Trade dispute blamed for Hasbro’s earnings miss

US toymaker Hasbro missed its Wall Street estimates for third-quarter earnings over fallout from the ongoing US-China trade dispute and the threat and delay of additional tariffs on China-made toys.

The company posted quarterly earnings of $213 million, down from $263 million compared with the year-ago quarter. Analysts had expected earnings of $281 million.

Hasbro's adjusted earnings per share for the quarter was $1.84, less than the Wall Street estimate of $2.21. Quarterly revenue rose to $1.58 billion, but still missed estimates of $1.71 billion.

"The threat and enactment of tariffs reduced revenues in the third quarter and increased expenses to deliver product to retail," Brian Goldner, Hasbro's chairman and CEO, said during an earnings call with analysts.

The maker of My Little Pony, Play-Doh and toys linked to Disney franchises like Frozen saw its shares tumble 17 percent on Tuesday. It was the largest one-day drop for Hasbro since December 2000. On Wednesday, Hasbro shares on the Nasdaq closed at $99.40, down 0.62 percent.

The lower-than-expected results came amid uncertainty over tariffs on Chinese-made toys. Goldner said Hasbro was forced to post higher shipping and warehousing expenses as retailers adjusted the timing of their orders due to the tariffs.

US President Donald Trump was set to impose a 10 percent tariff increase on toys imported from China on Sept 1 but delayed it until Dec 15 to accommodate Thanksgiving and Christmas shoppers.

Aside from the ceasefire, Hasbro also logged flat sales of toys for younger children, including Mr. Potato Head, Power Rangers and Playskool. Sales of its core products also suffered.

But toys linked to films like Star Wars: The Rise of Skywalker and Frozen 2 were popular, which could help the company rebound in the fourth quarter.

Before Tuesday's earnings, Hasbro had been enjoying a strong year. The stock was up 50 percent, stronger than rival Mattel.

The Toy Association, a not-for-profit trade association, called the ceasefire in the trade war a "step forward'', but urged the Trump administration to remove the threat of tariffs on toys made in China.

"A temporary truce in this trade war is certainly a step forward, but until tariffs are completely repealed, American consumers, toy businesses and millions of workers will continue to suffer," said Rebecca Mond, vice-president of federal government affairs at the Toy Association. "We urge the Trump administration to move through negotiations with China as swiftly as possible and put an end to these measures that do nothing more than hurt America's hard-working families."