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01/10 15:43
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call revealed strong financial performance, particularly in the Wizards of the Coast segment, and an increase in shareholder returns. Despite some uncertainties in tariff impacts and cost management for upcoming projects like EXODUS, the overall guidance was optimistic with raised EBITDA and strong product momentum. The Q&A highlighted robust growth strategies and stable pricing, which are likely to positively influence the stock price in the short term.
Net Revenue $1.4 billion, up 8% year-over-year, driven by double-digit growth in Wizards and steady execution across Consumer Products.
Adjusted Operating Profit $356 million, up 8% year-over-year, with an adjusted operating margin of 25.6%, holding steady despite increased cost pressure.
Adjusted Earnings Per Diluted Share (EPS) $1.68, down 3% year-over-year, driven by a higher tax rate and FX impacts.
Wizards Revenue $572 million, up 42% year-over-year, with MAGIC revenue increasing 55% to $459 million, driven by engagement with Universes Beyond sets, core IP Edge of Eternities, and momentum across Secret Lair and backlist products.
Wizards Operating Profit $252 million, up 39% year-over-year, delivering a 44% operating margin, reflecting the positive benefit of scale and mix within the MAGIC portfolio.
Consumer Products Revenue $797 million, down 7% year-over-year, with growth in Europe offsetting softer performance in North America.
Consumer Products Adjusted Operating Profit $89 million, with an 11.2% margin compared to 15.1% last year, primarily impacted by tariff expense and unfavorable mix, offset in part by productivity improvements.
Entertainment Segment Revenue $19 million, up 8% year-over-year, with an adjusted operating margin of 61%, consistent with the asset-light model.
Year-to-Date Total Hasbro Revenue Up 7% year-over-year, driven by growth in MAGIC and sequential improvement in Consumer Products.
Year-to-Date Adjusted Operating Profit Increased 14% year-over-year, reflecting the strength of a diversified portfolio and transformation efforts.
Year-to-Date Adjusted EBITDA $989 million, up 11% year-over-year, demonstrating the combined impact of top-line growth, operational excellence, and disciplined investment.
Year-to-Date Operating Cash Flow $490 million, with $294 million returned to shareholders via dividends and $120 million spent on debt reduction.
MAGIC: Achieved 40% growth year-to-date, driven by new player acquisition and collaborations with brands like Spider-Man and Final Fantasy. Future collaborations include Teenage Mutant Ninja Turtles, The Hobbit, Star Trek, and Marvel Superheroes.
D&D: Refreshed 2024 editions of D&D books off to a strong start. Virtual tabletop launch increased weekly traffic by nearly 50%.
Digital Gaming: Monopoly Go! and SORRY! WORLD are performing well. Upcoming sci-fi RPG EXODUS to be showcased at the Game Awards.
Consumer Products: New products like Nano-mals, DJ Furby, baby Evie, and Star Wars Lightsaber Forge Kyber are gaining traction. Collaboration with Netflix's KPop Demon Hunters announced.
Retail Expansion: New vendor and manufacturing partnerships to expand retail footprint globally, including Bodegas in Santiago and Dollar stores in Peoria.
Supply Chain Diversification: By 2026, no single country outside the U.S. will represent more than 1/3 of Hasbro's supply chain.
Cost Transformation: Achieved $150 million in gross savings year-to-date, driving margin resilience and enabling reinvestment in growth areas.
Tariff Mitigation: Proactive measures to address tariff impacts, maintaining a $60 million impact assumption for 2025.
Playing to Win Strategy: Focus on diversified digital initiatives, strategic partnerships, and resilience against external pressures.
Capital Allocation: Maintaining a quarterly dividend of $0.70 per share and achieving a 2.5x leverage target by year-end.
Tariff Expenses: The company is facing significant tariff expenses, particularly with a 30% tariff rate from China and 20% from Vietnam, which is expected to impact the 2025 P&L by $60 million.
Supply Chain Diversification: Efforts to diversify the supply chain are ongoing, but the company is still exposed to risks from concentrated sourcing, with 30% of toy and game revenue expected to come from China by 2026.
Retailer Shifts: Delayed on-shelf days from retailers have pushed some revenue into Q4, creating short-term revenue challenges.
Consumer Products Margin Decline: Margins in the Consumer Products segment have declined due to tariff expenses and unfavorable product mix, despite productivity improvements.
Economic and Trade-Related Headwinds: The company is navigating trade-related headwinds and higher royalty costs, which are impacting profitability.
Geographic Revenue Concentration: The company remains exposed to geographic revenue concentration risks, with 30% of revenue expected to be based in the U.S. by 2026.
Revenue Growth: Anticipate full year revenue growth in the high single digits for 2025. Wizards segment revenue is expected to grow between 36% to 38% for the full year, driven by MAGIC's strong performance.
Operating Profit: Adjusted operating profit growth is expected to exceed 20% for 2025. Adjusted operating margin guidance is raised to 22%-23% for the full year.
MAGIC: The Gathering: Momentum expected to continue into Q4 and 2026 with new releases and collaborations, including Teenage Mutant Ninja Turtles, The Hobbit, Star Trek, and Marvel Superheroes. Full year revenue growth for MAGIC is projected at 36%-38% with an operating margin of approximately 44%.
Consumer Products: Revenue is expected to decline 5%-8% year-over-year for 2025, with margins between 4%-6%. Anticipate a solid Q4 bounce back driven by innovation, entertainment tie-ins, and strategic partnerships.
Supply Chain Diversification: By year-end 2026, no single country outside the U.S. will represent more than 1/3 of Hasbro's supply chain. New vendor and manufacturing partnerships are expected to unlock attractive pricing opportunities globally.
Digital Gaming: New announcements expected at the December Game Awards, including updates on the sci-fi RPG EXODUS. Continued focus on innovative digital play experiences.
Capital Allocation: On track to achieve a 2.5x leverage target by the end of 2025. Board declared a quarterly dividend of $0.70 per share.
Quarterly Dividend: The Board has declared a quarterly dividend of $0.70 per share, consistent with the company's capital allocation priorities to return cash to shareholders.
The earnings call revealed strong financial performance, particularly in the Wizards of the Coast segment, and an increase in shareholder returns. Despite some uncertainties in tariff impacts and cost management for upcoming projects like EXODUS, the overall guidance was optimistic with raised EBITDA and strong product momentum. The Q&A highlighted robust growth strategies and stable pricing, which are likely to positively influence the stock price in the short term.
The earnings call summary reveals strong financial performance, particularly in the Wizards segment with a 16% revenue growth and a 46.3% margin. The success of the Final Fantasy set, exceeding expectations, indicates strong demand and potential for sustained sales. Despite some concerns about tariffs and inventory levels, the company's strategic partnerships and product launches are promising. The Q&A section highlights positive analyst sentiment, especially regarding the MAGIC segment's growth. Overall, the financial performance and optimistic guidance suggest a positive stock price movement in the short term.
Hasbro's earnings call indicates strong financial performance, with significant EPS and revenue growth driven by key products like Magic and MonopolyGo. The company has a solid cost savings plan and is diversifying its supply chain to mitigate tariff impacts. Despite some market unpredictability, management's optimistic outlook and strategic partnerships, like with Mattel, support a positive sentiment. The Q&A showed management's proactive approach to challenges, reinforcing confidence in their strategy. Overall, these factors suggest a positive stock price movement over the next two weeks.
The earnings call summary reveals strong financial performance, particularly in the Wizards segment with impressive revenue and margin growth. Despite some concerns raised in the Q&A about tariffs and supply chain diversification, management's proactive approach to mitigating risks and maintaining strong brand partnerships provides reassurance. The positive financial metrics, including increased EBITDA and debt reduction, alongside the optimistic guidance and strategic cost savings plan, outweigh the minor concerns, leading to a positive sentiment. The market is likely to react favorably, with a potential 2% to 8% stock price increase.
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