Company Reiterates Full-year 2023 Financial
Guidance as Turnaround Efforts Progress and MAGIC: THE GATHERING
Growth Continues
Hasbro, Inc. (NASDAQ: HAS), a global branded entertainment
leader, today reported financial results for the first quarter
2023.
- First quarter revenues of $1.00 billion declined 14%
year-over-year, or 13% on a constant currency basis.
- MAGIC: THE GATHERING revenue increases 16% Year-Over-Year
- First quarter operating profit of $17.9 million and adjusted
operating profit of $47.2 million.
- First quarter net loss of $22.1 million, or a net loss of $0.16
per share, and adjusted net income of $1.0 million, or $0.01 per
diluted share.
- Company realizes $35 million in Operational Excellence program
cost savings year-to-date. Reaffirms guidance for $150 million
run-rate savings for full-year 2023.
"First quarter results came in ahead of our expectations and
position Hasbro to meet our full-year financial targets," said
Chris Cocks, Hasbro chief executive officer. "Wizards of the Coast
and Digital Gaming delivered strong fan engagement. Segment
revenues increased 12%, including a 16% revenue increase in MAGIC:
THE GATHERING, behind the successful release of Phyrexia: All Will
Be One. Dungeons and Dragons: Honor Among Thieves delivered strong
critical and audience reviews pointing to a promising long life
including home entertainment and streaming, while also introducing
our newest Franchise Brand to tens of millions of new fans around
the world and positioning DUNGEONS & DRAGONS for robust
full-year growth.
"We've made significant progress in implementing our Blueprint
2.0 strategy, including heightening our focus on high-growth,
high-profit categories; improving our cost structure; and adding
talented executives to our leadership team. The sale process for
the eOne TV and film assets is ongoing and we expect to provide an
update during the second quarter," said Cocks. "The global Hasbro
team continues to execute our strategy to unlock the value of our
rich IP library across our growth priorities including in gaming,
direct-to-consumer and licensing."
"The year has started on plan as we reduce retail inventory
levels and remain positioned to drive continued margin expansion.
As we work through our inventory, we continue to invest in our
growth priorities, reduce costs, and return cash to shareholders,"
said Deborah Thomas, Hasbro chief financial officer. "The first
quarter is the smallest quarter of the year, and there is a lot of
the year ahead of us. The team is advancing our cost savings and
taking strategic steps to drive long-term shareholder value. With
my upcoming retirement and transition on May 18, I believe Hasbro
is well positioned with an experienced leadership team and a strong
strategic and financial plan for the future."
First Quarter 2023 Financial
Results
$ Millions, except earnings per
share
Q1 2023
Q1 2022
% Change
Net Revenues1
$
1,001.0
$
1,163.1
-14
%
Operating Profit
$
17.9
$
120.0
-85
%
Adjusted Operating Profit2
$
47.2
$
141.8
-67
%
Net Earnings (Loss)
$
(22.1
)
$
61.2
>-100%
Net Earnings (Loss) per Diluted
Share
$
(0.16
)
$
0.44
>-100%
Adjusted Net Earnings2
$
1.0
$
79.4
-99
%
Adjusted Net Earnings per Diluted
Share2
$
0.01
$
0.57
-98
%
EBITDA2
$
72.4
$
174.0
-58
%
Adjusted EBITDA2
$
98.7
$
192.1
-49
%
1Foreign exchange had a negative $15.8
million impact, or 1%, on first quarter 2023 revenue.
2See the financial tables accompanying
this press release for a reconciliation of GAAP and non-GAAP
financial measures, namely, adjusted operating profit, adjusted net
earnings, adjusted net earnings per share and adjusted EBITDA.
First Quarter 2023 Brand
Portfolio
Brand Performance ($ Millions)
Net Revenues
Q1 2023
Q1 2022
% Change
Franchise Brands1
$
613.4
$
650.4
-6
%
Partner Brands
$
132.7
$
206.5
-36
%
Portfolio Brands
$
92.0
$
112.6
-18
%
Non-Hasbro Branded Film &
TV
$
162.9
$
193.6
-16
%
1Effective in the first quarter of 2023,
the Company realigned its Brand Portfolios to Franchise Brands,
Partner Brands, Portfolio Brands and Non-Hasbro Branded Film &
TV. Franchise Brands include DUNGEONS & DRAGONS, Hasbro Gaming,
MAGIC: THE GATHERING, NERF, PEPPA PIG, PLAY-DOH and TRANSFORMERS. A
schedule of historical quarterly revenue is available at
https://investor.hasbro.com/ under Financials & Filings.
Within Franchise Brands, NERF, Hasbro Gaming, PLAY-DOH and PEPPA
PIG declined in the quarter as retailers focused on reducing
inventory levels.
First Quarter 2023 MAGIC: THE GATHERING
and Gaming Portfolio
Net Revenues
$ Millions
Q1 2023
Q1 2022
% Change
MAGIC: THE GATHERING
$
229.1
$
197.2
16
%
Hasbro Total Gaming1
386.5
378.8
2
%
1Hasbro’s Total Gaming Category includes
all gaming revenue, most notably MAGIC: THE GATHERING, Hasbro
Gaming and DUNGEONS & DRAGONS.
MAGIC: THE GATHERING's first quarter revenues increased 16%.
Strong player demand led to higher-than-expected performance for
the first quarter release of Phyrexia: All Will Be One. Back
catalog sales of previously released sets continue to perform.
Modern Horizons 2, released in June 2021, officially became the
game's first $200 million set in the first quarter. Universes
Beyond Warhammer 40K hit its fourth reprint on strong continuing
demand and the newest Universes Beyond set, The Lord of the Rings:
Tales of Middle-Earth, debuted with record pre-orders in March for
a late second quarter release. As previously communicated, we
expect MAGIC: THE GATHERING revenue to decline in the second
quarter based on year-over-year release timing. Third quarter
revenue is expected to increase on a strong release slate and
robust ongoing demand for the game. Organized play, i.e., in person
tournaments, also continues to build with the second MagicCon of
the year slated for May 5-7 in Minneapolis following a successful
event in Philadelphia in February.
Company Outlook
Reflecting on the current environment and an expected flat to
declining toy and game market in 2023, the Company's full-year 2023
guidance remains:
- Revenue down low-single digits
- Adjusted operating profit margin expansion of 50 to 70 basis
points, excluding Operational Excellence charges and other non-GAAP
items1
- Adjusted earnings per diluted share in the range of $4.45 to
$4.55
- Adjusted EBITDA approximately flat with 2022 Adjusted
EBITDA
- Operating cash flow in the range of $600 to $700 million
1The Company is not able to reconcile its forward-looking
non-GAAP adjusted operating profit margin, adjusted earnings per
diluted share and adjusted EBITDA measures because the Company
cannot predict with certainty the timing and amounts of discrete
items such as charges associated with its cost-savings program,
which could impact GAAP results. Guidance does not reflect the
potential sale of select entertainment assets. The Company plans to
update its outlook upon completion of this process if it results in
the sale of non-core entertainment assets.
Operational Excellence Program In support of Blueprint
2.0, Hasbro implemented an Operational Excellence program to
deliver $250-300 million in annualized run-rate cost savings by
year-end 2025. In the first quarter 2023, the Company realized an
additional $35 million of savings and still expects to achieve $150
million in run-rate cost savings for the full-year 2023. Expected
cash costs to implement the program are approximately $200 million,
of which $17.1 million was spent in the first quarter and
approximately $167 million remains to be spent. An $8.1 million
after-tax charge was recorded in first quarter 2023 associated with
the execution of the Blueprint 2.0 strategy.
First Quarter 2023 Major Segment
Performance
Q1 2023 Major Segments ($
Millions)
Net Revenues
Operating Profit
(Loss)
Adjusted Operating Profit
(Loss)1
Q1 2023
Q1 2022
% Change
Q1 2023
Q1 2022
Q1 2023
Q1 2022
Consumer Products
$
520.4
$
672.8
-23
%
$
(46.0
)
$
8.6
$
(35.4
)
$
18.9
Wizards of the Coast and Digital
Gaming
$
295.2
$
262.8
12
%
$
76.8
$
106.4
$
76.8
$
106.4
Entertainment
$
185.4
$
227.5
-19
%
$
(8.7
)
$
12.2
$
(2.5
)
$
21.0
Q1 2023 Major Segments ($
Millions)
EBITDA
Adjusted EBITDA1
Q1 2023
Q1 2022
Q1 2023
Q1 2022
Consumer Products
$
(11.5
)
$
41.3
$
(4.6
)
$
48.8
Wizards of the Coast and Digital
Gaming
$
81.2
$
107.6
$
86.4
$
112.2
Entertainment
$
3.5
$
25.9
$
8.1
$
31.4
1Reconciliations are included in the
attached schedules under the heading "Reconciliation of Adjusted
Operating Profit" and “Reconciliation of EBITDA and Adjusted
EBITDA.”
First Quarter 2023 Segment Commentary & 2023
Outlook
Consumer Products segment revenues decreased 23%.
- Revenue decreased 21% excluding a negative $8.3 million impact
of foreign exchange, $6.2 million of which was in Europe.
- Revenue declines reflect the Company's efforts to lower retail
inventory levels.
- The segment's decline in adjusted operating profit is the
result of lower revenue, including higher allowances and close outs
to sell through inventory. These items were partially offset by
savings realized from the Company’s Operational Excellence program,
reflected primarily in cost of sales.
- For the full year 2023, revenue is expected to decline
mid-single digits from full-year 2022 with adjusted operating
profit margin improvement of 150 to 200 basis points from the
adjusted 7.6% in 2022.
Wizards of the Coast and Digital Gaming segment revenues
increased 12%.
- Revenues increased 14% excluding a negative $3.1 million impact
of foreign exchange.
- Tabletop gaming revenue increased 13%. Digital and licensed
gaming revenue increased 9%, bolstered by the addition of D&D
Beyond. Underlying demand for both MAGIC: THE GATHERING and
DUNGEONS & DRAGONS remains robust.
- Operating profit declined 28% due to investments in product
development and personnel, higher product cost, advertising expense
and costs supporting the return of organized play.
- Second quarter revenues are expected to decline year-over-year
for the segment based on MAGIC release timing which favors the
third quarter. Third quarter revenues are also expected to be
buoyed by the anticipated release of the D&D branded AAA video
game, Baldur’s Gate 3, in August on consoles and PC.
- For the full year 2023, we expect mid-single digit revenue
growth. Operating profit margin is expected to be in the high 30%
range as we continue to build on the Universes Beyond franchise and
invest for long-term growth in these valuable brands.
Entertainment segment revenue decreased 19%.
- Revenues declined 17% excluding a negative $4.3 million impact
of foreign exchange.
- Film & TV revenue declined 11% reflecting lower film
revenues with fewer new releases in 2023 vs. 2022 and lower
unscripted TV revenue. TV revenues increased behind continued
strong scripted TV deliveries, including the new series The Rookie:
Feds.
- Family Brands revenue declined 27% primarily due to content
sales timing year-over-year with several multi-year licensing deals
executed in Q1 2022.
- Music and Other declined as the Company exited these businesses
in late 2022.
- Adjusted operating loss was the result of lower revenues, as
well as higher advertising for Dungeons & Dragons: Honor Among
Thieves partially offset by lower royalty expense.
- For the full-year 2023, we expect revenue to increase
low-single digits and adjusted operating profit margin is expected
to increase slightly from 8.6% in 2022. Guidance will be updated
upon completion of the sale process of our non-core entertainment
assets.
Capital Priorities and
Dividend During the first quarter, Hasbro paid $96.7
million in cash dividends to shareholders. The next dividend of
$0.70 per common share was previously declared and will be payable
on May 15, 2023 to shareholders of record at the close of business
on May 1, 2023.
The Company continues to target Debt to EBITDA of 2.0 to 2.5
times. For 2023, progress is expected against this target. Pending
the outcome of the sale of non-core film and TV assets, the Company
anticipates prioritizing the sale proceeds toward paying down debt.
The Company remains committed to maintaining its investment grade
rating.
Conference Call Webcast
Hasbro will webcast its first quarter 2023 earnings conference call
at 8:30 a.m. Eastern Time today. To listen to the live webcast and
access the accompanying presentation slides, please go to
https://investor.hasbro.com. The replay of the call will be
available on Hasbro’s website approximately 2 hours following
completion of the call.
About Hasbro Hasbro is a global branded entertainment
leader whose mission is to entertain and connect generations of
fans through the wonder of storytelling and exhilaration of play.
Hasbro delivers engaging brand experiences for global audiences
through gaming, consumer products and entertainment, with a
portfolio of iconic brands including MAGIC: THE GATHERING, DUNGEONS
& DRAGONS, Hasbro Gaming, NERF, TRANSFORMERS, PLAY-DOH and
PEPPA PIG, as well as premier partner brands.
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. For more than a decade, Hasbro has been consistently
recognized for its corporate citizenship, including being named one
of the 100 Best Corporate Citizens by 3BL Media, one of the World’s
Most Ethical Companies by Ethisphere Institute and one of the 50
Most Community-Minded Companies in the U.S. by the Civic 50. For
more information, visit https://corporate.hasbro.com.
© 2023 Hasbro, Inc. All Rights Reserved.
Forward Looking Statement Safe Harbor Certain statements
in this press release contain “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. These statements, which may be identified by the use of
forward-looking words or phrases, include statements relating to:
our business strategies and plans for growth; expectations relating
to products, gaming and entertainment; anticipated cost savings;
financial targets; changes in leadership; and anticipated financial
performance for 2023. Our actual actions or results may differ
materially from those expected or anticipated in the
forward-looking statements due to both known and unknown risks and
uncertainties. Factors that might cause such a difference include,
but are not limited to:
- our ability to successfully execute on our Blueprint 2.0
strategy, including to focus on and scale select business
initiatives and brands to drive profitability;
- our ability to design, develop, manufacture, and ship products
on a timely, cost-effective and profitable basis;
- our ability to successfully compete in the global play and
entertainment industry;
- our ability to successfully evolve and transform our business
and capabilities to successfully address the global consumer
landscape;
- inflation and downturns in global and regional economic
conditions impacting one or more of the markets in which we sell
products, which can negatively impact our retail customers and
consumers, result in lower employment levels, consumer disposable
income, retailer inventories and spending, including lower spending
on purchases of our products;
- our dependence on third party relationships, including with
third party manufacturers, licensors of brands, studios, content
producers and entertainment distribution channels;
- risks relating to the concentration of manufacturing for many
of our products in the People’s Republic of China and our ability
to successfully diversify sourcing of our products to reduce
reliance on sources of supply in China;
- our ability to successfully develop and continue to execute
plans to mitigate the negative impact of the coronavirus on our
business;
- risks related to other economic and public health conditions or
regulatory changes in the markets in which we and our customers,
partners, licensees, suppliers and manufacturers operate, such as
inflation, rising interest rates, higher commodity prices, labor
costs or transportation costs, or outbreaks of disease, the
occurrence of which could create work slowdowns, delays or
shortages in production or shipment of products, increases in costs
or delays in revenue;
- risks associated with international operations, such as
currency conversion, currency fluctuations, the imposition of
tariffs, quotas, shipping delays or difficulties, border adjustment
taxes or other protectionist measures, and other challenges in the
territories in which we operate;
- the success of our key partner brands, including the ability to
secure, maintain and extend agreements with our key partners or the
risk of delays, increased costs or difficulties associated with any
of our or our partners’ planned digital applications or media
initiatives;
- risks related to our leadership changes;
- our ability to attract and retain talented and diverse
employees;
- our ability to realize the benefits of cost-savings and
efficiency and/or revenue and operating profit enhancing
initiatives;
- risks relating to the impairment and/or write-offs of products
and content we acquire and produce;
- risks relating to loss of data or security breaches;
- risks relating to investments, acquisitions and dispositions,
including the ability to realize the anticipated benefits of
acquired assets or businesses;
- fluctuations in our business due to seasonality;
- the concentration of our customers, potentially increasing the
negative impact to our business of difficulties experienced by any
of our customers or changes in their purchasing or selling
patterns;
- the bankruptcy or other lack of success of one or more of our
significant retailers, licensees and other partners; and
- other risks and uncertainties as may be detailed from time to
time in our public announcements and U.S. Securities and Exchange
Commission (“SEC”) filings.
The statements contained herein are based on our current beliefs
and expectations. We undertake no obligation to make any revisions
to the forward-looking statements contained in this press release
or to update them to reflect events or circumstances occurring
after the date of this press release.
Non-GAAP Financial Measures The financial tables
accompanying this press release include non-GAAP financial measures
as defined under SEC rules, specifically Adjusted operating profit,
Adjusted net earnings and Adjusted net earnings per diluted share,
which exclude, where applicable, acquisition and related costs,
acquired intangible amortization; and Operational Excellence
charges. Also included in this press release are the non-GAAP
financial measures of EBITDA and Adjusted EBITDA. EBITDA represents
net earnings attributable to Hasbro, Inc. excluding interest
expense, income tax expense, net earnings (loss) attributable to
noncontrolling interests, depreciation and amortization of
intangibles. Segment EBITDA represents segment operating profit
(loss) plus other income or expense, less depreciation and
amortization of intangibles. Adjusted EBITDA also excludes
Operational Excellence charges and the impact of stock compensation
(including acquisition-related stock expense). As required by SEC
rules, we have provided reconciliations on the attached schedules
of these measures to the most directly comparable GAAP measure.
Management believes that Adjusted net earnings, Adjusted net
earnings per diluted share and Adjusted operating profit provide
investors with an understanding of the underlying performance of
our business absent unusual events. Management believes that EBITDA
and Adjusted EBITDA are appropriate measures for evaluating the
operating performance of our business because they reflect the
resources available for strategic opportunities including, among
others, to invest in the business, strengthen the balance sheet and
make strategic acquisitions. The impact of changes in foreign
currency exchange rates used to translate the consolidated
statements of operations is quantified by translating the current
period revenues at the prior period exchange rates and comparing
this amount to the prior period reported revenues. The Company
believes that the presentation of the impact of changes in exchange
rates, which are beyond the Company’s control, is helpful to an
investor’s understanding of the performance of the underlying
business. These non-GAAP measures should be considered in addition
to, not as a substitute for, or superior to, net earnings or other
measures of financial performance prepared in accordance with GAAP
as more fully discussed in our consolidated financial statements
and filings with the SEC. As used herein, "GAAP" refers to
accounting principles generally accepted in the United States of
America.
HAS-E
(Tables Attached)
HASBRO, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(1)
(Unaudited)
(Millions of Dollars)
April 2, 2023
March 27, 2022
ASSETS
Cash and Cash Equivalents
$
386.2
$
1,057.9
Accounts Receivable, Net
685.2
931.7
Inventories
713.4
644.3
Prepaid Expenses and Other Current
Assets
754.4
621.4
Total Current Assets
2,539.2
3,255.3
Property, Plant and Equipment, Net
509.1
422.6
Goodwill
3,470.1
3,419.3
Other Intangible Assets, Net
801.0
1,136.6
Other Assets
1,604.3
1,284.9
Total Assets
$
8,923.7
$
9,518.7
LIABILITIES, NONCONTROLLING INTERESTS
AND SHAREHOLDERS' EQUITY
Short-Term Borrowings
$
134.5
$
104.1
Current Portion of Long-Term Debt
109.0
155.8
Accounts Payable and Accrued
Liabilities
1,653.9
1,783.1
Total Current Liabilities
1,897.4
2,043.0
Long-Term Debt
3,682.4
3,737.9
Other Liabilities
585.2
633.6
Total Liabilities
6,165.0
6,414.5
Redeemable Noncontrolling Interests
—
23.5
Total Shareholders' Equity
2,758.7
3,080.7
Total Liabilities, Noncontrolling
Interests and Shareholders' Equity
$
8,923.7
$
9,518.7
(1) Amounts may not sum due to
rounding
HASBRO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(1)
(Unaudited)
(Millions of Dollars and Shares Except Per
Share Data)
Quarter Ended
April 2, 2023
% Net Revenues
March 27, 2022
% Net Revenues
Net Revenues
$
1,001.0
100.0
%
$
1,163.1
100.0
%
Costs and Expenses:
Cost of Sales
285.3
28.5
%
333.1
28.6
%
Program Cost Amortization
122.5
12.2
%
138.5
11.9
%
Royalties
69.0
6.9
%
90.1
7.7
%
Product Development
83.3
8.3
%
69.6
6.0
%
Advertising
82.8
8.3
%
77.6
6.7
%
Amortization of Intangibles
23.1
2.3
%
27.1
2.3
%
Selling, Distribution and
Administration
317.1
31.7
%
307.1
26.4
%
Operating Profit
17.9
1.8
%
120.0
10.3
%
Interest Expense
46.3
4.6
%
41.6
3.6
%
Other Expense (Income), Net
(7.4
)
-0.7
%
(1.8
)
-0.2
%
Earnings (Loss) before Income Taxes
(21.0
)
-2.1
%
80.2
6.9
%
Income Tax Expense
0.7
0.1
%
17.3
1.5
%
Net Earnings (Loss)
(21.7
)
-2.2
%
62.9
5.4
%
Net Earnings Attributable to
Noncontrolling Interests
0.4
0.0
%
1.7
0.1
%
Net Earnings (Loss) Attributable to
Hasbro, Inc.
$
(22.1
)
-2.2
%
$
61.2
5.3
%
Per Common Share
Net Earnings (Loss)
Basic
$
(0.16
)
$
0.44
Diluted
$
(0.16
)
$
0.44
Cash Dividends Declared
$
0.70
$
0.70
Weighted Average Number of Shares
Basic
138.6
139.3
Diluted
138.7
139.6
(1) Amounts may not sum due to
rounding
HASBRO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (1)
(Unaudited)
(Millions of Dollars)
Quarter Ended
April 2, 2023
March 27, 2022
Cash Flows from Operating Activities:
Net Earnings (Loss)
$
(21.7
)
$
62.9
Other Non-Cash Adjustments
181.9
179.3
Changes in Operating Assets and
Liabilities
(71.4
)
(107.5
)
Net Cash Provided by Operating
Activities
88.8
134.7
Cash Flows from Investing Activities:
Additions to Property, Plant and
Equipment
(53.2
)
(29.2
)
Other
(2.4
)
5.3
Net Cash Utilized by Investing
Activities
(55.6
)
(23.9
)
Cash Flows from Financing Activities:
Proceeds from Long-Term Debt
1.2
1.3
Repayments of Long-Term Debt
(35.5
)
(133.9
)
Net (Repayments of) Proceeds from
Short-Term Borrowings
(7.7
)
103.3
Stock-Based Compensation Transactions
—
70.2
Dividends Paid
(96.7
)
(94.5
)
Payments Related to Tax Withholding for
Share-Based Compensation
(14.0
)
(19.3
)
Other
(3.9
)
(4.6
)
Net Cash Utilized by Financing
Activities
(156.6
)
(77.5
)
Effect of Exchange Rate Changes on
Cash
(3.5
)
5.4
Net (Decrease) Increase in Cash and Cash
Equivalents
(126.9
)
38.7
Cash and Cash Equivalents at Beginning of
Year
513.1
1,019.2
Cash and Cash Equivalents at End of
Period
$
386.2
$
1,057.9
(1) Amounts may not sum due to
rounding
HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
SEGMENT RESULTS - AS REPORTED AND AS
ADJUSTED (5)
(Unaudited)
(Millions of Dollars)
Operating
Results
Quarter Ended April 2,
2023
Quarter Ended March 27,
2022
As Reported
Non-GAAP Adjustments
Adjusted
As Reported
Non-GAAP Adjustments
Adjusted
% Change
Total Company
Results
External Net Revenues (1)
$
1,001.0
$
—
$
1,001.0
$
1,163.1
$
—
$
1,163.1
-14
%
Operating Profit (1)
17.9
29.3
47.2
120.0
21.8
141.8
-67
%
Operating Margin
1.8
%
2.9
%
4.7
%
10.3
%
1.9
%
12.2
%
EBITDA
72.4
26.3
98.7
174.0
18.1
192.1
-49
%
Segment
Results
Consumer
Products:
External Net Revenues (2)
$
520.4
$
—
$
520.4
$
672.8
$
—
$
672.8
-23
%
Operating Profit (Loss)
(46.0
)
10.6
(35.4
)
8.6
10.3
18.9
>-100%
Operating Margin
-8.8
%
2.0
%
-6.8
%
1.3
%
1.5
%
2.8
%
EBITDA
(11.5
)
6.9
(4.6
)
41.3
7.5
48.8
>-100%
Wizards of the Coast
and Digital Gaming:
External Net Revenues (3)
$
295.2
$
—
$
295.2
$
262.8
$
—
$
262.8
12
%
Operating Profit
76.8
—
76.8
106.4
—
106.4
-28
%
Operating Margin
26.0
%
—
26.0
%
40.5
%
—
40.5
%
EBITDA
81.2
5.2
86.4
107.6
4.6
112.2
-23
%
Entertainment:
External Net Revenues (4)
$
185.4
$
—
$
185.4
$
227.5
$
—
$
227.5
-19
%
Operating Profit (Loss)
(8.7
)
6.2
(2.5
)
12.2
8.8
21.0
>-100%
Operating Margin
-4.7
%
3.3
%
-1.3
%
5.4
%
3.9
%
9.2
%
EBITDA
3.5
4.6
8.1
25.9
5.5
31.4
-74
%
Corporate and
Other:
Operating Profit (Loss)
$
(4.2
)
$
12.5
$
8.3
$
(7.2
)
$
2.7
$
(4.5
)
>100%
EBITDA
(0.8
)
9.6
8.8
(0.8
)
0.5
(0.3
)
>100%
(1) Effective in the first quarter of
2023, the Company is realigning our brand portfolios to correspond
with the Blueprint 2.0 strategy. Net Revenues by Brand Portfolio
below have been restated to present net revenues and operating
profit under the realigned structure.
Net Revenues
Quarter Ended
April 2, 2023
March 27, 2022
% Change
Net Revenues by
Brand Portfolio
Franchise Brands (a)
$
613.4
$
650.4
-6
%
Partner Brands
132.7
206.5
-36
%
Portfolio Brands
92.0
112.6
-18
%
Non-Hasbro Branded Film & TV
162.9
193.6
-16
%
Total
$
1,001.0
$
1,163.1
Operating Profit
(Loss)
Adjusted Operating Profit
(Loss)
Quarter Ended
Quarter Ended
April 2, 2023
March 27, 2022
% Change
April 2, 2023
March 27, 2022
% Change
Operating Profit
(Loss) and Adjusted Operating Profit (Loss) by Brand Portfolio
(i)
Franchise Brands (a)
$
61.6
$
142.5
-57
%
$
69.9
$
152.3
-54
%
Partner Brands
(13.2
)
(5.6
)
>-100%
(13.2
)
(5.6
)
>-100%
Portfolio Brands
(10.8
)
1.7
>-100%
(6.2
)
6.0
>-100%
Non-Hasbro Branded Film & TV
(15.5
)
(11.4
)
-36
%
(11.6
)
(6.4
)
-81
%
Total
$
22.1
$
127.2
$
38.9
$
146.3
(i) Operating Profit (Loss) by Brand
Portfolio excludes Corporate and Other. For the quarter ended April
2, 2023, and quarter ended March 27, 2022 there was an Operating
Loss of $4.2 and $7.2, respectively, relating to unallocated
Corporate and Other expenses. Adjusted Operating Profit (Loss) for
Corporate and Other was $8.3 for the quarter ended April 2, 2023
and ($4.5) for the quarter ended March 27, 2022, respectively.
Adjusted measures exclude certain non-GAAP adjustments. See
"Reconciliation of Non-GAAP Financial Measures" for Adjusted
Operating Profit.
(a) Franchise Brands include: DUNGEONS
& DRAGONS, Hasbro Gaming, MAGIC: THE GATHERING, NERF, PEPPA
PIG, PLAY-DOH and TRANSFORMERS.
Net Revenues
Quarter Ended
April 2, 2023
March 27, 2022
% Change
MAGIC: THE GATHERING
$
229.1
$
197.2
16
%
Hasbro Total Gaming (b)
386.5
378.8
2
%
(b) Hasbro Total Gaming includes all
gaming revenue, most notably DUNGEONS & DRAGONS, MAGIC: THE
GATHERING and Hasbro Gaming.
Net Revenues
Quarter Ended
April 2, 2023
March 27, 2022
% Change
(2)
Consumer Products Segment Net Revenues by
Major Geographic Region
North America
$
279.1
$
405.2
-31
%
Europe
131.6
176.7
-26
%
Asia Pacific
63.3
52.2
21
%
Latin America
46.4
38.7
20
%
Total
$
520.4
$
672.8
Quarter Ended
April 2, 2023
March 27, 2022
% Change
(3)
Wizards of the Coast and Digital Gaming Net
Revenues by Category
Tabletop Gaming
$
217.9
$
192.2
13
%
Digital and Licensed Gaming
77.3
70.6
9
%
Total
$
295.2
$
262.8
Quarter Ended
April 2, 2023
March 27, 2022
% Change
(4)
Entertainment Segment Net Revenues by
Category
Film and TV
$
168.4
$
190.2
-11
%
Family Brands
17.0
23.2
-27
%
Music and Other
—
14.1
-100
%
Total
$
185.4
$
227.5
(5) Amounts within this section may not
sum due to rounding
HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(Unaudited)
(Millions of Dollars)
Reconciliation of
Adjusted Operating Profit (1)
Quarter Ended
April 2, 2023
March 27, 2022
Operating Profit (Loss)
$
17.9
$
120.0
Consumer Products
(46.0
)
8.6
Wizards of the Coast and Digital
Gaming
76.8
106.4
Entertainment
(8.7
)
12.2
Corporate and Other
(4.2
)
(7.2
)
Non-GAAP Adjustments (2)
$
29.3
$
21.8
Consumer Products
10.6
10.3
Entertainment
6.2
8.8
Corporate and Other
12.5
2.7
Adjusted Operating Profit
(Loss)
$
47.2
$
141.8
Consumer Products
(35.4
)
18.9
Wizards of the Coast and Digital
Gaming
76.8
106.4
Entertainment
(2.5
)
21.0
Corporate and Other
8.3
(4.5
)
(2) Non-GAAP Adjustments include the
following:
Acquisition-related costs (i)
$
1.9
$
2.7
Acquired intangible amortization (ii)
16.8
19.1
Operational Excellence charges (iii)
Transformation office and consultant
fees
10.6
—
Total
$
29.3
$
21.8
(1) Amounts may not sum due to
rounding
(i) In association with the Company's
acquisition of eOne, the Company incurred stock compensation
expenses of $1.9 ($1.7 after-tax) in the quarter ended April 2,
2023, and $2.7 ($2.3 after-tax) in the quarter ended March 27,
2022. The expense is included within Selling, Distribution and
Administration.
(ii) Represents intangible amortization
costs related to the intangible assets acquired in the eOne
acquisition. The Company has allocated certain of these intangible
amortization costs between the Consumer Products and Entertainment
segments, to match the revenue generated from such intangible
assets.
(iii) Program related transformation
office and consultant fees of $10.6 ($8.1 after-tax) for the
quarter ended April 2, 2023, are included within Selling,
Distribution and Administration within the Corporate and Other
segment.
HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(Unaudited)
(Millions of Dollars)
Reconciliation of
EBITDA and Adjusted EBITDA (1)
Quarter Ended
April 2, 2023
March 27, 2022
Net Earnings (Loss) Attributable to
Hasbro, Inc.
$
(22.1
)
$
61.2
Interest Expense
46.3
41.6
Income Tax Expense
0.7
17.3
Net Earnings Attributable to
Noncontrolling Interests
0.4
1.7
Depreciation
24.0
25.1
Amortization of Intangibles
23.1
27.1
EBITDA
$
72.4
$
174.0
Non-GAAP Adjustments and Stock
Compensation (2)
26.3
18.1
Adjusted EBITDA
$
98.7
$
192.1
(2) Non-GAAP Adjustments and Stock
Compensation are comprised of the following:
Stock compensation
$
15.7
$
18.1
Operational Excellence charges
10.6
—
Total
$
26.3
$
18.1
Adjusted EBITDA by Segment:
Consumer Products
$
(4.6
)
$
48.8
Wizards of the Coast and Digital
Gaming
86.4
112.2
Entertainment
8.1
31.4
Corporate and Other
8.8
(0.3
)
Total Adjusted EBITDA
$
98.7
$
192.1
Consumer Products:
Operating Profit (Loss)
$
(46.0
)
$
8.6
Other Income
8.5
0.8
Depreciation
12.1
13.9
Amortization of Intangibles
13.9
18.0
EBITDA
$
(11.5
)
$
41.3
Non-GAAP Adjustments and Stock
Compensation
6.9
7.5
Adjusted EBITDA
$
(4.6
)
$
48.8
Wizards of the Coast and Digital
Gaming:
Operating Profit
$
76.8
$
106.4
Other Expense
(0.5
)
(0.7
)
Depreciation
3.0
1.9
Amortization of Intangibles
1.9
—
EBITDA
$
81.2
$
107.6
Non-GAAP Adjustments and Stock
Compensation
5.2
4.6
Adjusted EBITDA
$
86.4
$
112.2
Entertainment:
Operating Profit (Loss)
$
(8.7
)
$
12.2
Other Income
3.6
1.9
Depreciation
1.9
2.8
Amortization of Intangibles
6.7
9.0
EBITDA
$
3.5
$
25.9
Non-GAAP Adjustments and Stock
Compensation
4.6
5.5
Adjusted EBITDA
$
8.1
$
31.4
(1) Amounts may not sum due to
rounding
HASBRO, INC.
SUPPLEMENTAL FINANCIAL DATA
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(Unaudited)
(Millions of Dollars and Shares, Except
Per Share Data)
Reconciliation of
Net Earnings and Earnings per Share (1)
Quarter Ended
(all adjustments reported after-tax)
April 2, 2023
Diluted Per Share
Amount
March 27, 2022
Diluted Per Share
Amount
Net Earnings (Loss) Attributable to
Hasbro, Inc.
$
(22.1
)
$
(0.16
)
$
61.2
$
0.44
Acquisition and related costs
1.7
0.01
2.3
0.02
Acquired intangible amortization
13.3
0.10
15.9
0.11
Operational Excellence charges
8.1
0.06
—
—
Net Earnings Attributable to Hasbro, Inc.,
as Adjusted
$
1.0
$
0.01
$
79.4
$
0.57
(1) Amounts may not sum due to
rounding
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230426005602/en/
Investors: Debbie Hancock | Hasbro, Inc. | (401) 727-5401 |
debbie.hancock@hasbro.com Media: Abby Hodes | Hasbro, Inc. | (646)
734-6426 | abby.hodes@hasbro.com
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