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Jul 02, 2023
Hasbro Q2 2023 Earnings Report
Reported a solid second quarter with revenue ahead of expectations, significant inventory reduction, and progress in transformation and cost savings programs.
Key Takeaways
Hasbro reported a 10% decrease in revenue, but it was ahead of expectations due to stronger point of sale trends within Consumer Products. The company is selling its eOne Film and TV business to Lionsgate to focus on core toy and game expertise. They have made progress on their transformation, delivering $84 million in cost savings in the first half of 2023, and reduced owned inventory by 16%.
Q2 Hasbro, Inc. revenue declined 10%, ahead of expectations, driven by stronger than planned point of sale trends within Consumer Products.
Announced sale of eOne Film & TV business enabling focus on core toy and game brands; expected to close in the back-half of 2023.
Meaningful progress on transformation; delivered $84 million of cost savings under the Operational Excellence Program in the first half of 2023.
Reduced owned inventory level by 16% versus prior year driven by Consumer Products; global Retail inventory down 16%.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
The outlook across the Consumer Products Segment is unchanged and Wizards of the Coast and Digital Gaming Segment revenue outlook is higher than prior guidance. Entertainment Segment guidance is updated to reflect the reality of the writers' and actors' strikes on the eOne Film and TV business.
Positive Outlook
- No change to Consumer Product guidance of down mid-single digits.
- Increasing guidance on Wizards of the Coast Segment to up high-single digits.
- Adjusted operating margin up 20 to 50 basis points versus last year's adjusted operating margin
- Consumer Products segment and Wizards and Digital Gaming segment margin outlook unchanged from prior guidance.
- Adjusted EBITDA approximately flat with 2022 adjusted EBITDA.
Challenges Ahead
- Revenue decline of 3-6% driven by the Entertainment Segment.
- Reducing outlook on Entertainment to down 25 to 30%.
- Entertainment segment margin is now expected to decline as a result of the D&D film impairment and the ongoing industry strikes.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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