Is the toy industry suffering?
The toy industry has been suffering lately with sales slumping even during the prior holiday season. It even missed an industrywide predicted demand increase of 6.5% by 1.5%, which is a considerable margin. However, Hasbro, the number two toy company, has stunned the stock market with a revenue increase of 11.2% and its Disney dolls taking the market by storm. What do you think about Hasbro? Does it offer promise to the declining toy industry? And why do you think toy sales have been down for the past couple of months?
Toys R Us Bankruptcy Hurts Toymakers (Originally Posted: 11/02/2017)
As we all know last month Toys R Us filed for bankruptcy, but planned to continue operating stores. Investors believed that this would cause little impact toymakers during the holiday season.
However, Hasbro and Mattel reported lower than expected sales/revenues recently and losing almost $800 million in market value, both stating the Toys R Us bankruptcy as one of the key factors.
Both toymakers reduced their shipments to Toys R Us in September. Toys R Us is actually planning to exit bankruptcy after reducing its debt.
Mattel's stock fell 17% last Friday after reports of its falling sales from fewer shipments and delays on payments. Hasbro's stock declined 9%, mainly due to uncertainty with Toys R Us and weakness in major markets. The company temporarily paused shipments due to this uncertainty and are working with them as the holiday season approaches. Read more here.
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