Hasbro fleeing China as tariffs bite
Hasbro is feeling the pain of the trade war.
The toymaker reported third-quarter profit below Wall Street estimates as tariffs drove up shipping and warehousing costs, sending shares sharply lower.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| HAS | HASBRO INC. | 62.21 | -0.85 | -1.35% |
“The threat and implementation of tariffs negatively impacted our quarterly results,” chairman and CEO Brian Goldner said on an earnings call. “For the third quarter, U.S. point of sale declined slightly, and retailers continued to lower inventory.”
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Hasbro earned $212.9 million, or $1.67 a share, as revenue was $1.58 billion, little changed from a year ago. Excluding some items, earnings were $1.84 a share. Wall Street analysts surveyed by Refinitiv were expecting earnings per share of $2.21 on revenue of $1.72 billion.
The company said the 10 percent tariffs that will go into effect on goods made in China on Dec. 15 will be passed along to the consumer. Hasbro has been working hard to move its supply chain out of China in order to avoid the tariffs.
“Our teams are actively moving our strategic sourcing footprint and are on track to achieve our target of sourcing 50% for the U.S. out of China by year-end 2020,” Goldner said.
“We are having good success identifying and building products in geographies, including Vietnam, India and others. Importantly, as a reminder, we are also sourcing 20% of our U.S. business from the U.S.”
On the company's second-quarter earnings call, Goldner said that 67 percent of the products that Hasbro sells come from China.
"We do view this tariff environment as short term in nature and certainly disruptive," Goldner said Tuesday. "But we also view 2020 -- 2019 holiday and 2020 as an opportunity to grow our business."
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Hasbro shares were up 47.8 percent this year through Monday.