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A statue of Mr. Potato Head greets visitors to the corporate headquarters of toymaker Hasbro Inc. in Pawtucket, Rhode Island.
It’s been more than a year since Toys R Us filed for bankruptcy and toy maker Hasbro is still struggling with the fallout.
Shares of the toy company were down about 7 percent Monday, after Hasbro’s earnings missed on the top and bottom line and company executives detailed inventory issues in the third quarter.
As retailers rushed in to fill the void left behind by Toys R Us, Hasbro is dealing with a slew of new partners, however, these companies have been waiting to place toys on shelves until closer to the holiday season. Therefore, there was a high demand for toys and games late in the third quarter that Hasbro was unable to meet, the company said Monday.
Previously, Toys R Us would take on inventory earlier in the holiday season.
“We were unable to meet all of the demand within the quarter,” CEO Brian Goldner said on an earnings conference call. “As a result approximately $50 million of U.S. third-quarter orders shipped in the first week of the fourth quarter.”
The company said that retail inventories in the U.S. are down 17 percent.
“These are real retailer reductions across our business and then certainly Toys R Us has some impact,” Goldner said.
Hasbro expects to add a warehouse in the Midwest to help meet this demand and shorten delivery time. Debbie Hancock, vice president of investor relations for Hasbro, said the company has seen higher shipping costs in the U.S. because of new trucking regulations and a shortage of drivers.
“So as we go through these transitions our underlying business is quite strong. Our brands are good. Consumers are very excited about what we’re doing,” Goldner said. “It’s just that again we’ve got to get through the disruption of the Toys R Us business and as, I mentioned, Toys R Us was largest for us in Q3 last year, followed by Q4.”
