The company did report a hit of undisclosed size to sales because shipments to the chain were stopped for “a short period,” and some increase in its bad debt allowance. But with the signing of the new agreement, Hasbro expects that to be the last of its write-offs, with no impact to 2018 earnings, Goldner said in the call. He said the commercial teams for the two companies were reviewing shipments for the chain for the holiday season, but did lower expectations for Q4 sales based on an expected impact on sales from the bankruptcy.
Hasbro’s game sales, including franchise brand Magic: The Gathering, were up 4% for Q3 2017, a decline in growth rate from the 9% for full year 2016 (see "Hasbro Game Sales Grow in 2016"), a 10% increase in Q1 (see "'Magic' Down and 'D&D' Up"), and 20% increase in Q2 (see "Games Drive Hasbro Sales Jump").
Magic: The Gathering sales were down for the quarter, as the company predicted when it reported Q1. At that time, the company said it expected sales of Magic in Q1 and Q3 to decline, and sales in Q2 and Q4 to grow vs. 2016.
Overall, sales were up 7% with a 3% increase in net earnings, the company reported. That was a beat for both sales and earnings, according to Seeking Alpha. But lowering Q4 sales expectations due to Toys R Us wasn’t popular news; the stock price declined 8.4% on Monday.
This is the second place we’ve seen softer game sales in the reporting of public companies recently (although the growth rate was still positive at Hasbro). Barnes & Noble reported a second quarterly decline in sales of its non-book categories in its most recent quarter (see "Barnes & Noble Has Surprisingly Big Sales Decline").