Hasbro(US:HAS)2025-02-27 21:09Revenue Performance - Consolidated net revenues for the year ended December 29, 2024, decreased 17.3% to $4,135.5 million from $5,003.3 million for the year ended December 31, 2023, primarily due to an 88% decline in the Entertainment segment[201]. - The Franchise Brands portfolio net revenues decreased 4% in 2024 compared to 2023, driven by lower revenues from NERF, DUNGEONS & DRAGONS, and TRANSFORMERS products[203]. - Partner Brands net revenues decreased 15% in 2024 compared to 2023, primarily due to lower revenues from STAR WARS and MARVEL products[204]. - Portfolio Brands net revenues decreased 17% in 2024 compared to 2023, mainly driven by lower revenues from POWER RANGERS, PJ MASKS, and BABY ALIVE products[205]. - Total net revenues decreased by 17% to $4,135.5 million in 2024 from $5,003.3 million in 2023[226]. - Consumer Products segment net revenues decreased by 12% to $2,543.9 million in 2024, primarily due to exited businesses and lower sales from key brands[227]. - Wizards of the Coast and Digital Gaming segment net revenues increased by 4% to $1,511.3 million in 2024, with a 22% increase in digital and licensed gaming[230]. - Entertainment segment net revenues plummeted by 88% to $80.3 million in 2024, largely due to the sale of the eOne Film and TV business[232]. Profitability and Earnings - Net earnings attributable to Hasbro, Inc. for 2024 were $385.6 million, compared to a loss of $1,489.3 million in 2023[200]. - Basic net earnings per common share for 2024 were $2.77, compared to a loss of $10.73 per share in 2023[200]. - Operating profit for the total company improved to $690.0 million in 2024 from an operating loss of $1,538.8 million in 2023[226]. - Total comprehensive earnings for 2024 were $340.7 million, compared to a loss of $1,435.9 million in 2023[291]. Costs and Expenses - Cost of sales decreased 30.9% to $1,179.5 million, or 28.5% of net revenues, for 2024 compared to $1,706.0 million, or 34.1% of net revenues, for 2023[208]. - Selling, distribution, and administration expenses decreased to $1,213.2 million, or 29.3% of net revenues in 2024, from $1,480.4 million, or 29.6% in 2023[217]. - Total costs and expenses for 2024 were $3,445.5 million, down from $6,542.1 million in 2023[288]. - Interest expense totaled $171.2 million in 2024, down from $186.3 million in 2023, primarily due to lower average outstanding borrowings[218]. - Interest income increased to $47.3 million in 2024 from $23.0 million in 2023, reflecting higher average interest rates and investments in short-term treasury bills[220]. - Other expense, net rose to $69.1 million in 2024 from $7.0 million in 2023, driven by an impairment loss of $78.2 million related to a joint venture investment[221]. Cash Flow and Capital Expenditures - Net cash provided by operating activities increased to $847.4 million in 2024 from $725.6 million in 2023, attributed to improved net earnings and lower investments in entertainment content[250]. - Cash and cash equivalents as of December 29, 2024, were $695.0 million, while long-term debt stood at $3,401.8 million[243]. - Net cash utilized for investing activities was $203.7 million in 2024, primarily due to $571.0 million in purchases of short-term investments[251]. - Financing activities resulted in a net cash outflow of $497.5 million in 2024, including $498.6 million from the issuance of senior unsecured debt securities[253]. - The company expects total cash capital expenditures in fiscal year 2025 to be between $225 million and $250 million[252]. Assets and Liabilities - Current assets decreased from $2,323.6 million in 2023 to $2,242.5 million in 2024, primarily due to changes in inventories and prepaid expenses[284]. - Total liabilities decreased from $5,453.9 million in 2023 to $5,155.3 million in 2024, reflecting a reduction in current liabilities[284]. - The Company’s long-term debt increased from $2,965.8 million in 2023 to $3,380.8 million in 2024, indicating a rise in financial leverage[284]. - The Company’s retained earnings increased from $2,188.4 million in 2023 to $2,274.2 million in 2024, showing positive growth in accumulated profits[284]. Strategic Initiatives and Market Conditions - The company completed the sale of its Entertainment One film and television business to Lionsgate on December 27, 2023, as part of its strategic realignment[303]. - The bankruptcy of significant retailers could negatively impact the Company's future revenues, highlighting the importance of retail partnerships[266]. - The Company is actively managing inventory levels to mitigate the risk of obsolescence and ensure adequate supply of new products[265]. - The Company continues to monitor consumer purchase patterns to adapt its inventory management strategies effectively[265]. - The company experienced significant inflation impacts during 2024, which may necessitate future price adjustments to mitigate operational costs[268]. Intellectual Property and Development - The company retains all Hasbro-branded content and will continue to develop and produce animation, digital shorts, scripted TV, and theatrical films related to core Hasbro IP following the sale of non-Hasbro branded productions[335]. - The company capitalizes costs related to the production of digital content and amortizes them using the individual-film-forecast method, with ultimate revenue estimates reviewed periodically[335]. - The company recognizes revenues from in-application purchases based on player usage patterns or estimated player life, with revenues from subscription services recognized ratably over the subscription term[333]. - The company enters into contracts to license its intellectual property, with revenues recorded based on sales-based or usage-based royalties, or minimum guarantees[329]. Miscellaneous - The company had a liability of $45.6 million for potential tax, interest, and penalties related to uncertain tax positions as of December 29, 2024[264]. - The company had fixed-rate long-term debt of $3,401.8 million as of December 29, 2024, with no interest rate swaps in place[262]. - Major customers, Wal-Mart and Amazon, accounted for 12% and 11% of consolidated net revenues in 2024, respectively, maintaining similar percentages from previous years[369].