October 17, 2011 / 11:34 AM / 6 years ago

Weak U.S. sales weigh on Hasbro, shares slip

(Reuters) - Hasbro Inc’s (HAS.O) quarterly results fell short of analysts’ expectations, hurt by a dip in sales in its home market just as the second-largest U.S. toy company gears up for the all important holiday shopping season.

A statue of Hasbro's iconic Mr. Potato Head character is pictured in front of the Company's global corporate headquarters in Pawtucket, Rhode Island, in this picture released to Reuters on October 19, 2009. REUTERS/Hasbro, Inc./Handout

Shares of the company, known for its Nerf foam toys and Transformers action figures, were trading down at $34 before the bell on Monday, after closing at $34.75 on Friday.

However, the company said it was seeing good momentum for its toys at retail and maintained its outlook for “meaningful growth” in revenue and earnings for 2011 over the last year.

“This could be a timing issue affecting the topline in the September quarter and maybe the shipping in October will be greater and make up for any topline erosion in the third quarter,” Sterne, Agee & Leach analyst Margaret Whitfield said.

“September and October are big shipping months so a change from the end of September to the beginning of October can have a big impact on the toy companies.”

Whitfield said the company’s outlook suggests Hasbro would report full year earnings of more than $3 a share which would beat her expectation of $3 a share and Wall Street’s expectation of $2.98 a share.

For the third quarter, Hasbro’s net revenue in the United States and Canada fell 7 percent, hurt by declines in its boys, girls, and games and puzzles categories, while international revenue rose 23 percent.

Hasbro’s domestic performance was in sharp contrast to that of larger rival Mattel Inc (MAT.O), which reported strong U.S. revenue on decade-high sales of Barbie dolls.

    Hasbro earned $171 million, or $1.27 a share, compared with $155.2 million, or $1.09 a share, last year.

    Net revenue rose 5 percent to $1.38 billion.

    Analysts had expected the company to earn $1.30 a share on sales of $1.45 billion, according to Thomson Reuters I/B/E/S.

    Hasbro shares were trading down at $34 before the bell on Monday, after closing at $34.75 on Friday. (Reporting by Abhishek Takle in Bangalore; Editing by Sriraj Kalluvila, Saumyadeb Chakrabarty)

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