But executives at Hasbro say the uncertainty of new import duties — and changes in when they will be implemented — has already had an impact. U.S. revenue fell 2 percent in the most recent quarter, while profits dropped by nearly 20 percent.
“As you recall, since the administration began discussing tariffs, we have outlined the ripple effect they would have on our business,” Brian Goldner, Hasbro’s chairman and chief executive, said Tuesday during an earnings call. “In the third quarter, the threat of and the implementation of tariffs . . . impacted our shipments and our ability to fully meet demand.”
The company, he said, is facing “a very choppy environment where retailer order patterns have changed in response to potential tariffs.”
Industry groups have long warned that U.S. consumers and businesses would have to shoulder the burden of new tariffs. The toy industry, which relies heavily on Chinese manufacturing, is expected to be among the hardest hit. Upcoming tariffs could cause the price of toys to spike as much as 17 percent — compared with 8 percent for shoes and 4 percent for televisions — according to a report by the Trade Partnership, prepared for the National Retail Federation.
Hasbro, which is based in Pawtucket, R.I., said most of its products, which include Monopoly and Play-Doh, will be hit with a 10 percent tax on Dec. 15.
Goldner said the company has no choice but to raise prices if those tariffs take effect in December. “Those price increases would be passed along to consumers,” he said.
The company is trying to reduce its reliance on Chinese imports, which make up about two-thirds of its products. It hopes to reduce that number to less than 50 percent by the end of next year, Goldner said.
Third-quarter profits fell to $212.9 million, or $1.67 a share, down from $263.9 million, or $2.06 a share, from a year earlier. Revenue, meanwhile, rose 0.6 percent to $1.58 billion.
Shares of Hasbro closed at $100.02 on Tuesday, down $20.14 or 16.8 percent.