Earnings Results: • Revenue of $757 million, down 24% year-over-year; down 9% excluding E1 divestiture impact • Adjusted operating profit of $149 million with 19.6% operating margin, up 15 points year-over-year • Adjusted EPS of $0.61, driven by improved operating profit, stock compensation adjustment, and reduced interest expense • Operating cash flow improved by $89 million to $178 million
Future Guidance: • Reaffirming initial 2024 guidance • Wizards segment revenue expected to be down 3-5% with operating margin of 38-40% • Consumer Products revenue expected to be down 7-12% with operating margin of 4-6% • Total Hasbro EBITDA expected to be $925 million to $1 billion • Ending cash expected to be slightly down vs 2023
Hasbro reported Q1 2024 results that demonstrated early progress in its turnaround strategy. While revenue declined, this was largely expected and the company saw strength in its digital licensing and MAGIC: THE GATHERING businesses. Margins significantly improved, driven by cost savings initiatives, supply chain productivity gains, and favorable business mix.
The company is cautiously optimistic about the rest of the year. Consumer Products saw POS momentum late in Q1 that has continued into April, though headwinds remain from reduced closeout sales and a light entertainment slate compared to 2023. Hasbro is seeing positive impact from shifting more marketing spend to digital and improving marketing effectiveness. The Wizards segment is expected to have a solid Q2 with key MAGIC releases.
Overall, Hasbro reiterated its full-year guidance, preferring to monitor progress further before making any upward revisions despite the strong Q1 margin performance. The company is focused on executing its Blueprint 2.0 strategy by driving profitable growth in games and digital licensing, improving the financial profile of Consumer Products through cost savings and product innovation, and investing in key brands and entertainment initiatives.
Notable quotes: “We are applying a franchise-first mindset. We’re realizing our brands’ potential through licensing with success across digital and consumer products. And we’re continuing to invest in innovation across toys and games, appealing to consumers of all ages across play patterns.” - Chris Cocks, CEO
”I am pleased with how we executed in the first quarter strength in digital licensing and MAGIC contribute to our profitable business mix while our turnaround efforts in toys started to take shape.” - Gina Goetter, CFO