Consumer Discretionary
Leisure
$7.94B
6K
Hasbro, Inc., together with its subsidiaries, operates as a toy and game company in the United States, Europe, Canada, Mexico, Latin America, Australia, China, and Hong Kong. The company operates through Consumer Products; Wizards of the Coast and Digital Gaming; Entertainment; and Corporate and Other segments. The Consumer Products segment engages in the sourcing, marketing, and sale of toy and game products. This segment also promotes its brands through the out-licensing of trademarks, characters, and other brand and intellectual property rights to third parties through the sale of branded consumer products, such as toys and apparel. Its toys and games include action figures, arts and crafts and creative play products, dolls, play sets, preschool toys, plush products, sports action blasters and accessories, vehicles and toy-related specialty products, games, and other consumer products; and licensed products, such as apparel, publishing products, home goods and electronics, and toy products. The Wizards of the Coast and Digital Gaming segment engages in the promotion of its brands through the development of trading cards, role-playing, and digital game experiences based on Hasbro and Wizards of the Coast games. The Entertainment segment engages in the development, production, and sale of entertainment content, including film, television, children’s programming, digital content, and live entertainment. The company sells its products to retailers, distributors, wholesalers, discount stores, specialty hobby stores, drug stores, mail order houses, catalog stores, department stores, and other traditional retailers, as well as e-commerce retailers; and directly to customers through its e-commerce websites under the MAGIC: THE GATHERING, Hasbro Gaming, PLAY-DOH, NERF, TRANSFORMERS, DUNGEONS & DRAGONS, PEPPA PIG, and other brand names. Hasbro, Inc. was founded in 1923 and is headquartered in Pawtucket, Rhode Island.
Key insights and themes extracted from this filing
Net revenues decreased from $1,001.0 million to $757.3 million, a 24% decline, primarily driven by the sale of the Entertainment One film and television business. The Consumer Products segment also experienced a decline of 21%.
Operating profit increased to $116.2 million compared to $17.9 million in the prior year, driven by cost savings from the Operational Excellence Program and a non-recurring stock compensation adjustment. This indicates improved efficiency despite lower sales volume.
Net earnings attributable to Hasbro, Inc. improved to $58.2 million, compared to a loss of $22.1 million in the prior year. This improvement reflects the increase in operating profit and lower interest expense due to debt reduction.
The company is focusing on fewer, bigger brands, as evidenced by the sale of the Entertainment One film and television business. This strategy aims to improve efficiency, reduce costs, and reinvest in core franchises.
The Wizards of the Coast and Digital Gaming segment experienced a 7% increase in net revenues, driven by digital licensing of Baldur's Gate 3 and the continued success of MONOPOLY GO!. This highlights the growth potential in digital gaming.
The Consumer Products segment experienced a 21% decline in net revenues, driven by broader industry trends, exited businesses, and reduced closeout sales. This indicates challenges in the traditional toy and game market.
The Operational Excellence program contributed to cost savings, as reflected in the improved operating profit despite lower revenues. This program is intended to improve business processes and operations.
Corporate and Other operating profit was impacted by a benefit from an adjustment for stock compensation expense reversal. This suggests a change in the expected performance of stock-based awards.
The company has strengthened its leadership team with industry veterans and turnaround experts. This suggests a focus on improving performance and executing the company's strategy.
The company monitors the impact of inflation to its business operations on an ongoing basis and may need to implement actions such as price adjustments to mitigate the impact of changes to the rate of inflation in future periods.
A significant change in foreign exchange rates can materially impact the Company's revenues and earnings due to translation of foreign-denominated revenues and expenses.
There are no material changes from the risk factors as previously disclosed in the 2023 10-K, in any of our subsequently filed reports or as otherwise set forth in this Quarterly Report.
The Wizards of the Coast and Digital Gaming segment experienced a 7% increase in net revenues, driven by digital licensing of Baldur's Gate 3 and the continued success of MONOPOLY GO!. This indicates a strong competitive position in digital gaming.
The Consumer Products segment experienced a 21% decline in net revenues, driven by broader industry trends, exited businesses, and reduced closeout sales. This indicates challenges in the traditional toy and game market.
Entertainment segment net revenues declined 85% to $28.0 million for the first quarter of 2024, compared to $185.4 million for the first quarter of 2023 due to sale of eOne Film and TV business.
Cost of sales decreased to $204.2 million, or 27.0% of net revenues, driven primarily by lower sales volumes as well as cost savings from the Company's Operational Excellence Program.
Selling, distribution and administration expenses decreased to $234.8 million, or 31.0% of net revenues, primarily reflecting lower administrative expenses due to cost savings from the Company's Operational Excellence Program.
The Operational Excellence program contributed to savings across multiple expense categories, including cost of sales, selling, distribution, and administration expenses. This indicates a broad impact on operational efficiency.
The Wizards of the Coast and Digital Gaming segment experienced a 7% increase in net revenues, primarily attributable to revenue contributions from higher digital licensing of Baldur's Gate 3.
Tabletop Gaming revenue increased 5% behind growth in MAGIC: THE GATHERING shipment timing to support the Outlaws of Thunder Junction release and strong demand for the Universes Beyond Fallout Commander set.
The Wizards of the Coast and Digital Gaming business engages in the promotion of the Company's brands through the development of trading card, role-playing and digital game experiences based on Hasbro and Wizards of the Coast games.
There were no repurchases of the Company's Common Stock during the three months ended March 31, 2024. At March 31, 2024, Hasbro had $241.6 million remaining available under its share repurchase authorization.
Financing activities in the first three months of 2024 primarily include dividends paid of $97.2 million.
Additions to property, plant and equipment were $45.8 million in the first three months of 2024 compared to $53.2 million in the first three months of 2023.
For the past decade, we have been consistently recognized for our corporate citizenship, including being named one of the 100 Best Corporate Citizens by 3BL Media.
Hasbro is guided by our purpose to create joy and community for all people around the world, one game, one toy, one story at a time.
The 10Q filing does not contain specific details on environmental, social, or governance initiatives beyond the general statement of corporate citizenship.
The Consumer Products segment net revenues declined 21% to $413.0 million for the first quarter of 2024 compared to $520.4 million for the first quarter of 2023 primarily driven by broader industry trends.
Within the Partner Brands portfolio, there are a number of brands which are reliant on related entertainment, including television and movie releases. As such, net revenues from Partner Brands fluctuate depending on entertainment popularity, release dates and related product line offerings.
However, future volatility of general price inflation could affect consumer purchases of our products and spending on entertainment.