Hasbro(US:HAS)2023-05-02 16:00Revenue Performance - First quarter 2023 net revenues decreased 14% to $1.0 billion compared to the first quarter of 2022, with an unfavorable foreign currency translation impact of $15.8 million[109] - Consumer Products segment net revenues declined 23% to $520.4 million, while Wizards of the Coast and Digital Gaming segment net revenues increased 12% to $295.2 million[109] - Franchise Brands net revenues decreased 6% to $613.4 million, driven by lower net revenues from NERF, MONOPOLY, PLAY-DOH, and PEPPA PIG products, partially offset by higher net revenues from MAGIC: THE GATHERING, DUNGEONS & DRAGONS, and TRANSFORMERS[118] - Partner Brands net revenues decreased 36% to $132.7 million, primarily due to lower sales of DISNEY FROZEN, DISNEY PRINCESS, MARVEL, STAR WARS, and BEYBLADE products[120] - Portfolio Brands net revenues decreased 18% to $92.0 million, driven by lower net revenues from PJ MASKS and BABY ALIVE products, partially offset by higher net revenues from GI JOE products[121] - Non-Hasbro Branded Film & TV net revenues decreased 16% to $162.9 million, driven by lower net revenues from film production deliveries and unscripted programming, partially offset by higher net revenues from scripted programming[122] - Consumer Products segment net revenues declined 23% to $520.4 million in Q1 2023, driven by lower sales of NERF, PLAY-DOH, DISNEY PRINCESS, DISNEY FROZEN, MARVEL, and STAR WARS products, partially offset by higher sales of TRANSFORMERS, GI JOE, and DUNGEON & DRAGONS products[125][126] - Wizards of the Coast and Digital Gaming segment net revenues increased 12% to $295.2 million in Q1 2023, driven by higher net revenues from MAGIC: THE GATHERING and D&D Beyond[130][131] - Entertainment segment net revenues declined 19% to $185.4 million in Q1 2023, primarily due to lower unscripted television and film production net revenues, partially offset by higher scripted net revenues from deliveries such as The Rookie season five[134][135] Operating Profit and Loss - Operating profit for the first quarter of 2023 was $17.9 million, or 1.8% of net revenues, compared to $120.0 million, or 10.3% of net revenues, in the first quarter of 2022[109] - Consumer Products segment operating loss was $46.0 million in Q1 2023, compared to operating profit of $8.6 million in Q1 2022, driven by lower net revenues and higher closeout sales and sales allowances[127] - Wizards of the Coast and Digital Gaming segment operating profit decreased to $76.8 million in Q1 2023, compared to $106.4 million in Q1 2022, driven by higher product development costs and administrative expenses[132] - Entertainment segment operating loss was $8.7 million in Q1 2023, compared to operating profit of $12.2 million in Q1 2022, driven by lower net revenues and higher advertising expense[136][137] - Corporate and Other segment operating losses improved to $4.2 million in Q1 2023, compared to $7.2 million in Q1 2022, driven by lower administrative expenses[138] Net Earnings and Loss - Net loss attributable to Hasbro, Inc. was $22.1 million, or $(0.16) per share, in the first quarter of 2023 compared to net earnings of $61.2 million, or $0.44 per diluted share, in the first quarter of 2022[109] - Income tax expense for Q1 2023 was $0.7 million on a pre-tax loss of $21.0 million, compared to $17.3 million on a pre-tax income of $80.2 million in Q1 2022[151] Cost Management and Savings - The company expects to deliver $250 million to $300 million in run-rate cost savings by the end of 2025 through its Operational Excellence program, with $35 million realized in the first quarter of 2023[102] - The company announced a workforce reduction of approximately 1,000 positions, or 15% of global full-time employees, in alignment with its Operational Excellence program[105] - Cost of sales decreased to $285.3 million in Q1 2023, driven by lower sales volumes and cost savings from the Operational Excellence Program[140] - Product development expense increased to $83.3 million in Q1 2023, driven by higher investments in Wizards of the Coast tabletop and digital gaming initiatives[143] - Advertising expense increased to $82.8 million in Q1 2023, driven by advertising costs for Dungeons & Dragons: Honor Among Thieves and D&D Beyond[144] Cash Flow and Financial Position - The company's cash and cash equivalents totaled $386.2 million as of April 2, 2023, with $13.4 million restricted under production financing facilities[162] - Accounts receivable decreased 26% to $685.2 million as of April 2, 2023, compared to $931.7 million as of March 27, 2022[166] - Inventories increased 11% to $713.4 million as of April 2, 2023, driven by higher inventory balances in the Wizards of the Coast and Digital Gaming segment[167] - Prepaid expenses and other current assets increased 21% to $754.4 million as of April 2, 2023, primarily due to higher accrued royalty and licensing balances[168] - Other assets increased 25% to $1,604.3 million as of April 2, 2023, driven by higher capitalized film and television production balances[169] - Accounts payable and accrued liabilities decreased 7% to $1,653.9 million as of April 2, 2023, due to lower accounts payable balances and improved supply chain conditions[170] - Net cash provided by operating activities in Q1 2023 was $88.8 million, a decrease of $45.9 million compared to Q1 2022[174] - Net cash utilized for investing activities in Q1 2023 was $55.6 million, reflecting increased investments in digital gaming initiatives[175] - Dividends paid in Q1 2023 totaled $96.7 million, compared to $94.5 million in Q1 2022[177] Debt and Financing - The Company has a commercial paper program with a maximum aggregate principal amount of $1.0 billion, with no outstanding borrowings as of April 2, 2023[179][180] - The Company has a revolving credit agreement with a maximum aggregate principal amount of $1.5 billion, with no borrowings outstanding as of April 2, 2023, and $4.0 million in letters of credit outstanding[181] - The Company has fully repaid the $400.0 million Three-Year Tranche of its Term Loan Facilities and has repaid $320.0 million of the $600.0 million Five-Year Tranche as of April 2, 2023[182] - The Company issued $2.4 billion of senior unsecured debt securities in November 2019, with $300.0 million of 2022 Notes repaid in full during the third quarter of 2021[183] - The Company has a revolving production financing facility with a maximum aggregate principal amount of $250.0 million, with $183.5 million in outstanding borrowings as of April 2, 2023[184][185] - The Company has $3.8 billion in long-term debt as of April 2, 2023, with $109.0 million due within the current year[186] - The Company has $13.4 million in letters of credit and $331.7 million in purchase commitments outstanding as of April 2, 2023[187] - The Company has $241.6 million remaining under its share repurchase authorizations, with no share repurchases made during the first quarter of 2023[188] - The Company has hedged a portion of its forecasted foreign currency transactions, with net unrealized losses of $2.0 million on derivatives as of April 2, 2023[192][193] - The Company has $3.8 billion in fixed-rate long-term debt, with deferred losses of $14.7 million related to interest rate swaps as of April 2, 2023[194]