Hasbro(HAS) - 2025 Q1 - Quarterly Results

Executive Summary / Company Overview Hasbro reported strong Q1 2025 financial results with significant revenue and profit growth, driven by strategic shifts and key segment performance, while maintaining its full-year outlook Introduction Hasbro, Inc. reported strong financial results for Q1 2025, including growth in revenue, operating profit, and net earnings, and announced a quarterly dividend - Hasbro, Inc. (NASDAQ: HAS) reported Q1 2025 financial results, with growth in revenue, operating profit, and net earnings[1] First Quarter 2025 Highlights Hasbro's Q1 2025 revenue grew 17%, primarily driven by a 46% increase in the Wizards and Digital Gaming segment, with significant growth in operating profit and EPS reflecting a favorable business mix and profitability Key Financial Highlights for Q1 2025 | Metric | Q1 2025 | Change | | :-------------------------------- | :------ | :----- | | Total Revenue | +17% | | | Wizards and Digital Gaming Revenue | +46% | | | Consumer Products Revenue | -4% | (Exceeded expectations) | | Operating Profit | $171M | | | Operating Profit Margin | 19.2% | | | Adjusted Operating Profit | $222M | +$74M | | Adjusted Operating Profit Margin | 25.1% | +5.5 percentage points | | Diluted EPS | $0.70 | | | Adjusted Diluted EPS | $1.04 | | | Operating Cash Flow | $138M | ($178M in prior year) | | Returned to Shareholders | $98M | (Dividends) | | Debt Reduction | $50M | | | Tariff Impact | No significant impact | (Due to timing of implementation) | - Monopoly Go! contributed $39 million in revenue this quarter[6] CEO and CFO Commentary CEO Chris Cocks highlighted the success of the "Playing to Win" strategy, rigorous execution, and key partnerships, while CFO Gina Goetter noted strong revenue and profit growth from a strategic shift to higher-margin businesses, with Wizards and licensing strength offsetting tariff pressures - CEO Chris Cocks stated that the "Playing to Win" strategy is yielding results in a challenging environment, with the company performing well through rigorous execution, collaboration with outstanding partners like Disney, and investments for the future[2] - CFO Gina Goetter noted strong Q1 revenue growth and significant profit improvement, driven by a strategic shift to higher-margin businesses, with the strength of the Wizards business, licensing, and an asset-light model continuing to offset tariff pressures and support margins[3] Segment Performance Hasbro's Q1 2025 performance was driven by exceptional growth in Wizards of the Coast and Digital Gaming, offsetting a slight decline in Consumer Products and an operating loss in Entertainment Wizards of the Coast and Digital Gaming This segment was a primary growth driver, with revenue increasing 46% and operating profit up 87%, primarily fueled by Magic: The Gathering (tabletop and ARENA), digital and licensed games, and Dungeons & Dragons Wizards of the Coast and Digital Gaming Segment Performance | Metric | Q1 2025 | Q1 2024 | Change % | | :-------------------------- | :------ | :------ | :------- | | External Net Revenue | $462.1M | $316.3M | 46% | | Operating Profit | $230.0M | $122.8M | 87% | | Operating Profit Margin | 49.8% | 38.8% | +11.0 percentage points | Wizards of the Coast and Digital Gaming Segment Revenue by Category | Category | Q1 2025 Revenue | Q1 2024 Revenue | Change % | | :---------------------- | :-------------- | :-------------- | :------- | | Tabletop Games | $343.8M | $228.2M | 51% | | Digital and Licensed Games | $118.3M | $88.1M | 34% | | Magic: The Gathering | $346.3M | $237.9M | 46% | | Total Hasbro Gaming | $550.1M | $408.0M | 35% | - Growth was primarily driven by strong performance in Magic: The Gathering (both tabletop and ARENA), along with continued momentum in digital and licensed games and Dungeons & Dragons[6] Consumer Products The Consumer Products segment saw a 4% revenue decrease but exceeded expectations due to strong licensing performance; despite a negative operating profit margin, the adjusted margin improved by 1.4 percentage points, benefiting from lower operating expenses Consumer Products Segment Performance | Metric | Q1 2025 | Q1 2024 | Change % | | :-------------------------- | :------ | :------ | :------- | | External Net Revenue | $398.3M | $413.0M | -4% | | Operating Profit (Loss) | $(43.9)M | $(46.9)M | 18% (Improvement) | | Operating Profit Margin | -11.0% | -11.4% | +0.4 percentage points | | Adjusted Operating Profit Margin | -7.8% | -9.2% | +1.4 percentage points | - Revenue decreased by 4% but exceeded expectations due to strong licensing performance[13] - Key brands including MARVEL, BEYBLADE, TRANSFORMERS, MONOPOLY, and licensed products all achieved growth[13] Consumer Products Segment Net Revenue by Major Geographic Region | Geographic Region | Q1 2025 Revenue | Q1 2024 Revenue | Change % | | :---------------- | :-------------- | :-------------- | :------- | | North America | $231.4M | $239.1M | -3% | | Europe | $85.0M | $87.5M | -3% | | Asia Pacific | $53.8M | $48.8M | 10% | | Latin America | $28.1M | $37.6M | -25% | Entertainment The Entertainment segment's revenue decreased by 5% due to transaction timing, resulting in an operating loss of $11 million compared to a profit in the prior year, with adjusted operating profit also slightly down Entertainment Segment Performance | Metric | Q1 2025 | Q1 2024 | Change % | | :-------------------------- | :------ | :------ | :------- | | External Net Revenue | $26.7M | $28.0M | -5% | | Operating Profit (Loss) | $(11.2)M | $5.8M | (Shift from profit to loss) | | Adjusted Operating Profit | $17.4M | $18.2M | -4% | Entertainment Segment Net Revenue by Category | Category | Q1 2025 Revenue | Q1 2024 Revenue | Change % | | :------------- | :-------------- | :-------------- | :------- | | Film and TV | $4.3M | $0M | >100% | | Family Brands | $22.4M | $28.0M | -20% | - The 5% revenue decrease this quarter was related to the timing of transactions[13] Financial Outlook and Capital Allocation Hasbro reaffirms its 2025 financial guidance, prioritizing core business investment, balance sheet strengthening, and consistent shareholder returns through dividends 2025 Company Outlook Hasbro maintains its full-year 2025 guidance issued on February 20, citing uncertainty in the current tariff environment, with capital allocation priorities focused on investing in core businesses, strengthening the balance sheet to achieve leverage targets, and returning cash to shareholders - The company is not changing its full-year 2025 guidance issued on February 20, given the uncertainty in the current tariff environment[8] - The company's capital allocation priorities are to invest in its core businesses; strengthen its balance sheet and achieve its leverage targets; and return cash to shareholders[8] Dividend Announcement Hasbro paid $98 million in cash dividends to shareholders in Q1 and announced a quarterly cash dividend of $0.70 per share, payable on June 4, 2025, to shareholders of record as of May 21, 2025 - The company paid $98 million in cash dividends to shareholders in the first quarter[9] - The Board of Directors has declared a quarterly cash dividend of $0.70 per share, payable on June 4, 2025, to shareholders of record at the close of business on May 21, 2025[9] About Hasbro Hasbro is a leading global game, IP, and toy company with over a century of experience, committed to creating joy through play and consistently recognized for its strong corporate citizenship Company Profile Hasbro is a leading game, IP, and toy company dedicated to creating joy and community through the magic of play, leveraging over 100 years of expertise to unlock value from new and existing IPs across various entertainment forms to reach global audiences - Hasbro is a leading game, IP, and toy company with a mission to create joy and community through the magic of play, boasting over 100 years of expertise[11] - Through its Franchise-First strategy, Hasbro unlocks value from new and existing IPs such as Magic: The Gathering, Dungeons & Dragons, MONOPOLY, Hasbro Gaming, NERF, TRANSFORMERS, PLAY-DOH, and Peppa Pig, as well as major partner brands[12] Corporate Citizenship For over a decade, Hasbro has consistently received recognition for its corporate citizenship, including being named one of 3BL Media's "100 Best Corporate Citizens" and a "2025 Industry Leader" by JUST Capital - Hasbro has consistently received recognition for its corporate citizenship for over a decade[13] - Recognitions include being named one of 3BL Media's '100 Best Corporate Citizens' and a '2025 Industry Leader' by JUST Capital[13][14] Financial Statements Hasbro's Q1 2025 financial statements show increased net revenue, operating profit, and net earnings, alongside changes in cash flow and a strengthened balance sheet with reduced liabilities Condensed Consolidated Balance Sheets As of March 30, 2025, Hasbro's total assets were $6.0782 billion, a slight decrease from March 31, 2024, with total liabilities also decreasing while total shareholders' equity increased Condensed Consolidated Balance Sheets (Millions of US Dollars) | Metric | March 30, 2025 | March 31, 2024 | | :--------------------------- | :------------- | :------------- | | Cash and Cash Equivalents | $621.1 | $570.2 | | Total Current Assets | $1,953.7 | $1,995.4 | | Total Assets | $6,078.2 | $6,203.0 | | Total Current Liabilities | $1,142.3 | $1,792.2 | | Long-Term Debt | $3,331.5 | $2,966.9 | | Total Liabilities | $4,880.7 | $5,173.1 | | Total Shareholders' Equity | $1,197.5 | $1,029.9 | Consolidated Statements of Operations In Q1 2025, Hasbro's net revenue was $887.1 million, a significant increase from Q1 2024, with operating profit and net earnings attributable to Hasbro also growing substantially, leading to higher diluted EPS Consolidated Statements of Operations (Millions of US Dollars) | Metric | Q1 2025 | Q1 2024 | As a % of Net Revenue (Q1 2025) | As a % of Net Revenue (Q1 2024) | | :--------------------------- | :------ | :------ | :-------------------------- | :-------------------------- | | Net Revenue | $887.1 | $757.3 | 100.0% | 100.0% | | Total Costs and Expenses | $716.4 | $641.1 | 80.8% | 84.7% | | Operating Profit | $170.7 | $116.2 | 19.2% | 15.3% | | Earnings Before Income Taxes | $136.6 | $81.0 | 15.4% | 10.7% | | Net Earnings | $99.5 | $59.1 | 11.2% | 7.8% | | Net Earnings Attributable to Hasbro, Inc. | $98.6 | $58.2 | 11.1% | 7.7% | | Diluted Earnings Per Share | $0.70 | $0.42 | | | | Cash Dividends Declared | $0.70 | $0.70 | | | Condensed Consolidated Statements of Cash Flows Net cash provided by operating activities decreased to $138.1 million in Q1 2025 from $177.8 million in Q1 2024, primarily due to changes in operating assets and liabilities, while net cash used in investing and financing activities increased Condensed Consolidated Statements of Cash Flows (Millions of US Dollars) | Metric | Q1 2025 | Q1 2024 | | :--------------------------- | :------ | :------ | | Net Cash Provided by Operating Activities | $138.1 | $177.8 | | Net Cash Used in Investing Activities | $(52.4) | $(48.1) | | Net Cash Used in Financing Activities | $(162.4) | $(108.9) | | Net Increase (Decrease) in Cash and Cash Equivalents | $(73.9) | $24.8 | | Cash and Cash Equivalents at End of Period | $621.1 | $570.2 | Non-GAAP Financial Measures and Reconciliations Hasbro utilizes various non-GAAP metrics to provide a clearer view of underlying business performance by adjusting for specific non-recurring or non-operational items, enhancing transparency for investors Non-GAAP Measures Definition Hasbro uses several non-GAAP financial measures, including adjusted operating profit, adjusted operating profit margin, adjusted net earnings, adjusted diluted EPS, EBITDA, and adjusted EBITDA, which exclude specific items like acquisition-related intangible asset amortization, strategic transformation initiatives, restructuring, and severance costs, and business divestiture-related costs to provide a clearer view of underlying business performance - Non-GAAP measures include adjusted operating profit, adjusted operating profit margin, adjusted net earnings, adjusted diluted EPS, EBITDA, and adjusted EBITDA[18] - These measures exclude items such as acquisition-related intangible asset amortization, strategic transformation initiatives, restructuring and severance costs, business disposition losses, and costs related to the eOne film and TV business divestiture[18] - Management believes these adjusted metrics provide investors with insight into the underlying performance of the business, excluding the impact of non-recurring events, and reflect resources available for strategic opportunities[18] Reconciliation of EBITDA and Adjusted EBITDA Hasbro's EBITDA increased to $212.4 million in Q1 2025 from $157.8 million in Q1 2024, with adjusted EBITDA showing a more significant increase to $274.3 million, reflecting adjustments for share-based compensation, strategic transformation initiatives, restructuring, and divestiture-related costs Reconciliation of EBITDA and Adjusted EBITDA (Millions of US Dollars) | Metric | Q1 2025 | Q1 2024 | | :--------------------------- | :------ | :------ | | Net Earnings Attributable to Hasbro, Inc. | $98.6 | $58.2 | | EBITDA | $212.4 | $157.8 | | Adjusted EBITDA | $274.3 | $172.8 | - Adjustments to adjusted EBITDA for Q1 2025 include $18.4 million for share-based compensation, $7.2 million for strategic transformation initiatives, $5.9 million for restructuring and severance costs, $25.0 million for business disposition losses, and $5.4 million for costs related to the eOne film and TV business divestiture[27] Reconciliation of Adjusted Operating Profit Adjusted operating profit for Q1 2025 significantly increased to $222.4 million from $148.6 million in Q1 2024, with adjustments primarily accounting for acquisition-related intangible asset amortization, strategic transformation initiatives, restructuring costs, and divestiture-related expenses Reconciliation of Adjusted Operating Profit (Millions of US Dollars) | Metric | Q1 2025 | Q1 2024 | | :--------------------------- | :------ | :------ | | Operating Profit (Loss) | $170.7 | $116.2 | | Non-GAAP Adjustments | $51.7 | $32.4 | | Adjusted Operating Profit (Loss) | $222.4 | $148.6 | - Non-GAAP adjustments to operating profit for Q1 2025 include $12.4 million for acquisition-related intangible asset amortization, $7.2 million for strategic transformation initiatives, $5.9 million for restructuring and severance costs, $25.0 million for business disposition losses, and $1.2 million for costs related to the eOne film and TV business divestiture[28] Reconciliation of Net Earnings and EPS Adjusted net earnings attributable to Hasbro significantly increased to $147.0 million ($1.04 diluted EPS) in Q1 2025, up from $84.9 million ($0.61 diluted EPS) in Q1 2024, driven by multiple non-GAAP adjustments Reconciliation of Net Earnings and EPS (Millions of US Dollars, except per share data) | Metric | Q1 2025 | Diluted EPS (Q1 2025) | Q1 2024 | Diluted EPS (Q1 2024) | | :--------------------------- | :------ | :-------------------------- | :------ | :-------------------------- | | Net Earnings Attributable to Hasbro, Inc. | $98.6 | $0.70 | $58.2 | $0.42 | | Adjusted Net Earnings Attributable to Hasbro, Inc. | $147.0 | $1.04 | $84.9 | $0.61 | - Key adjustments to adjusted net earnings for Q1 2025 include $9.3 million for acquisition-related intangible asset amortization, $5.5 million for strategic transformation initiatives, $4.5 million for restructuring and severance costs, $25.0 million for business disposition losses, and $4.1 million for costs related to the eOne film and TV business divestiture[29][30] Forward-Looking Statements and Risks This section outlines Hasbro's forward-looking statements regarding future performance and strategies, emphasizing the inherent risks and uncertainties that could cause actual results to differ materially Forward-Looking Statement Safe Harbor This press release contains forward-looking statements regarding business strategy, product expectations, tariff impacts, cost savings, and financial targets, which are subject to various known and unknown risks and uncertainties, including the ability to execute strategies, market competition, tariff effects, global economic conditions, and reliance on third parties - This press release contains "forward-looking statements" regarding business strategies and plans, product, game, and entertainment expectations, anticipated impact of tariffs, cost savings, and financial targets and guidance[16] - Actual actions or results may differ materially from forward-looking statements due to known and unknown risks and uncertainties, including the ability to successfully implement and execute business strategies, competitive capabilities in the gaming industry, the imposition or threat of tariffs, global and regional economic conditions, and reliance on third-party relationships[16][19] - Additional risks include concentration of product manufacturing in China, success of key partner brands, ability to attract and retain talent, ability to achieve cost savings and efficiencies, asset and intellectual property protection, seasonality, product recalls, and changes in accounting treatment, tax laws, or regulations[19]