Financial Performance - Net revenues for Hasbro in 2023 were $5,003.3 million, a decrease of 15% from $5,856.7 million in 2022, with a favorable foreign currency translation impact of $20.6 million[234]. - Operating losses in 2023 were $1,538.8 million, representing 30.8% of net revenues, compared to an operating profit of $407.7 million, or 7.0% of net revenues in 2022[234]. - Net losses attributable to Hasbro, Inc. were $1,489.3 million in 2023, or $10.73 per diluted share, compared to net earnings of $203.5 million, or $1.46 per diluted share in 2022[240]. - Consolidated net revenues for the year ended December 31, 2023, declined 15% to $5,003.3 million from $5,856.7 million in 2022, with a favorable foreign currency translation impact of $20.6 million[248]. - The overall operating profit for the company was a loss of $1,538.8 million in 2023, compared to a profit of $407.7 million in 2022[282]. Segment Performance - The Consumer Products segment saw a 19% decline in net revenues to $2,886.4 million, while the Wizards of the Coast and Digital Gaming segment increased by 10% to $1,457.6 million[234]. - The Entertainment segment experienced a 31% decline in net revenues to $659.3 million in 2023[234]. - Franchise Brands net revenues decreased 3% in 2023 to $3,256.5 million, primarily due to lower sales from NERF, Hasbro Gaming, and PLAY-DOH products, partially offset by increases from DUNGEONS & DRAGONS and TRANSFORMERS[253]. - Partner Brands portfolio net revenues declined 35% in 2023 to $687.8 million, driven by lower sales from DISNEY FROZEN and DISNEY PRINCESS products due to expired license agreements[254]. - The Consumer Products segment net revenues fell 19% in 2023 to $2,886.4 million, while the Wizards of the Coast & Digital Gaming segment grew 10% to $1,457.6 million[266]. Impairment Charges - Non-cash goodwill and asset impairment charges in 2023 totaled $1,278.2 million, or $9.20 per diluted share, primarily related to the eOne Film and TV business and Family Brands[243]. - The Company incurred net charges of $253.0 million related to the strategic review and Blueprint 2.0 strategy shift, including $231.9 million in net asset impairments[247]. - A net charge of $116.1 million was recorded for the sale of eOne's music business, including a non-cash goodwill impairment charge of $108.8 million[247]. - The Company recorded a non-cash goodwill impairment charge of $231.2 million for its Film and TV reporting unit due to the impact of strikes, resulting in delayed production and lower cash flow forecasts[381]. - The Company recorded a non-cash goodwill impairment charge of $960.0 million for the Family Brands reporting unit, reflecting a strategic shift and lower profitability forecasts for the PJ MASKS franchise[382]. Strategic Initiatives - Hasbro's strategic plan, referred to as Blueprint 2.0, focuses on fewer, bigger, and more profitable brands while investing in direct-to-consumer relationships and digital gaming[233]. - The company is pursuing a franchise-first approach to enhance brand experiences through licensing and digital games[233]. - Hasbro's operational savings initiatives include supply chain transformation aimed at improving operating results and reinvesting in the business[233]. - The Company announced an Operational Excellence program, incurring net charges of $89.2 million, including $79.8 million in severance expenses[247]. Cash Flow and Liquidity - In 2023, Hasbro generated $725.6 million in cash from operating activities, an increase from $372.9 million in 2022, but a decrease from $817.9 million in 2021[355]. - Net cash flows provided by investing activities were $117.6 million in 2023, compared to a net cash outflow of $313.0 million in 2022 and inflow of $242.0 million in 2021, primarily due to $329.6 million from the sale of the eOne Film and TV Business[356]. - The company expects to meet its working capital needs for 2024 through available cash, cash flows from operations, and potential borrowings, including a repayment of $500.0 million in long-term debt due in November 2024[344]. - As of December 31, 2023, the company's cash and cash equivalents totaled $545.4 million, reflecting a 6% increase from $513.1 million in 2022[345]. Inventory and Assets - Inventories decreased by 51% in 2023 to $332.0 million, due to efforts to reduce retail inventory levels and improve inventory quality[348]. - Accounts receivable, net decreased by 9% in 2023 to $1,029.3 million, driven by the sale of the eOne Film and TV business and lower revenues[347]. - Other assets decreased by 46% in 2023 to $862.0 million, largely due to the removal of long-term asset balances from the sale of the eOne Film and TV business[350]. - The Company's inventory levels decreased by 51% in 2023 compared to 2022, reflecting efforts to reduce retail inventory while improving quality[406]. Expenses and Liabilities - Total operating expenses as a percentage of net revenues increased in 2023, with cost of sales at 34.1%, program cost amortization at 9.0%, and royalties at 8.6%[303]. - Interest expense increased to $186.3 million in 2023 from $171.0 million in 2022, primarily due to higher interest rates on variable-rate loans[329]. - The Company has a total liability of $103.3 million related to the Tax Act, with $45.9 million due in 2024 and $57.4 million as the final installment due in 2025[345]. - The Company has a liability of $47.4 million related to potential tax, interest, and penalties for uncertain tax positions as of December 31, 2023[396]. Market and Economic Factors - Inflation significantly impacted the Company's operations in 2022 and 2023, potentially affecting consumer purchases and operational costs[409]. - The bankruptcy of a significant retailer could negatively impact the Company's future revenues[407]. - Revenue patterns from the Company's entertainment businesses fluctuate based on content release timing and popularity[408]. - The Company may need to implement price adjustments to mitigate the impact of inflation on its business operations[409].
Hasbro(HAS) - 2023 Q4 - Annual Report