as impactful as Toys "R" Us' liquidation to Hasbro's overall business, said, adding that the toy and games market in was also shrinking.

BETTING ON DISNEY

Hasbro said it expects to return to revenue and profit growth in 2019, on a slew of new big budget Disney movie releases including "Marvel", "Avengers: End Game" and "Star Wars: Episode IX."

A sequel to "Frozen" is also expected around Thanksgiving, which Hasbro says will boost sales through 2020, which Breyer says could crimp Barbie sales during the holidays.

The company's net revenue fell to $1.39 billion in the fourth quarter ended Dec. 30, while analysts were expecting $1.52 billion, according to IBES data from Refinitiv.

Excluding certain items, the company earned $1.33 per share, below the average estimate of $1.67 per share.

(Reporting by Uday in Bengaluru; Editing by Saumyadeb Chakrabarty)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, February 08 2019. 21:49 IST
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