Hasbro (HAS) Up 5.8% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Hasbro's recent earnings report shows a mixed performance with a decline in revenues but an increase in earnings, leading to raised full-year guidance despite macroeconomic challenges [2][3][10]. Financial Performance - In Q2 fiscal 2025, Hasbro reported adjusted EPS of $1.3, exceeding the Zacks Consensus Estimate of 78 cents, and up from $1.22 in the prior year [4]. - Net revenues were $980.8 million, beating the consensus mark of $877.3 million, but down 1% from $995.3 million in the previous year [4]. - Adjusted EBITDA was $302 million, compared to $313.5 million a year ago [7]. Segment Performance - Consumer Products segment revenues decreased 16% year over year to $442.4 million, although it beat expectations due to strong licensing revenues [5]. - The Wizards of the Coast and Digital Gaming segment saw revenues increase by 16% to $522.4 million, with an adjusted operating margin of 46.3% [6]. - The Entertainment segment's revenues fell 15% to $16 million, with an adjusted operating margin of 63.1% [6]. Guidance and Outlook - Hasbro raised its full-year revenue guidance, now expecting mid-single-digit growth on a constant currency basis, up from slight growth expectations [10]. - Adjusted operating margin is now anticipated to be between 22% and 23%, and adjusted EBITDA is expected to be in the range of $1.17-$1.2 billion, an increase from prior estimates [10]. Balance Sheet Highlights - As of June 29, 2025, cash and cash equivalents were $546.9 million, down from $626.8 million a year ago, while inventories increased to $417.1 million from $357.6 million [9]. - Long-term debt decreased to $3.32 billion from $3.46 billion year over year [9]. Market Sentiment - Estimates for Hasbro have trended upward recently, contributing to a Zacks Rank of 1 (Strong Buy), indicating expectations for above-average returns in the coming months [11][13].