After failing to meet Wall Street’s expectations, Hasbro blamed the Toys R Us bankruptcy for a drop in revenues in the first quarter. But the toymaker said the collapse of one of its largest customers would impact the company less after the first half of the year, Reuters reported.
“We anticipate the revenue impact will be most pronounced in the first half of the year with a lesser impact in the third and fourth quarters, including the important holiday season,” said Hasbro Chief Executive Officer Brian Goldner.
Hasbro’s first quarter revenue fell almost $100 million short of forecasts, but the toymaker said the company is on its way to meet the goal of bringing in between $600 million and $700 million in operating cash flow in 2018. Still, the company recorded its first earnings miss in two years during the first quarter, with profits 23 cents per share less than expected per Thomson Reuters I/B/E/S.
The news comes as lawyers and advisers for Toys R Us have reportedly turned down a last-minute bid for the retailer’s U.S. stores from toy-company founder Isaac Larian because his offer didn’t meet the threshold set by the court. But Larian, founder of MGA Entertainment, said on Tuesday (April 17) that he hadn’t been formally notified that the bid wasn’t qualified, The Wall Street Journal (WSJ) reported.
“If that’s the case, it’s really a shame that they’re going to let this company go into liquidation instead of at least responding and saying we need more or we need this,” Larian had told WSJ.
Larian had made an offer of $675 million for the Toys R Us stores in the U.S. In addition, he bid $215 million for the retailer’s operations in Canada. Advisers and lawyers for Toys R Us are still reportedly looking at bids for the retailer’s business in Canada.
The retailer has over 700 remaining locations in the U.S., including those under the Babies R Us banner. If completed, the company’s liquidation would be among the largest in retail history since Sports Authority closed nearly 500 stores, WSJ reported.