G.I. Joe, Furby, and Play-Doh are the heroes of Hasbro’s second season.
On the surface, an 18% revenue decline and a 20% decline in consumer product sales don’t look good, but for Hasbro, these second-quarter numbers reflect changes in the business, a positive outlook, and continued strengthening of the company’s core focus. Resulting in updated full-year guidance.
The Rhode Island-based toy and game maker reported second-quarter revenue of $995 million, swinging to a profit compared with a loss a year earlier. Most of the revenue loss comes from the exit of the eOne business and the shift in entertainment time. Excluding this, revenue fell 6%. Wizards of the Coast and Digital Gaming grew 20% in the second quarter.
We had strong performance in gaming and digital licensing this quarter, with significantly improved margins. Hasbro is becoming a more profitable, agile, and better-run company that delights fans of all ages through the magic of games."
—Chris Cocks, CEO, Hasbro
In consumer products, Hasbro said Furby, Play-Doh and GI Joe performed well in the quarter and looked forward to Beyblade and Transformers in the second half. Achieve growth. Beyblade is getting a massive update led by Beyblade X, and Josh Cooley hits theaters in September (toy story 4) Oriented Transformers One The Transformers brand will be reinvigorated as it celebrates its 40th anniversary.
The launch of the Magic: The Gathering Modern Horizons 3 set and the growth of licensing and digital gaming revenue Monopoly! “Baldur’s Gate 3” drove revenue growth for Wizards and the digital games division by 20%. The company also noted that Magic drove table game revenue up 3%, while operating profit soared 74%.
Although the entertainment division’s revenue fell off a cliff (down 90%) after eOne, operating losses swung from $324 million in the second quarter of last year to $1 million.
Looking at the numbers:
Operating profit was $212 million, a margin of 21.3%, including $37 million in intangible amortization related to eOne. Adjusted operating profit rose to $249 million, with a margin of 25%, driven by favorable business mix, supply chain productivity and cost reductions. The company achieved $40 million in net cost savings and has saved approximately $90 million year-to-date, aiming to meet its full-year savings targets. Hasbro’s inventory fell 51% from the previous year, with consumer goods inventories down 55%. Reported diluted net income per share was $0.99 and adjusted net income per share was $1.22. The company raised its full-year guidance and paid a $97 million cash dividend to shareholders. The Board of Directors has declared a quarterly cash dividend of $0.70 per common share to be paid on September 4, 2024 to shareholders of record as of the close of business on August 21, 2024.
Hasbro leadership will hold an earnings call this morning. Please stay tuned for updates…
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