Hasbro: EPS Surges, Revenue Falls

Core Insights - Hasbro reported stronger-than-expected earnings growth despite a revenue decline, indicating profitability improvements and a better-than-anticipated earnings per share (EPS) [1][2] - The adjusted EPS was $0.46, exceeding the expected$0.35 by 31.4%, while revenue was $1.10 billion, above the estimate of$1.035 billion but down 15% year-on-year [2][3] Financial Performance - Adjusted EPS for Q4 2024 was $0.46, a 21$0.38 in Q4 2023 [3] - Revenue decreased to $1.10 billion from$1.29 billion in Q4 2023, reflecting a 15% year-on-year decline [3] - The adjusted operating margin improved to 10.2%, up 14.1 percentage points from a negative 3.9% in the previous year [3] - Net earnings (adjusted) rose to $64.3 million, a 23$52.3 million in Q4 2023 [3] Business Overview - Hasbro is a leader in toy and board game manufacturing, with a diverse portfolio including brands like Magic: The Gathering, Dungeons & Dragons, and Monopoly [4] - The company is focusing on its Blueprint 2.0 initiative, which emphasizes operational efficiency, profitability through core brands, and a digital-first approach [5][6] Segment Performance - The Wizards of the Coast and Digital Gaming division saw a 20% rise in operating profit, despite a 7% revenue dip due to a slower release cycle [7] - The Consumer Products sector experienced a 12% annual revenue decline but improved its operating margin to 6.0% through cost-control measures [8] - The Entertainment division faced an 88% revenue drop due to the eOne divestiture, but the adjusted operating margin increased to 61.4% [9] Financial Health - Hasbro reduced its debt by $83 million to$3.38 billion and generated $587.6 million from operating activities, reflecting a focus on maintaining healthy cash flow [10] - The quarterly dividend of$0.70 per share remained unchanged, indicating a commitment to shareholder returns [10] Future Outlook - Management projects slight revenue growth in 2025, with an adjusted operating margin of 21%-22% and adjusted EBITDA expected between $1.1 billion and$1.15 billion [12] - The company aims to leverage strengths in gaming and digital channels, focusing on consumer engagement through direct platforms and digital offerings [13]