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Fitch affirms Hasbro's BBB+ rating

Fitch Ratings on June 1 affirmed Hasbro Inc.'s ratings, including its issuer default rating at BBB+, with a stable outlook.

The affirmation reflects the Rhode Island-based toy maker's position as one of the top companies in the $90 billion global toy industry, alongside Lego System A/S, Bandai Namco Holdings Inc. and Mattel Inc., Fitch said.

The agency also cited Hasbro's $5.2 billion revenue and $1 billion EBITDA in 2017, as well as its global reach, which spans more than 120 countries.

In addition, Fitch believes Hasbro's Brand Blueprint strategy, which uses brand storytelling as a marketing platform, has supported core brand loyalty and connection with customers, while at the same time maximizing selling opportunities across a number of categories and demographics.

Meanwhile, it forecasts Hasbro's revenue to decline mid-single digits in 2018 to $5 billion as a result of Toys R Us Inc.'s bankruptcy and U.S. store liquidation and Hasbro's weakness in Europe. Fitch also predicts EBITDA to fall to around $900 million due to topline declines, and related EBITDA margin contraction to around 18% from the recent 20% level.

The agency noted that the rating considers fashion and brand risk inherent in the toy industry and the channel dislocation in connection to the Toys R Us bankruptcy.