Will Hasbro (HAS) Record Revenue & Earnings Growth In Q4?

Hasbro, Inc. (NASDAQ:HAS) is scheduled to report fourth-quarter 2017 results on Feb 7, before the market opens.

In the last reported quarter, the company surpassed the Zacks Consensus Estimate for earnings by 8.29%. It recorded earnings beats in three of the trailing four quarters, the average positive surprise being 16.97%.

Shares of the company have gained 15.9% in the past year, underperforming the industry’s rally of 56.5%.

Revenue Growth Range Slashed

The consensus estimate for fourth-quarter revenues is pegged at $1.73 billion, reflecting 6.4% year-over-year growth.

In the to-be-reported quarter, revenues at the U.S and Canada segment are expected to grow driven by strength in the company’s Franchise Brands, Partner Brand, Hasbro Gaming and Emerging Brand. International segment revenues are expected to increase on the back of solid Franchise Brand and Hasbro Gaming revenues across Europe, Latin America and Asia Pacific. Entertainment and Licensing segment revenues are expected to rise on the entertainment initiatives and higher consumer product sales.

However, the recent Toys ‘R’ Us bankruptcy will keep Hasbro’s top line under pressure. The bankruptcy disrupted the company’s growth plans for the fourth quarter and had even paused shipments for a short period. Taking into account the adverse impacts that are expected to continue, the company has revised its fourth-quarter revenue growth guidance to the range of 4% to 7%, lower than its earlier projection.

Earnings to Grow Despite Adverse Operating Environment

The consensus estimate for fourth-quarter earnings is pegged at $1.82, mirroring nearly 11% year-over-year growth. We believe that this growth is attributable to the company’s efficient cost structure coupled with various sales-boosting efforts to counter the challenging operating environment in some key markets.

Our Quantitative Model Does Not Predict a Beat

Hasbro does not have the right combination of two main ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher — that increase the odds of an earnings beat.

Zacks ESP: The company has an Earnings ESP of -0.29%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Hasbro has a Zacks Rank #3.

Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Hasbro, Inc. Price and EPS Surprise

Hasbro, Inc. Price and EPS Surprise | Hasbro, Inc. Quote

Stocks to Consider

Here are a few stocks from the Consumer Discretionary sectorthat investors may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:

Penn National Gaming (NASDAQ:PENN) has an Earnings ESP of +7.90% and a Zacks Rank #2 (Buy). The company is expected to report its quarterly numbers on Feb 8. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Marriott (NASDAQ:MAR) has an Earnings ESP of +0.14% and a Zacks Rank #2. The company is expected to report its quarterly numbers on Feb 14.

Wyndham Worldwide (NYSE:WYN) has an Earnings ESP of +1.49% and a Zacks Rank #3. The company is expected to release its quarterly numbers on Feb 14.

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