Hasbro 2010 Annual Report Download - page 51

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Company is characterized by customer order patterns which vary from year to year largely because of
differences in the degree of consumer acceptance of a product line, product availability, marketing strategies,
inventory levels, policies of retailers and differences in overall economic conditions. The trend of larger
retailers has been to maintain lower inventories throughout the year and purchase a greater percentage of
product within or close to the fourth quarter holiday consumer selling season, which includes Christmas.
Quick response inventory management practices being used by retailers result in more orders being placed
for immediate delivery and fewer orders being placed well in advance of shipment. Retailers are timing their
orders so that they are being filled by suppliers closer to the time of purchase by consumers. To the extent that
retailers do not sell as much of their year-end inventory purchases during this holiday selling season as they
had anticipated, their demand for additional product earlier in the following fiscal year may be curtailed, thus
negatively impacting the Company’s future revenues. In addition, the bankruptcy or other lack of success of
one of the Company’s significant retailers could negatively impact the Company’s future revenues.
The effect of inflation on the Company’s operations during 2010 was not significant and the Company
will continue its policy of monitoring costs and adjusting prices, accordingly.
Other Information
The Company is not aware of any material amounts of potential exposure relating to environmental
matters and does not believe its environmental compliance costs or liabilities to be material to its operating
results or financial position.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The information required by this item is included in Item 7 of Part II of this Report and is incorporated
herein by reference.
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