After a disappointing second-quarter earnings report, Hasbro (HAS 12.04%) is bouncing back sharply in the third, posting revenue and profit gains that beat analyst expectations.
Arguably more important is the toymaker exhibiting strength just in time for the Christmas shopping season.
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Every day is Christmas
Hasbro said sales grew 13% to $1.78 billion, ahead of the $1.74 billion Wall Street was expecting, while earnings of $213 million, or adjusted to $1.88 per share, easily beat forecasts of $1.63 per share.
The toymaker ended the quarter with $1.13 billion in cash in the bank and produced operating cash flows of nearly half a billion. CEO Brian Goldner says consumer demand is "quite strong," which ought to serve it well now that the holiday shopping season has begun.
While the shopping season is earlier than usual, there is a lot of pent up consumer spending waiting to be unleashed. Amazon got the ball rolling earlier this month with its two-day Prime Day shopping extravaganza. Others joined in, such as Walmart, which said it was having Black Friday deals every weekend until Christmas. Amazon is currently holding a new Holiday Dash sales event.
Goldner said in a statement, "Building off this quarter's growth in toys, games and digital we are positioned to deliver a good holiday season."
It hadn't always looked like that was possible after Hasbro disappointed investors last quarter by broadly underperforming analyst expectations. Considering the lockdowns and stay-at-home orders in effect due to the pandemic, Wall Street was expecting bigger numbers that didn't materialize.
That's turned around now, but the stock still tumbled as rival Mattel put up better numbers once again.
