Hasbro points to Toys R Us' demise in announcing layoffs
Hit by the demise of Toys R Us, Hasbro on Monday said it would shed a portion of its workforce amid a drop in sales.
Hasbro reported that its third-quarter revenue fell to $1.5 billion, from $1.7 billion for the year-ago period, while sales sank 12 percent.
"Our third-quarter results reflect loss of Toys R Us revenues in the U.S., Europe and Asia-Pacific," CEO Brian Goldner said in a call with analysts, adding that the toy chain's ongoing liquidation "is clearly visible" in Hasbro's latest financial results.
Hasbro did not specify how many of its 5,400 workers around the globe -- just over half of whom work in the U.S. -- would be let go, but Goldner said the figure would be in the "mid-single" digits.
It expects to spend as much as $60 million on severance and related costs in the fourth quarter, with cash payments to be made starting this month and extending through next year.
The results disappointed investors, with Hasbro shares down 5 percent in morning trade.
In the earnings call, Hasbro executives said the company had recaptured a third of the revenue it generated from selling products at Toys R Us stores as it heads into the critical holiday shopping season.
"We're positioned for a successful holiday period and to move beyond Toys R Us in 2019," Chief Financial Official Deborah Thomas said.
Hasbro's plans to issue pink slips follows word from rival Mattel in July that it would cut 2,200 jobs worldwide as a result of Toys R Us shutting its doors. Mattel is scheduled to release its third-quarter earnings on Thursday.