G.I. Joe, Furby, and Play-Doh were second quarter heroes for Hasbro.
On the surface, an 18% decline in revenue and a 20% drop in Consumer Products sales don’t look good, but for Hasbro, these Q2 numbers reflect changes in the business amid a positive outlook and strengthening of the company’s core focus leading to updated full-year guidance.
The Rhode Island-based toy and game maker reported revenue of $995 million in Q2 as it turned a profit compared to a loss in the same quarter last year. The bulk of the revenue loss came from the exit of the eOne business and a shift in entertainment timing. Excluding this, revenue dipped 6%. Wizards of the Coast and Digital Gaming grew 20% in Q2.
We delivered a solid performance in games and digital licensing and substantial margin improvement this quarter. Hasbro is emerging as a more profitable, agile, and operationally excellent company delighting fans of all ages through the magic of play."
In the Consumer Products segment, Hasbro says that Furby, Play-Doh, and G.I. Joe performed well in the quarter and that it looks forward to growth in Beyblade and Transformers in the back half of the year. Beyblade is in the midst of an extensive update led by Beyblade X while September’s theatrical release of the Josh Cooley (Toy Story 4)-directed Transformers One is set to reinvigorate the Transformers brand amid its 40th anniversary celebration.
The launch of Magic: The Gathering’s Modern Horizons 3 set and growth in Licensing and Digital Gaming revenue behind Monopoly Go! and Baldur’s Gate 3 fueled the 20% revenue spike in the Wizards of the Coast and Digital Gaming Segment. The company also notes that Magic drove a 3% gain in tabletop gaming revenue while operating profit spiked 74%.
While the Entertainment segment saw revenue fall off a cliff — a 90% drop — post-eOne, it swung to an operating loss of $1 million compared to $324 million during Q2 last year.
By the Numbers:
Operating profit was $212 million with a 21.3% margin, including $37 million in intangible amortization related to eOne. Adjusted operating profit rose to $249 million, with a 25% margin, driven by a favorable business mix, supply chain productivity, and reduced costs. The company achieved $40 million in net cost savings and approximately $90 million year to date, aiming to meet its full-year savings goal. Hasbro’s inventory fell 51% from the previous year, with Consumer Products inventory down 55%. Reported net earnings were $0.99 per diluted share, with adjusted net earnings of $1.22 per share. The company raised its full-year guidance and paid $97 million in cash dividends to shareholders. The Board of Directors has declared a quarterly cash dividend of $0.70 per common share payable on September 4, 2024, to shareholders of record at the close of business on August 21, 2024.
Hasbro leadership will host an earnings call this morning. Stay tuned for updates…
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