NASDAQ$HAS

Hasbro Inc · Q2 2023 earnings

Q2 2023 earnings · · Investor relations

Briefing

Reported a solid second quarter with revenue ahead of expectations, significant inventory reduction, and progress in transformation and cost savings programs.

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%.

Headline financials

Total Revenue

$1.21B

Previous: $1.34B-9.6%
EPS (adj)

$0.49

Previous: $1.15-57.4%
Adj. operating margin

11.3%

Previous: 18.0%-37.2%
Capital Expenditures

-$112M

Previous: -$75.8M-47.9%
Free Cash Flow

-$347M

Previous: $66.2M-624.3%
Net Income

-$235M

Previous: $142M-265.5%
Operating Income

-$189M

Previous: $219M-186.1%
Gross Profit

$858M

Previous: $928M-7.5%
Cash & Equivalents

$217M

Previous: $628M-65.5%
Total Assets

$8.61B

Previous: $9.5B-9.4%
Stock-Based Comp

$20.9M

Previous: $24.9M-16.1%

Revenue & EPS history

Hasbro · Revenue · Quarterly

$1.21B

Q2 2023-9.6%vs Q2 2022
Beat estimate in 10 of 15 quarters(67%)
ActualEstimate

Revenue by segment

Hasbro · $834M total across 2 segments · Q2 2023

  • Consumer Products
    $655M-10.8%
  • Entertainment
    $179M-3.2%

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.

Tailwinds

  • 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.

Headwinds

  • 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.
  • The 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 announced sale of select entertainment assets.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 19 quarterly earnings reports · overlaid with Q2 2023

Historical avgQ2 2023

+2.0%

Avg return

Earnings day

+1.4%

Avg return

5 days after

-0.1%

Avg return

30 days after

64%

44 / 69 earnings

Positive

+17.1%

Q1 2019

Best reaction

-17.3%

Q3 2019

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+1.4%-9.2%-13.3%
Q4 2025+7.5%+5.9%-1.7%
Q3 2025+3.7%+3.7%+5.4%
Q2 2025-1.0%-1.6%+5.5%
Q1 2025+14.6%+16.9%+24.9%
Q4 2024+13.0%+12.1%-0.9%
Q3 2024-5.6%-6.7%-11.1%
Q2 2024+7.5%+10.2%+14.5%
Q1 2024+11.7%+10.6%+4.3%
Q4 2023+2.7%-1.0%+3.3%
Q3 2023-16.3%-17.5%-15.7%
Q2 2023-1.0%+2.0%+13.1%
Q1 2023+15.2%+13.9%+16.8%
Q4 2022+1.7%-3.4%-17.8%
Q3 2022-4.2%-3.3%-13.7%
Q2 2022+2.4%+2.2%+4.0%
Q1 2022+6.2%+5.3%+3.9%
Q4 2021-1.7%+0.5%-4.2%
Q3 2021+6.9%+8.2%+12.3%
Q2 2021+9.7%+7.6%+6.5%
Q1 2021+1.0%+2.5%-1.1%
Q4 2020-6.7%-6.0%-0.5%
Q3 2020-7.5%-10.1%+0.2%
Q2 2020-6.7%-6.2%+2.4%
Q1 2020-7.3%-11.3%-5.6%
Q4 2019-2.7%-3.2%-46.7%
Q3 2019-17.3%-20.1%-20.6%
Q2 2019+12.3%+14.0%+5.4%
Q1 2019+17.1%+16.4%+11.1%
Q4 2018-1.5%-0.3%-3.5%
Q3 2018-4.1%-5.4%-3.9%
Q2 2018+7.6%+7.9%+7.0%
Q1 2018+4.2%+5.5%+6.0%
Q4 2017+2.7%+2.9%-2.6%
Q3 2017-5.3%-1.1%-3.2%
Q2 2017-8.3%-8.8%-19.0%
Q1 2017+5.8%+3.2%+8.3%
Q4 2016+14.9%+18.2%+17.9%
Q3 2016+6.9%+8.7%+12.0%
Q2 2016-5.2%-6.0%-5.2%
Q1 2016+5.6%
Q4 2015-2.9%
Q3 2015-6.2%
Q2 2015+2.8%
Q1 2015+11.6%
Q4 2014+10.5%
Q3 2014+7.2%
Q2 2014-2.9%
Q1 2014+1.3%
Q4 2013+4.6%
Q3 2013+5.8%
Q2 2013+5.4%
Q1 2013+6.1%
Q4 2012+4.4%
Q3 2012-5.8%
Q4 2011+3.1%
Q2 2012+3.3%
Q1 2012+1.6%
Q3 2011+2.7%
Q2 2011-0.7%
Q1 2010+0.8%
Q1 2011-1.0%
Q4 2010-2.2%
Q4 2008-2.2%
Q3 2009+0.2%
Q3 2010+0.2%
Q4 2009+3.0%
Q2 2009+3.0%
Q2 2010+3.0%

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