By Tonya Garcia, MarketWatch
Amazon wasn’t the only winner during Prime Day.
Hasbro Inc. /zigman2/quotes/201249319/composite HAS -1.72% , which announced its second-quarter earnings before the Tuesday opening bell, said the recent shopping event was also a boon for the toy company.
“Last week, Hasbro brands delivered strong growth during Amazon’s Prime Day event,” Hasbro Chief Executive Brian Goldner said on the earnings call, according to a FactSet transcript. “In Amazon markets around the world, Play-Doh and Nerf were among the standout drivers.”
Amazon.com Inc. /zigman2/quotes/210331248/composite AMZN -0.76% didn’t release numbers, but said sales over the two days surpassed Black Friday and Cyber Monday combined. Among the items it called out as best sellers were its own Echo Dot device and the LifeStraw Personal Water Filter.
Amazon is one of the retailers that has filled the retailing hole created by the Toys ‘R’ Us liquidation. Toys ‘R’ Us is being revived in the U.S. with two stores, but one expert, The Toy Insider’s Senior Editor James Zahn, says the industry has moved on.
In addition to the Amazon Prime Day standouts, Goldner said Magic: The Gathering, a collectible and digital card game, had an “outstanding” second quarter and first half.
One negative from the quarter was the threat of tariffs.
“While no material tariffs have been enacted on our products, we did incur incremental expenses to prepare for the potentiality of tariffs in the U.S.,” Goldner said.
If tariffs are implemented, Hasbro says prices will go up for shoppers.
“A tariff increases the price to bring our product into this country. This would be borne by the importer, which is primarily Hasbro,” said Deborah Thomas, Hasbro’s chief financial officer, on the call. “We would pass this increase on to the customer through higher prices on the tariffed item.”
For the second quarter, Hasbro reported adjusted earnings per share of 78 cents, well ahead of the FactSet consensus for 50 cents. Sales of $984.5 million also beat the $958.0 million FactSet expectation.
“Following strong and ongoing execution of cost management initiatives in the first half, we think Hasbro is well positioned to deliver profitable growth in the second half,” said CFRA Research’s Camilla Yanushevsky in a bullish note, highlighting initiatives surrounding the releases of “Frozen 2” and “Star Wars,” as well as Amazon Prime Day.
“We also see incremental market share gains for Hasbro in 2019, given Mattel’s heightened reputation risk from Rock ‘N Play Sleeper recall.”
CFRA upgraded Hasbro stock to buy from hold and lifted its 12-month target to $125 from $95.
Hasbro stock rocketed 10% in Tuesday trading, the biggest one-day percentage jump since April 1975. Since the beginning of 2019, shares have gained 50% while the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.88% is up 20.5% for the period.