Market Overview - U.S. stocks have shown strong performance in August, continuing a two and a half year upward trend, but volatility has returned in September, historically the worst month for U.S. stocks [1][2] Federal Reserve and Interest Rates - Recent labor market weakness has increased expectations for a potential interest rate cut by the Federal Reserve in September, with a 97.6% probability of a 25 basis-point cut indicated by the CME FedWatch tool [3] Recommended Growth Stocks - Five growth stocks are recommended for September, all of which have delivered double-digit returns in the past three months: Amphenol Corp. (APH), AppLovin Corp. (APP), Hasbro Inc. (HAS), Micron Technology Inc. (MU), and Robinhood Markets Inc. (HOOD) [4][8] Amphenol Corp. (APH) - Amphenol specializes in connectivity solutions utilizing AI and machine learning, with a strong portfolio in high-density, high-speed connectors and interconnect systems [6][9] - The company commands an estimated 33% market share in AI/data center interconnects, benefiting from rising demand in hyperscale data centers and 5G deployments [9][10] - Expected revenue and earnings growth rates for the current year are 41.5% and 59.8%, respectively, with a 1.3% improvement in earnings estimates over the past 30 days [12] AppLovin Corp. (APP) - AppLovin operates a software platform for mobile app developers, enhancing marketing and monetization, and has seen significant growth due to its AI engine, Axon 2.0 [13][14] - The company is targeting a 20-30% year-over-year growth rate, primarily driven by its gaming segment and AI-driven ad monetization [16][17] - Expected revenue and earnings growth rates for the current year are 16.7% and 97.6%, respectively, with a 1.8% improvement in earnings estimates over the past 30 days [17] Hasbro Inc. (HAS) - Hasbro focuses on high-margin segments and strategic partnerships to drive growth, with digital gaming and licensing projected to contribute about 25% of revenues by 2027 [18][19] - The company has raised its full-year revenue and adjusted EBITDA guidance, with expected revenue and earnings growth rates of 6.6% and 21.5%, respectively [20] Micron Technology Inc. (MU) - Micron is a leader in the AI infrastructure boom, driven by demand for high-bandwidth memory solutions, particularly in data centers [21][22] - The company is diversifying its revenue base by focusing on resilient verticals like automotive and enterprise IT, with expected revenue and earnings growth rates of 33.9% and 60.8%, respectively [23][24] Robinhood Markets Inc. (HOOD) - Robinhood operates a financial services platform allowing users to trade various assets, with expectations for improved trading revenues due to higher retail market participation [25][26] - The company has an expected revenue and earnings growth rate of 35.8% and 42.2%, respectively, with a 2% improvement in earnings estimates over the past 30 days [27]

Market Overview - Wall Street has continued its bull run in 2025, with the S&P 500 recording 20 all-time highs year to date, including five in August alone [1] - Historically, September is the worst-performing month for U.S. equities, with an average decline of 0.7% since 1950, and a more pronounced average decline of 2% over the last 10 years [2] Investment Recommendations - It is advisable to invest in low-beta, high-yielding stocks with a favorable Zacks Rank, including Assurant Inc. (AIZ), Hasbro Inc. (HAS), The Mosaic Co. (MOS), Virtu Financial Inc. (VIRT), and Houlihan Lokey Inc. (HLI), all of which have a Zacks Rank 1 (Strong Buy) [3][10] Assurant Inc. (AIZ) - Assurant is focused on both inorganic and organic growth strategies, expecting adjusted EBITDA to increase modestly in 2025, driven by improved performance in Global Housing and growth in Global Lifestyle [13] - The company has an expected revenue growth rate of 5.7% and an earnings growth rate of 5.8% for the current year, with a Zacks Consensus Estimate for earnings improving by 7.6% over the last 30 days [15] Hasbro Inc. (HAS) - Hasbro is concentrating on high-margin segments such as Wizards, Licensing, and Digital, which are expected to support bottom-line growth [16] - The company anticipates that digital gaming and licensing partnerships will contribute about 25% of corporate revenues by 2027, with an expected revenue growth rate of 6.6% and an earnings growth rate of 21.5% for the current year [19] The Mosaic Co. (MOS) - The Mosaic is expected to benefit from higher demand for fertilizers, with strong grower economics and crop commodity prices driving global fertilizer demand [20] - The company has an expected revenue growth rate of 16.4% and an earnings growth rate of 60.1% for the current year, with a Zacks Consensus Estimate for earnings improving by 13.2% over the last 30 days [22] Virtu Financial Inc. (VIRT) - Virtu Financial's diversified business model supports sustainable long-term growth, with ongoing cost-control initiatives improving adjusted net margins [24] - The company has an expected revenue growth rate of 18.9% and an earnings growth rate of 33.8% for the current year, with a Zacks Consensus Estimate for earnings improving by 17.9% over the last 60 days [25] Houlihan Lokey Inc. (HLI) - Houlihan Lokey is a global investment bank specializing in mergers and acquisitions, capital solutions, and financial advisory services [26] - The company has an expected revenue growth rate of 13.1% and an earnings growth rate of 21.9% for the current year, with a Zacks Consensus Estimate for earnings improving by 6.7% over the last 60 days [27]

Company Performance - Hasbro's stock closed at $79.75, down 1.76%, underperforming the S&P 500's daily loss of 0.69% [1] - Prior to the recent trading session, Hasbro shares had gained 5.57%, lagging behind the Consumer Discretionary sector's gain of 6.08% and outperforming the S&P 500's gain of 3.79% [1] Upcoming Earnings - The upcoming earnings release is projected to show an EPS of $1.64, indicating a 5.20% decline compared to the same quarter last year [2] - Revenue is estimated at $1.33 billion, reflecting a 3.85% increase from the equivalent quarter last year [2] Full Year Estimates - For the full year, analysts expect earnings of $4.87 per share and revenue of $4.41 billion, representing changes of +21.45% and +6.64% respectively from last year [3] - Recent revisions in analyst estimates suggest optimism regarding Hasbro's business and profitability [3] Zacks Rank and Valuation - Hasbro currently holds a Zacks Rank of 1 (Strong Buy), with a proven track record of outperformance [5] - The Forward P/E ratio for Hasbro is 16.65, which is a premium compared to the industry average of 11.34 [5] Industry Metrics - The Toys - Games - Hobbies industry, part of the Consumer Discretionary sector, holds a Zacks Industry Rank of 12, placing it in the top 5% of over 250 industries [7] - The average PEG ratio for the Toys - Games - Hobbies industry is 1.64, while Hasbro's PEG ratio is 1.05 [6]

Core Viewpoint - Hasbro's recent earnings report shows a mixed performance with a decline in revenues but an increase in earnings, leading to raised full-year guidance despite macroeconomic challenges [2][3][10]. Financial Performance - In Q2 fiscal 2025, Hasbro reported adjusted EPS of $1.3, exceeding the Zacks Consensus Estimate of 78 cents, and up from $1.22 in the prior year [4]. - Net revenues were $980.8 million, beating the consensus mark of $877.3 million, but down 1% from $995.3 million in the previous year [4]. - Adjusted EBITDA was $302 million, compared to $313.5 million a year ago [7]. Segment Performance - Consumer Products segment revenues decreased 16% year over year to $442.4 million, although it beat expectations due to strong licensing revenues [5]. - The Wizards of the Coast and Digital Gaming segment saw revenues increase by 16% to $522.4 million, with an adjusted operating margin of 46.3% [6]. - The Entertainment segment's revenues fell 15% to $16 million, with an adjusted operating margin of 63.1% [6]. Guidance and Outlook - Hasbro raised its full-year revenue guidance, now expecting mid-single-digit growth on a constant currency basis, up from slight growth expectations [10]. - Adjusted operating margin is now anticipated to be between 22% and 23%, and adjusted EBITDA is expected to be in the range of $1.17-$1.2 billion, an increase from prior estimates [10]. Balance Sheet Highlights - As of June 29, 2025, cash and cash equivalents were $546.9 million, down from $626.8 million a year ago, while inventories increased to $417.1 million from $357.6 million [9]. - Long-term debt decreased to $3.32 billion from $3.46 billion year over year [9]. Market Sentiment - Estimates for Hasbro have trended upward recently, contributing to a Zacks Rank of 1 (Strong Buy), indicating expectations for above-average returns in the coming months [11][13].

Financial Data and Key Metrics Changes - Group like-for-like net fees decreased by 11% to £972 million, with pre-exceptional operating profit down 56% to £45.6 million [6][15][29] - Cash from operations increased by 14% to £128.3 million, ending the year with a cash position of £37 million [15][25] - Pre-exceptional earnings per share decreased by 67% to 1.31p, driven by lower operating profit and higher finance charges [16][24] Business Line Data and Key Metrics Changes - Temporary and contracting fees decreased by 7%, while permanent fees decreased by 17% [6][17] - Consultant net fee productivity increased by 5%, with enterprise solutions net fees growing by 8% [7][33] - In Germany, like-for-like net fees declined by 10%, while the UK and Ireland saw a 15% decline [8][10] Market Data and Key Metrics Changes - The US market showed strong performance with a 38% increase in net fee productivity [12][34] - In Rest of World, like-for-like net fees declined by 8%, with the US delivering strong growth [12][13] - Italy, Poland, and Spain reported positive growth in net fees, with Italy growing by 29% [40][41] Company Strategy and Development Direction - The company is focused on a five-lever strategy to increase exposure to high-potential markets and improve operational resilience [4][32] - Plans to deliver an additional £45 million in structural cost savings by FY 2029, building on previous savings [21][42] - Continued investment in technology and data to enhance productivity and client service [43][44] Management Comments on Operating Environment and Future Outlook - Management noted ongoing economic and political uncertainty affecting business confidence and recruitment markets [3][47] - The company expects to see improved performance in EMEA, particularly in France, but recovery timelines are uncertain [62][63] - Current trading in July and August is in line with expectations, with no significant changes in trading momentum [30][31] Other Important Information - The company has restructured its operations, closing offices and reducing headcount to improve profitability [22][29] - A full pension buy-in has been completed, significantly reducing future cash flow requirements related to pension contributions [27][70] - The final dividend proposed is 0.29p per share, reflecting a cautious approach to capital allocation amid uncertain trading conditions [28][70] Q&A Session Summary Question: CapEx spend for fiscal 2026 - The increase in CapEx is driven by technology investments and is expected to continue at a higher level over the next few years [53][54] Question: Job flow and conversion metrics - Currently, there is a 25% drop in placements, but pricing improvements are helping to mitigate this decline [56] Question: Expected performance improvement in EMEA - Recovery in EMEA is anticipated, but the timeline for profitability is uncertain, particularly in France [62][63] Question: Cash performance and expectations for FY 2026 - Cash performance was strong in FY 2025, but restructuring costs and increased CapEx may impact cash levels in FY 2026 [66][70] Question: Cost-saving program details - The company aims to achieve £45 million in additional structural cost savings, with significant progress expected in the next twelve months [76][78] Question: Temp and contracting business capacity - The company is satisfied with current consultant headcount levels but is shifting resources within countries to optimize productivity [81]

Financial Performance - Group net fees decreased by 11% to £972.4 million[10], while operating profit decreased by 56% to £45.6 million[10] - Basic Earnings Per Share (EPS) decreased by 67%[49] - The company delivered approximately £35 million per annum of structural cost savings in FY25[10, 66, 69, 113] Regional Performance - Germany's net fees decreased by 10% to £308.9 million[12], representing 32% of the Group's net fees[12] - UK & Ireland's net fees decreased by 15% to £192.2 million[21], accounting for 20% of the Group's net fees[21], with an operating loss of £(5.8) million[21] - Australia & New Zealand's net fees decreased by 13% to £116.2 million[29], contributing 12% to the Group's net fees[29] - Rest of World's net fees decreased by 8% to £355.1 million[35], making up 36% of the Group's net fees[35] Segment Performance - Temp & Contracting net fees decreased by 7%[10], while Perm net fees decreased by 17%[10] - Temp & Contracting accounted for 62% of Group net fees in FY25[111] Operational Efficiency - Consultant headcount was reduced by 14% year-over-year[10, 65], leading to a 5% increase in consultant net fee productivity[10, 67] - The company closed 29 offices as part of operational restructurings[65]

Core Viewpoint - Hasbro's stock has shown strong performance, with a 5.8% increase over the past month and a 43.7% gain since the start of the year, outperforming both the Zacks Consumer Discretionary sector and the Zacks Toys - Games - Hobbies industry [1] Financial Performance - Hasbro has consistently exceeded earnings expectations, reporting an EPS of $1.3 against a consensus estimate of $0.78 in its last earnings report [2] - For the current fiscal year, Hasbro is projected to achieve earnings of $4.79 per share on revenues of $4.37 billion, reflecting a 19.45% increase in EPS and a 5.67% increase in revenues [3] - The next fiscal year forecasts earnings of $5.14 per share on revenues of $4.58 billion, indicating a year-over-year change of 7.4% in EPS and 4.91% in revenues [3] Valuation Metrics - Hasbro's stock trades at 16.8 times current fiscal year EPS estimates, which is above the peer industry average of 11.3 times [7] - On a trailing cash flow basis, the stock trades at 14.5 times compared to the peer group's average of 7.7 times [7] - The stock has a PEG ratio of 1.06, which does not place it among the top tier of stocks from a value perspective [7] Zacks Rank - Hasbro holds a Zacks Rank of 1 (Strong Buy) due to a favorable earnings estimate revision trend [8] - The company meets the criteria for investors looking for stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B, suggesting potential for further gains [8]

Economic Overview - U.S. stocks have experienced a rally due to impressive economic data, leading to optimism among investors regarding potential Federal Reserve interest rate cuts [1][8] - Expectations for a rate cut in September increased after inflation data showed a slower-than-expected rise [2][8] Inflation Data - The consumer price index (CPI) rose 0.2% month-over-month in July, lower than the consensus estimate of 0.3% [4] - Year-over-year, CPI increased by 2.7% in July, also below the expected 2.8% [5] - Core CPI, excluding food and energy, rose 0.3% in July, aligning with expectations, while year-over-year core CPI increased by 3.1%, slightly above the 3% forecast [5][6] Consumer Discretionary Stocks - Investing in consumer discretionary stocks is recommended due to the favorable economic outlook and anticipated rate cuts [2][11] - Notable consumer discretionary stocks include: - **The Walt Disney Company (DIS)**: Expected earnings growth rate of 17.7% for the current year, with revenues of $91.4 billion in fiscal 2024 [9][10] - **Carnival Corporation & plc (CCL)**: Expected earnings growth rate of 40.9% for the current year [12][13] - **Hasbro, Inc. (HAS)**: Expected earnings growth rate of 19.5% for the current year [14] - **Netflix, Inc. (NFLX)**: Expected earnings growth rate of 31.4% for the current year [15][16] - **Ralph Lauren Corporation (RL)**: Expected earnings growth rate of 19.8% for the current year [17]

Core Insights - The report highlights the strong performance of overseas IP leaders, with significant revenue growth in the IP-related sector [2][3][4] - Disney's experience business showed resilience, with total revenue increasing by 2% year-on-year to $23.7 billion, and operating profit rising by 8% to $4.6 billion in Q3 FY25 [2] - Sanrio reported a remarkable 49% year-on-year revenue growth in Q1 FY26, with revenue from the China region doubling [3] - Bandai Namco achieved a steady revenue increase of 7.1% year-on-year in Q1 FY26, driven by strong performance from its IPs [3] - CyberAgent's media and IP business saw a 10.9% year-on-year revenue growth in Q3 FY25, with significant profit increases in both media/IP and gaming sectors [4] Company Summaries - **Disney**: In Q3 FY25, the entertainment segment generated $10.7 billion in revenue (up 1% year-on-year), while the experience segment saw an 8% increase to $9.1 billion [2] - **Sanrio**: For Q1 FY26, the company reported revenue of 43.1 billion yen (up 49% year-on-year) and a net profit of 14.19 billion yen (up 38%) [3] - **Bandai Namco**: The company recorded revenue of 300.43 billion yen in Q1 FY26, with a net profit of 38.33 billion yen, reflecting a 12.6% year-on-year increase [3] - **CyberAgent**: The company achieved revenue of 210.78 billion yen in Q3 FY25, with a net profit of 8.24 billion yen, marking a 46.6% year-on-year increase [4] - **Hasbro**: In Q2 FY25, Hasbro reported revenue of $981 million, a slight decline of 1% year-on-year, with the Wizards segment growing by 16% [5] - **Mattel**: The company generated $1.019 billion in revenue in Q2 FY25, down 6% year-on-year, with mixed performance across different product categories [6] - **DeNa**: In Q1 FY25, DeNa's revenue reached 41.7 billion yen, a 23% year-on-year increase, with a significant rise in gaming revenue [7]

Investment Rating - The industry investment rating is "Increase Holding" [7] Core Viewpoints - Recent financial reports from overseas IP leaders show growth in IP-related revenues [2] - The overall market capitalization of the industry is 16,817.42 billion yuan, with a circulating market value of 15,402.81 billion yuan [3] - The report highlights strong performance from key companies such as Bubble Mart, which has a projected EPS growth from 0.81 yuan in 2023 to 5.45 yuan in 2026, and a PE ratio decreasing from 316 in 2023 to 47 in 2026 [1] Summary by Relevant Sections Key Company Status - Bubble Mart: Current stock price is 278.0 yuan, with EPS projected to grow from 0.81 yuan in 2023 to 5.45 yuan in 2026, and a PE ratio decreasing from 316 to 47 [1] - Damai Entertainment: Current stock price is 1.2 yuan, with EPS projected to grow from 0.02 yuan in 2023 to 0.05 yuan in 2026, and a PE ratio decreasing from 54 to 22 [1] - Shanghai Film: Current stock price is 36.5 yuan, with EPS projected to grow from 0.28 yuan in 2023 to 0.73 yuan in 2026, and a PE ratio decreasing from 130 to 50 [1] - Zhongwen Online: Current stock price is 25.3 yuan, with EPS projected to recover from -0.33 yuan in 2024 to 0.09 yuan in 2026, and a PE ratio decreasing from 222 to 281 [1] - Rongxin Culture: Current stock price is 25.6 yuan, with EPS projected to recover from -0.53 yuan in 2024 to 0.47 yuan in 2026, and a PE ratio decreasing from 214 to 55 [1] Market Trends - Disney's total revenue increased by 2% year-on-year to 23.7 billion USD, with the entertainment sector generating 10.7 billion USD [5] - Sanrio reported a 49% year-on-year revenue increase to 430.97 billion JPY, with a 120% increase in revenue from the Chinese market [5] - CyberAgent's revenue grew by 10.9% year-on-year to 210.78 billion JPY, driven by strong performance in media and IP businesses [6] - Hasbro's Wizards segment saw a 16% revenue increase, primarily due to growth in the Magic: The Gathering franchise [6] - DeNa's gaming business maintained high growth, with a 23% year-on-year revenue increase to 417 billion JPY [6]