Hasbro’s CEO does not expect any serious tariffs to come from the United States’ trade dispute with China, he told CNBC’s Jim Cramer in a Monday interview.
“I, thus far, have heard, in working with the administration, that we are being a good actor and a good player and we expect that business will be fine coming out of China,” Brian Goldner, also the toymaker’s chairman, said on “Mad Money.” “Go[ing] forward, we don’t expect to see any major tariff situation.”
Even so, Hasbro has been moving production out of China, the CEO said. The company has moved manufacturing operations for 25 percent of its revenue-generating products, including Play-Doh, back to the United States, he said.
“Overall, we produce about 70 percent of our product in China, but we’ve been moving production out of China. In fact, in the next two years, we should be down to about 60 percent out of China,” Goldner said.
China remains a key portion of Hasbro’s business in terms of sales, however. While Toys R Us, once an integral retailer for Hasbro’s goods, shut down its U.S. operations, Goldner said his toy and game manufacturer was still waiting to hear about Toys R Us Asia’s fate.
“We’re waiting for some resolution to Toys R Us Asia as the two partners work out a new arrangement in China, and then we move forward without Toys R Us,” the CEO said. “Really, the next quarter is the last quarter where Toys R Us has a meaningful impact.”
In the meantime, Hasbro is “adding so many new retail channels,” with 10,000 new U.S. retailers signed on to sell its products just in the last year, Goldner told Cramer.
“These are all kinds of new retailers that are out there,” he said, adding that Hasbro will enter the 2018 holiday season “with a lot of new kinds of retailers as we continue to build the business and they want to capture the share that Toys R Us left behind.”
Hasbro reported third-quarter earnings on Monday that were weaker than Wall Street expected, with earnings and revenue missing analysts’ expectations.
Shares of Hasbro closed down 3.09 percent on Monday, still feeling the impact of the company’s earnings report. The stock ended the trading day at $95.01 a share.
Source : CNBC