After a disappointing second-quarter earnings report, Hasbro (NASDAQ: HAS) is bouncing back sharply in the third, posting revenue and profit gains that beat analyst expectations.
Arguably more important is the toymaker exhibiting strength just in time for the Christmas shopping season.
Image source: Getty Images.
Every day is Christmas
Hasbro said sales grew 13% to $1.78 billion, ahead of the $1.74 billion Wall Street was expecting, while earnings of $213 million, or adjusted to $1.88 per share, easily beat forecasts of $1.63 per share.
The toymaker ended the quarter with $1.13 billion in cash in the bank and produced operating cash flows of nearly half a billion. CEO Brian Goldner says consumer demand is "quite strong," which ought to serve it well now that the holiday shopping season has begun.
While the shopping season is earlier than usual, there is a lot of pent up consumer spending waiting to be unleashed. Amazon got the ball rolling earlier this month with its two-day Prime Day shopping extravaganza. Others joined in, such as Walmart, which said it was having Black Friday deals every weekend until Christmas. Amazon is currently holding a new Holiday Dash sales event.
Goldner said in a statement, "Building off this quarter's growth in toys, games and digital we are positioned to deliver a good holiday season."
It hadn't always looked like that was possible after Hasbro disappointed investors last quarter by broadly underperforming analyst expectations. Considering the lockdowns and stay-at-home orders in effect due to the pandemic, Wall Street was expecting bigger numbers that didn't materialize.
That's turned around now, but the stock still tumbled as rival Mattel put up better numbers once again.
10 stocks we like better than Hasbro
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Hasbro wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of October 20, 2020
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and Hasbro and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.