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Hasbro Beats Q3 Sales Forecast, Sees Solid Holiday Season

Hasbro's iconic Monopoly game, which is increasing seeing growth in online play, helped support a jump in gaming revenues over the third quarter.

Hasbro Inc.  (HAS) - Get Hasbro Inc. Report posted stronger-than-expected third quarter sales Monday as online game revenues jumped higher, with the toymaker forecasting a solid holiday season despite the ongoing coronavirus pandemic. 

Shares traded sharply lower in early Wall Street dealing, however, on comments from management that suggested supply chains could struggle to meet holiday demand amid COVID-triggered shutdowns. 

Hasbro said earnings for the three months ending in September were pegged at $1.61 per share, down 12.5% from the same period last year and 2 cents shy of the Street consensus forecast. Group revenues, however, rose 12.7% to $1.78 billion, topping analysts' estimates of a $1.75 billion tally.

Gaming category revenues, which includes sales of its iconic Monopoly game as well as its collectible digital card came 'Magic: The Gathering', rose 21% to $543.1 million, Hasbro said.

"Hasbro's third quarter performance was the result of great work from our global team and continued growing consumer demand for Hasbro brands in most markets," said CEO Brian Goldner. "Our broad, innovative product line, including leadership in gaming, excellence in global ecomm and compelling marketing campaigns drove meaningfully better performance in the third quarter."

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"Building off this quarter's growth in toys, games and digital we are positioned to deliver a good holiday season. Live-action entertainment production is returning, and we are set to improve deliveries in the fourth quarter with some moving into 2021," he added. "While COVID-19 remains a factor in our global operations, consumers remain engaged in activities that create joy and personal connections and we are working purposefully to deliver them the world's best play and entertainment experiences, while remaining focused on the safety and well-being of our global teams and communities."  

Hasbro shares were marked 8.5% lower in early trading following the earnings release to change hands at $84.13 each, a move that trims the stock's six-month gain to around 9.6%.

Hasbro's solid quarter, however, echoed last week's better-than-expected earnings from rival toymaker Mattel  (MAT) - Get Mattel Inc. Report, which saw a surge in Barbie and Hot Wheels sales that helped overall revenues rise by 10% to a Street-beating $1.63 billion.

Barbie sales, Mattel said, surged 28% to more than $532 million worldwide, while Hot Wheels sales jumped 6.6% to $312.8 million. 

Looking into the final months of the year, Mattel said it sees margin expansion and cost savings to boost both net income and earnings growth while its remains "focused on creating long-term shareholder value.”