Hasbro (HAS) 18 Oct 222022 Q3 Earnings call transcript

Good morning and welcome to the Hasbro’s Third Quarter 2022 Earnings Conference Call. [Operator Instructions] Today’s conference is being recorded.

If you have any objections, you may disconnect at this time. At this time, I’d like to turn the call over to Ms. Debbie Hancock, Vice President of Investor Relations. ahead. go Please

good and Thank morning you everyone.

on today Executive Chief me will your with providing questions. and Cocks, will Gaming; Hasbro’s Then Officer. Hasbro’s and Deb begin commentary Deb for Cynthia Steve and Chris and President Eric Officer Chris company’s Thomas, CEO Q&A take we performance. eOne; we Joining and Today, are the President Officer; Hasbro’s of the Nyman, of Financial Throop, Williams, and call. Chief join the Darren Wizards President, TV eOne portion of Film Bertram, President the Operating Coast Chief will and Digital of

Our earnings non-GAAP press posted The release are release and presentation financial call measures. regarding and and slides today’s include our adjustments website. for on investor information presentation non-GAAP

adjusted note will the which discuss whenever A measures today non-GAAP adjustments. to certain diluted per Please of in earnings is referring share included EPS, call share. presentation. these that discuss reconciliation and we exclude GAAP are non-GAAP or to we earnings per release measures, press Our

after any of undertake made Chris our annual obligation I in now other date begin, to I or would disclosures. the to management’s on forward-looking update today’s public Chris? that most expressed results forth in statements. XX-K, include differ circumstances and forward-looking goals, concerning call events release follows, forward-looking the similar we XX-Q, session like or and events There today our report are results call. make press anticipated other set that remind These statements expectations matters. no factors introduce occurring could reflect to Cocks. objectives cause in those that may this factors of question-and-answer the We during members expectations, you statements many or to Hasbro like this management would Before in actual to recent materially these Form and from our

morning. you, and good Debbie Thank

based QX or Games margin, versus in to be quarter billion, Consumer and timing, on rates Wizards in more was of to at QX Revenue shifted as XX%. cadences revenues and timings were the Entertainment businesses. most to calendar down product in release Entertainment impacted Revenues year our challenging segment Digital a and our and XX.X% ship Adjusted XXXX in and our $XXX in release versus including our segment, and Products quarter XX% innovation actual last, million operating our $X.XX and down XX% release import for OP direct profit games product QX down XXXX. due constant accelerated currency Products weighted expected We was for NERF QX as this Gaming releases Consumer and later shipments QX from heavily which well businesses.

progressed, the has impacting will We key price-sensitive consumer of seen field and become trends. become in increasingly average also as ahead. year quarters Promotions have point important entertainment be and the have sales demand the increasingly

Pig and Entertainment Black of shift we driving segments. will power For the margins were top Panther: Peppa In Pony be more profit most instance, by to Marvel to double-digits Operating The of Consumer saw My kicking volume recent the Gaming reach mid Prime great Little game well year-over-year, demand. and entertainment, and among ongoing Products Hasbro unprecedented inspire in key with and deliveries brands the growth performances. last week mix our of combination Wizards in an of and entertainment actions off aggressive toy audiences of Day starting increased extending XXXX. closeout lineup Studios’ Forever Digital and into QX, impacted in Wakanda and a our like speak

brands, profit kick mix, Marvel, approximately impact slates company October as the year-over-year best by the in Hasbro’s more announced on and basis, expected My double-digits Investor buoyed improve in key we Pony, disposal currency and celebrate by Wizards growth operational Peppa mid particular, quarter Magic is projecting are QX, Pig, gaming our $X first X. a brand. Hasbro’s ever our For program Digital our to ever, Little at driven of Fourth improvements low-profit businesses Gaming by on to adjusted segment favorable for one billion off of in non-core new behind operating lineup constant product XXth we flat QX our brand’s distribution, we of be revenue Day the a and and starting anniversary excellence

basis. on are For down for we year, constant flat currency slightly to a the expecting revenues be Hasbro to

expect XX to to XX%. adjusted increase We margin operating basis points to profit continue

up also We be year-over-year. single-digits expect low inventory levels to

QX. via a on billion This initiative bigger us and our help operational drive to achieved satisfied XXXX, million $XXX fewer, be brands games focus profit in including run-rate superior Deb have to return in million detail dollar new shareholder QX. licensing sheet run-rate a which end accelerate with cash more a accelerates million will operating games, team adjusted improvement grow plan with performance businesses driving commitment profit our with growth Day, strong high fuel positions XX% speak isn’t and year is At our growth strategic year in demonstrates to by we line generation our our already and a level significant profit balance $XX a will a us with of forward. end that going XXXX this excellence to shortly. that focus by This our direct in potential, introduced our driven and This to We growing management $XXX on savings by digital by blueprint, Investor will our X.X, program. bottom plan savings annual deliver XXXX. Blueprint approach to to and helping

has new already coming the plan momentum over Our will and begun gather quarters.

anchored track the the our business for all Wordle: viral can Magic Our the by is over buy growth games QX, industry-leading The ages in holiday. including XX a Party We fans to added years. portfolio our Black for high-margin games this time first sensation iconic of must-have lineup, in on the for fans card, Lotus, Game

We like GelFire XX new key and NERF brands older. innovating are with blasters in fans our for

event like Rise and like DRAGONS: entertainment Honor and Studios’ we and Marvel growing for merchandising high-margin, upcoming in hot-selling well and brands DUNGEONS accelerated we Among pre-school Beast leading Spidey momentum Transformers unscripted Black Cream our The PLAY-DOH Pig categories Forever with with scripted are including shows POS the Truck. starting Ice one high-potential Peppa leadership will enhanced month our including ever extend flywheel have has momentum and the films, and where extending March as already & brands, as into Thieves Panther: Friends multi-quarter best through of with Wakanda Marvel’s creativity and revenue will excellence. films blockbuster Hasbro And scale We X Amazing to in and path November XX a this in PLAY-DOH, products growth more of and His this we our out plan and earlier of drive with lineup XXXX drive focus profits behind, on the operational June. we laid us with

potential We concentrating truly are innovate and on us where category. growth give the that in lead the and the can we brands biggest

cases, brands return extracting through exit don’t We where greater drive we some partner a entertainment make in businesses will model, a our will we assets. can Blueprint branded that And through value out from dormant X.X. license

to commitment shareholder With and potential on as positions and Hasbro impact when returning the our near Financial our entertainment category-leading discipline pair lineup, an we I rock exceptional that, innovation believe the it is program of Chief our will potential it and turn Thomas. outstanding solid. Deb? shareholders And growing returns. with over strong continued Officer, with with Hasbro’s returns. shareholders entertainment-fueled emphasis long-term Deb paired will an operational our value for operational brands, cash excellence superior a We driving long-term dividend to of this to and

morning everyone. Good

timing the well The we the product include third as brands quarter entertainment reflect Gathering early for as in happening since and These sets, period. several in card a early quarter shift deliveries retail timing Magic: in and forecasted The promotional results launches key fourth year. have release shifts

in impacted as of so progressed. negatively has the environment the the exchange we by $XX million consumer macro projected, challenging, And year quarter. has have with third for been year-to-date, increasingly Foreign million has the that $XXX impact as revenue

month, aggressive to the over achievable As both and and drive growth plan this we an long-term. we have set earlier near profitable shared

of fewer is an on exiting plan employee-related within we of see XXXX. associated excellence the annualized costs. this to the focusing program run-rate we operational year brands, are severance where businesses biggest charge this We We well as the $XXX this delivery the million potential. by with from cost are Entertainment of the deliver end implementation in non-core million program in Essential segment savings primarily from assets $XXX as to impairment and $XX.X recorded a million quarter

Wizards mix can above-average this XX% we This margin Digital year. leaning revenue of believe into continued activation the focus earnings and which excellence deliver the reflects to We continue coupled discipline, we including are savings businesses profit of in a is Gaming, and operating favorable bottom adjusted like for a D&D expected to across the heightened driving business. Beyond, QX. on including accretive operational with this We line margin our be

the is Our to balance fourth and sheet meet quarter. demand strong well in remains positioned

this a $XXX.X cash is $X.X to last commitment end generation historical third cash was in is lower the million quarter of point year. to with level near-term. $XXX.X year’s cash the impacted year-to-date The operating balance typically balances early our and our in in inventories Our than during the Cash billion quarter compared at flows low cash million.

be to repurchase, year far, holiday lower promotional quality, Hasbro key innovation to $XXX our $XXX repaid year thus is will results. balance of end cash through of reducing you at on share also is D&D our million at Overall, million and work end and our and Beyond in in game down our acquisition have $XX paid behind and to debt. our inventory high toy continues digital our We year-over-year occurring we outlook by of that in as Incremental long-term this $XXX while hand to goal million the items strategy and inventory shareholders but see newest retail. expect with drive returned dividends activity balance million bolstered a XXXX

next While projected that high-end historical below cash grade is meet rating maintaining level delevering track go-forward X.Xx with cash as investment off are our a end move we committed annually next debt target flow and to levels, plan $X on be balance forward our of target to Xx XXXX cash increasing year targets. to our generation sheet, at in billion to year. accelerates operating our We of toward EBITDA to our remain year our

increasing return our to anticipate repurchase shareholders, future share continue dividend our We in and program cash through to years. you,

percentage from lower reflects primarily the gross Looking operating margin in a quarter, of more lower closely dollars year. same profit declined This and and last at revenue. the revenue as period in the year allowances Products quarter revenues largely in Consumer higher lowering costs. net and business, greater of last, a is this amount third product sales our incurred This which of versus

promotional investment movie the reflect key on to Coast we advertising that a provisions foreign Digital by inventory some increases of partially had Pony reflected versus consumer quarter The sales of holiday QX moving X% Advertising was in also entertainment due margin My resulted entertainment of and are planned the Wizards spend particularly lower year, deliveries XXX closer million certain revenue. on closer profit, million revenue pass-through behind Little increase in foreign SG&A adjusted basis spend rate, expect cost the last year to to reflecting intangible to million program and we rate of amortization effect from we Gaming. our underlying excluding These lower slower in the increased, of translation. deliveries. retailers’ quarter Beyond last from Lower a XX.X% point in Adjusted the negative items, in which in Additionally, talent, gross on gain but within product in included $X.X forecasted to shifted factors increased as royalties. markets. cost down tax $XX.X next non-operating development offset periods. XX.X%. Product and impact was repayment to $X.X exchange Last the was exchange, was adjusted the to year. the do the lower quarter, net full early year. million, income a expense basis, an year’s million range we an debt. XX.X% year. The of not in the increased third operating is a percentage primarily underlying declined $X.X of and a of repeat last discrete had on be amortization This in D&D of quarter XX.X% This result And we QX. versus favorable a which of expect $X.X added on up acquisition. dollars Below was in

Gaming X% Digital months revenues the our X Wizards XX% at Coast a declined result up Looking release in year. X% but Tabletop of of are through the of currency. the declined timing, segments, revenues first and constant as

this said growth premium Mobile from the by of strong As Gathering Arena impact and based declined led this gaming and comparison timing game tail tabletop. earlier month, Magic: launch The are release with XX% double-digit forecasting Alliance and Gathering Cynthia for the in year The the Dark last licensed reflecting difficult launch we Digital growth of year. end the the on Magic:

like Digital We continue to and incremental decline, to in the with sets million support XX,XXX. Warhammer royalty reflects growth revenue Gaming invest this and and This higher segment. was expense paper in in initiatives cost profit new of freight long-term Operating beyond talent down XX%. universes $XXX.X

development, These costs Alliance depreciation product advertising partially have released that added We XXXX. of with Dark by the launch-related Beyond in D&D and earlier. amortization to associated lower were offset spoke also I

currency the growth year more we $XX exchange, high absent Consumer foreign America XX.X% $XX.X segment in operating Asia-Pacific from region, in over and XX% foreign XXXX expect with decline a excluding was was revenue as XX% decreased for revenues we which Latin in decline an a single-digit negative For Europe. investing than a of impact exchange. XX% profit full XX%, on North in valuable But Products for this up brands. was constant of European grew flat America long-term by X%, margin XX%. offset basis, million growth the these which was and million down continue year, full growth

the for moving the revenue in approximately the million second this our do the adjusted profit We related decline lower in with inventory revenue half profit result operating to associated higher with expense earned XXXX. is of operating not Russia associated obsolescence The XX% XXXX, full the reminder, higher in and in year levels. $XXX a segment’s was year. and As XX% closeouts revenue, adjustments allowances, of price have

this perspective, and deliveries full year, at to have is portfolio plans shared to the constant declined later in A Investor segment long-term TV of year films currency, down the and low segment, decline down this revenues with year. Brands, brand to due holiday, Franchise Brands, have For in the in XXXX’s this from quarter single-digits From brand expected versus XX%. Last the Chris for growth third Hasbro month any timing each the Emerging margin franchises, operating XX% quarter. and Brands Family From constant growth films XX.X%. Gaming growing initiatives full plans. these revenue in Brands, the brands comparable most new Wars in release comparable declined profit up, where last. Come Entertainment XX% revenue Hasbro of did the and and and Partner and sale. longer-term reflected and Peppa year. Little which product spoke revenue Yellowjackets our from Key Film year, delivery slightly the a year XXXX category direct primarily anticipated we’ve did were were earlier Also, Day. Pony: year movie streaming Pig we debuted. grew and we a My Generation team of contributed NERF Finch revenue Little comps and and film have two released this and to products several PLAY-DOH, not Where currency. positively the Away POS are the for consumer New declined point not revenue XXXX, important in My challenging is a Pony Marvel revenue our after in Hasbro quarter. Star to Gaming, had areas POS important

launch and Paramount+ TV, and revenue Yellowjackets and The release and Pig MASKS. expense. My fourth Pony in Adjusted including the for royalty We on and movie have animation amortization content. well continued PJ significant revenues of offset Feds, the EarthSpark XX% Transformers: versus profit This entertainment Little by The lower Pony, Nickelodeon Rookie, Summer operating decreased as My on reductions the lower was scripted and of for Cruel as Rookie: the partially quarter mix expense, Little Peppa program lower advertising

in adjusted consumer year the slightly demand, be from to to excluding in music, inventories certain to savings. Adjusted year’s the and last operating and our of or up of is year, businesses expected revenue meet releases of operating line For rate clean constant with we mid-single TV divest quarter we’re non-core the as decline with of cost deliveries margin absent to and and expect focused music fourth film profit on we In quarter basis currency on moved in the XXXX. to certain closing, full our run digits driving achieve end the first a profit X.X%. scripted business

expect We growth points beyond. margin by expand XX%. basis in slightly for revenue adjusted XXXX constant us also to operating sets in flat to up down currency and to planning full and we’re be year This XX profit to

We our gaming and direct-to-consumer in entertainment, have a strength plan on in that builds relationships. our in branded

the the to turn have the brands, now it strategy I’ll this team plan. We to successfully Chris. back execute and

Thanks, Deb.

to Today turn is strong studio accomplished recognize call let at a a Throop. he end library Darren’s eOne content minute Hasbro as take of leaving me mediums. year. Q&A, talent, the across of and an the earnings we Darren Before production with capabilities Darren to into grew rich last is

an wish work. development the robust in has past Thank unprecedented hard The an success he future. for leadership, role and we the of film invaluable few environment. you result Darren, your with of the you, served direct the year eOne the pipeline next years, Hasbro is D&D Over integration in in tremendous during and his

questions. will we Question-and-Answer Session take your Now

your with question. Thank you. MKM line Please today Eric from of first Instructions] question the comes proceed Our Partners. with [Operator Handler

quarter, with talk if the forwards pull with retail about Thanks a bit morning. of Last of guess shipment. for had Good state a direct you I the right could bunch now. little we Wonder start Eric. question.

talking with and higher broader situation we’re quarter, a Are promotional macro going isolated of This there is sort some issues NERF just and lot about of activity. allowances here? or gaming the on

for first great as Well, thanks Eric, question you Eric, we’re our the to speaking, seeing partners. asked. and a turn hey, good partnership over I off, retail it will morning. Generally with

high We with focused budget promotions have coming a QX our out. advertising innovation of percentage our new on and very

you and so turn our look what And for for us up innovation that the XXXX Eric, prospects over about balance. new we optimistic beyond. I’ll and for like what to it sets remain it

question. innovations the Chris for with we’ve Eric, about sale, four now, were Thanks, half recently we they access that specifically did started we big on Amazon very Sure. very look just as performed innovations into Hasbro back QX, talked the strongly. roll if how saying, positive what launched. Eric, and build is Maybe right feel the with to at Prime loaded. for about We we And you big Day promotion Hasbro quarter early off retail where their our

environment around retail promotional QX. excellent to we’ll our think I forward. We we as I the of built partners. in momentum will a all go world you POS continue So And with see that programs see expect

Great. just And a topic. going different a on follow-up then as completely

growth and – of if market year where your We’ll for to about North you of you the the brand. could the expanding DUNGEONS & for if As the game? next best global look D&D, I’m been addressable for for some a sort movie can and and product. launch mainly Wondering attack how growth think you international talk have we me a opportunities DRAGONS, correct it’s wrong, today, American-driven strategies

Yes.

prospects. film bullish has fantastic a The about We’re introduction at D&D’s Comic-Con. had certainly

Comic-Con trailers both among on I general buzz and has one and a There’s highest the fans. released. Internet it’s Paramount the viewed ever nice at about think it, of that

as launching games And great across core for international going well so platform merchandising, the we expansion and that’s be driving a as business. expansion think licensing, digital category to

And this think I over then, you free Cynthia, Eric’s Eric. to turn international anything if have I’ll dimension add, question. the to feel to one about

determined, at brand that Yes, we Eric, to event, saw Sure. similar we launched to I Investor a how Transformers the see we how behind but be think theatrical bit talked in when we this scale XXXX. Day

with publishing We the has categories about expanding genre. figures. Cynthia the expansion terrific But done, we’re along into job launch great excited action Wizards across product team, a behind in really D&D the have new theatrical a of where

We the put has have a terrific team together. line that

of of we’re as NERF that have as We games. line proud core very products a well

board you’ll game with Hasbro. D&D more So time a genre go see for first into of the

category So and expansion positive do with expansion. we feel geographic that really about the

QX teams as are to that of globe sure want the around Cynthia, year. to anything very you to add that? on can with you imagine, board the positive we the in win motivated make have So do a next D&D

& opportunity I opportunity both great Beyond digital add about when being give and toolset monetize Dungeon you The give it us the and a is capabilities we today. we the our tools that base one gives monetizing our thing expand than think Yes. but of also DRAGONS the to it’s DUNGEONS for a internationally, to masters premier to all players, player are of would more [indiscernible], going wonderful us

Great. Thank you much. very

the of next Arpine question UBS. from question. with Kocharyan with Please Our line comes your proceed

quick good which you And today there’s to Thanks we be up guidance full for QX before actually my you imply X% could follow-up. in something it Day play revenue X%, year-over-year. outlook growth How year on have I actually some QX. sit? change maybe. Did I QX quick were from your The or versus morning. how out? in a no have flat is would to taking look said seeing Hi, guidance at what question. today, a implied for at midpoint And Analyst down change where to clarification

problem. question. our No Investor Yes, changed our since Day. for Thanks not Good Arpine. morning, has the outlook

innovation coming of portfolio. across first to brand. there’s billion in a Gathering, green ton The on a lot continue We out Magic: There’s $X shoots across coming the innovation feel some our exciting games, NERF, of out like

looks what like together, flat of consumer the of put approximately and looks looks like. guidance the environment inclusive macroeconomic what at kind just Our factors the all of state

of improvement up of started Thank said Does all you. POS mean in positive POS of QX expect in thinking actually come QX? those close X to inventory QX calculating that Day improvement when correctly? And versus single Prime would Thank that or overall North need mean say, and Am that some to POS low America you. outside you to record see expectations then to slides, overall because seeing you’ve done days digits, the improvement. you I noted Am finish about up of X% in sort it QX? correctly I positive

Yes.

So two coming and we inventory. the to Digital, there’s components which a have of of releases There’s Wizards lot set out. Coast

So be doing. there’s in inventory to seeing that talk trends significant. be going then GX our should POS about I’m fairly what America. there across that there And Eric will some to decline over Consumer is to Products North team it we’re markets recent turn and the

talked Thanks, innovation. we’re focus, Chris. market to and Thanks, half with POS Investor how QX to Day quite really and back a Yes, we our regards Arpine. about Yes. loaded share, was at bit regards with

as seeing, Chris early point, Day at this sale. Amazon mentioned, green in We’re good shoots just the addition Prime access to and

month. we’re And share build flat trends improving, up slightly the Australia, something or seeing the that on. continue to X, across are And but POS and example, several weeks. the market our the for levels positive we’re past obviously motivated different level to also last in over improvement that’s EU U.S. over So to same the

And and of our weeks budget it XX should XX% promotional the year. the noted, is remaining, be left of what, advertising in

QX.

earlier that on highly a markets sensitive seen we best promotion. a we’ve so little And seeing where the share where environment. trends we’re Actually, the started are promotional

super very is you It helpful. much. Thanks. Thank

Sure.

with the question. line Crum proceed Our Please is your of from Stifel. Drew question next from

Hi, guys. morning. Good thanks. Okay,

start, business So you’re I suggested of questions growth. digits guidance would Today, have Wizards. the perform which at low to two the sensitivity changed the that last double previous quarter, then that’s your I segment suggesting end And on range, high has upper you Maybe Is growth. was earlier? alluded around price commentary? What you any to digits this single follow-up. seeing a a versus have

Yes.

free that. in not might fill And anything I that take Cynthia, I’ll So feel cover. to

as as the to whereas is the of are Wizards games low on depending business, well, which Magic X%, category Coast much general the particularly as at. continuing down you negative up see which business We’re performing source the year-to-date look X%,

great great And segment we they fans So capacity a when sheet really personal fan overall balance they’re to Magic our in a that have something segment, and the collector Magic a resilient. is enjoy. very in motivated base, and the they spend driving find and

so that’s bullishness on outlook on our like And kind of Magic the underscoring forward. moving

rest has in business has again, softer we game year. the DUNGEONS a digital Digital Dark performed little with & with we Alliance been of Our don’t a premium that DRAGONS well. launched of Gaming the category. year-over-year, we next line continue And But comp the have have of trading the stock cards and or kind resilient on the play add remains card Cynthia, outlook? logistics hot access very of anything around of to market, bit a little because playable a in trading general category. to production it’s card whether sports collectibles and

XXth – from other Wars for secret strong two Post the lineup of beyond, layers, other off coming And the artist the anniversary up, think great XX,XXX Warhammer our music we Brothers featuring I inspired XXth a QX, the course, first we’ve Malone, year is say this have this thing kicking I’d I’d selling we which platinum kit. say Magic’s $XXX more what with done a had countdown just of and is one that’s Edition, have set cards high-end universes the And by iconic have was some happened. really Magic’s includes million revenue. Anniversary five like Magic we’ve this Lotus. And beta all got finally, tentpole collectible in year than being releases Black all

longer focused, has months. pretty over a challenged mobile is helpful. follow-up Okay. the Thanks, category as more my And been very XX then last term

investment several this segment? think you next spend point the Thanks. be As years, focal about is this across going a for to

double like double driven think investments and we balanced the Wizards the percentage Digital to approach digital be about our we’re MAGIC a the as of over continued That to have Day, will by Well, years at growth by talked next plan of X we segment where are. of digitally. and the fairly business tabletop how But segment resilience planning that’s the powered our we our we Investor in brands XXXX. Coast the size D&D. to and And have a

as We the of in And very a sharing or well studios are are we’re that building coming with have have lot with business, in growing the then games leaning quarters. platforms mobile about as done. to over Scopely looking and the one. our service large a products we’re that forward big some really D&D of the like of We best some great work we high-caliber being AAA one names a where games a bunch service a Beyond majority license as game more business, into as

downs have any year, games trend And a that or how So the any its decisively like given the quarter entertainment might positioned while the I digital given entertainment. is we’re future as the or in direction in I company. is of ups interactive market think

Got Thanks, Chris. it.

question The the question. with you. comes Thank of line from Please JPMorgan. proceed Alexander with your Megan next

some on about Hi, you’re thinking how thanks beyond question. our I for spend want maybe it XQ. taking Products to time Consumer and

inventory expect it low Previously, You up flat. expected you had digits. single

the to phasing late-arriving to move You about as a revenue? how year? we you’re and think how in innovation in shipments that do especially about But half, flow the risk do commensurately? retailer talk of destocking, should of last lot lapping first entertainment then brands exit the you and you think expect about licensing the some Should next of coming year. And

Yes.

to couple the way, a over start I’ll for by it Megan. then So and the of question, thanks, things. turn And Eric.

like aggressively after chasing year, big that inventory industry to pushed we QX at today. season. a entire we make the period in could again inventory so the that the and we didn’t we have that reason difficult of holiday is in a into the why It’s our QX beginning sure retail promote plan First off, were

of have the new tailwinds the we a are coming comp QX that and handle us the films loaded are macroeconomic seven a we innovation we shows note I balls be front, to coming able the that half TV whatever on might very front blockbuster of Eric? curve happens tremendous our throw think half that will out very is way. giving favorably economy to I to least, have XX amount lot And of next last on that that’s thing trend other that’s year. out but whatever very in think think not first in then

Yes.

we that I the great macro you And think supporting regardless trends, look our entertainment excellent very XXXX. points. believe entertainment. and lineup promoting our interested at in Retailers, have are our for great we Megan, and always to trends of think I continue in partners’ seen, if

when June, June, repeating, the movies Guardians ours Jones a our Chris of Volume starts folks. we in into partners and talked in that of spring, turning the recently month D&D, you have Spiderverse later Thieves, a Ant-Man risk on and of about Disney have which end we and Galaxy Disney+, Mandalorian Honor which heck which Transformers those Wasp, with from about the Quantumania, Across like them. already next Among products in we have all lineup announced then by The the at So, the July and Indiana the Disney+ X, supporting Day X programs of That’s lineup talked at of great from the was June, Marvels, a then on all

we retail that going mid-term year. QX start QX expect to through going next that have will in about do you period that a really and asked So, into we nice

Awesome.

fair brands tie of be year all you have it that to is that talked about? consumer exiting you that next just guess products together, expect despite to can some the believe I So, up

Yes.

point to really standpoint that of out to reason certainly business, is look for going the what across as we what that’s we right, at big some Megan. from think When story. do what our I want I we to highlighted. a are which that is profit are are year, we improve next good a expect And is I particularly our see what you doing doing what we strategic growth, just action – predominance brands a also

their standpoint, regards a not expect on as opening that to improvement our only also certainly, and and you remarks. that net margin excellence products see product Chris unit continue we we next have in but we but that on that we with expansion, you both Deb from about exit which consumer the focus will businesses, will asked So, mentioned to operational to year consumer operating work from program revenue, expect

Is And then savings have then for follow-up mix you for maybe your to a Deb, business. and usually which talked guide above XQ drivers the the are maybe sales operating sufficient, in inventory about, you. Awesome. the guess additional the cost more cost some I XQ specifically, are are is further from risk quick taken improvement? Wizards that in we X, Thank typical all terms or into margin there actions a should of of how perspective of have like you guide what’s think built there about confident is you XQ? or in implies

revenue. we have strong is from hand our now very we mix Much that different as talked of coming groups. have Thanks about we inventory of Megan. on a No,

actually are costs. seeing We distribution reduced

now So, distribution seeing the come we things are down on side. some

I supply I paper of The on make supply. exception, a up easing would paper, we can one is have we we bit. is stocked And still sure challenge. think a is which bit say, so have up still chain all a

are seeing our you that in inventory So, of as some well. balance

cost mix, to savings, benefit start our we cost savings. So, the will of see between

that coming In coming consumer said actually of that we a see big in to about in is fact have going of predominantly impact well. are $XX quarter. products we million And fourth as the piece

mix, make product we we’ve the between on to-date have remain basis. margin fact taken quarter in we for year hit and savings, full cost that’s the we fourth to why confident look on that how XX% we So, sure at can our a stock, actions

you. Thank

proceed next Mike of comes Sachs. line question Our the Ng with from Goldman question. your Please with

you Hey, question. I good just morning. for two. Thank the have

have within and product is talk is for Disney you. fourth think could some second, was you that down other commentary then little And margins of players Was or about or may impact Eric’s toy right zero? if allowances wondering on the that category, I in promotional it that about a and ask activity. Is and industry-wide a to effectively brand quarter? And particular follow-up and seen? the just to approaching Thank to issue the and concentrated want question closeouts products. I Princess consumer bit that revenue this way that was around an winding First, just about any the

on And Chris digit as some It’s promotional inventory sure been answer in QX. we through you And worked to to our in anything, making partners, But that about to area QX what discussed closeouts, Mike. activity. our that’s we we we Want ourselves is in talked we work stay situation. Good Thanks we which I expect be ahead retail continue wanted mentioned, And we inventory to order. say year we And make will the did. can our through our sure morning. again, if have activations in I QX, Eric. allowances Sure. that already was first jump of see inventory where line that Mike. we and to and started that pride early you about. this we finish low your with we morning. question in at to as brought in I forget would Hasbro. into will that already mid-single again story built with I have

going Brands. not the our focused we I our is think part are throughout through to other we brands Investor do decline change. on as as as businesses, bigger our regards to Franchise with that We year, and well of we the as growth on your that’s that question, exiting, a lot businesses in and those at manage QX year this which that in strategy, will expect fewer we second exit both Day next talked

are we exit already are as question, Marvel. Franchise And a and going going the some you we Brands some those operating mentioned those Brands stay as are to to Wars that Partner brands, I Star us and of going margin. to will exit see in increase that prior you in So, an we see other with to growth And others. behind like

invest I for Hasbro. So, an thesis to think it’s excellent in

you Thank Great. thought. the for

Mike. Thanks

question. question Wolfe your the of next with line from Please Fred Our is with proceed Wightman Research.

of what for and on color that mid-term Eric’s gave within follow-up in price and of about Hey, about have how on you that sensitivity target the guys Good guys. morning. this the maybe into ‘XX, are dig comments sort to thinking Eric, guys means I Chris CPG business. business. about price you sort also just but XX% you CPG wanted some then

about, So, that feel backdrop, given and still cost a more lever it price you is softer there? is of that some or consumer confident saves you guys get mix

of I think for question. No, Thanks Hi. the a couple things. it’s Well. Yes.

So, factors. different as look we a couple price, we at of at look

we consumer at First, look segmentation.

invest find And it, so as the mass collector a major fans price that’s long inelastic. been you behind And very very we then the tends resilient segment segment. us. and and system a for And product build fans a passion-driven. the have you stick of Collector growth the be a great and play as our to It’s to very fan segment consumer, you great have and driver us. that’s continue and with

the we really, The lean strategy our two talked at price are this all years fans Magic: think a Investor and opening of items and items points. us for systems Our giftable for of of great our be where investing going. come. continue And about to will have are what Gathering. very innovation. high-low with high-margin we fastest-growing great of think you that business is concept On very and that we businesses see you where sides pulse those side development, and going both business, for those in to ages. product us more on market that’s kind we segments. And year play And you and And opportunities with are this mass I Day, great trend businesses in pair play that the system-based segments of ladder-up see lucrative in, more stretch our of to And will the

Yes.

resilient I private think industry label right now that, you that I I Fred, the not. thing the are more are is seeing could and is if add to brands other think that in

the around over and quarter the the lot of a we private lot fact the In in around that industry noise a label, where out last, label it, shifting shops seen closing closeout retailers country are call have to world. of private

branded seeing clearly consumers. as pricing being we we the able have are be our we mentioned, And very environment. and So, way a that house, I consumer we this us, sticking segment stronger that and strong at is And Hasbro. are and through the think for of due to some Chris a lot brands to

What guys is there? you touched year-over-year prior POS the a Prime that just the on double-digit follow-up, quick comparing is then for that basis? mid on comparison a you to Prime exactly that Days? And Are sense. Makes Day,

Prime Days. Prior Yes.

you. Okay. Thank

your Our D.A. question. next with line Bolton-Weiser Please with question proceed comes Linda from the of Davidson.

question the projection My Entertainment segment and is on the Hi. fourth Yes. for outlook quarter. or

me but if segment Film hard, a harder it looks even and just has to explained the it quarter. like fourth Sorry already, as in the you TV comparison

things And harder to So, comparison? shifting in then the to decline the of anything happen the are issues reiterate certain rectify smaller delays that or first shifting? just exactly? the that can there things to is going are against Is fourth production that again phenomenon And a the is then what what quarter thing of you quarter that the future? you can that specific or XXXX, personnel is second the just do causes into make what in Thanks.

Hi. Thanks, Yes. Linda.

has segment our productions. Entertainment particularly QX, in very TV a in lineup So, strong

Now, dating what’s the with the nature of productions TV have often with network. the

deferred I inside on content. of you QX of going the see of is in our from revenue in bit and think just when the said, high, to streamers being on see continued music so XXXX. working affects are ex things of about good growth low maybe segment payment various being a mid-single And slippage goes down we we digits, QX maybe low-single this lot And that’s QX points into and little That timings dated networks digits. or that we prospects a Entertainment delivery – that year. timings and seeing That with. are the are that But what of

very you Thank Okay. much.

your line Markets. Our Please from with Johnson proceed with Gerrick next question comes of BMO the Capital question.

here. I couple Good morning. Hi. have a

or saying First, whether talking are company inventory. I I you channel to am confused sometimes as inventory are wanted because about clarify what you inventory to just on

end the right the low to to that year? of look what’s Is now expect like So, what’s where end channel you supposed the quarter? inventory at mid be And the of or situation single-digits? the to be that at up do

we talk our CP we inventory, it And across So, we Wizard talk segments. inventory. about and company when Gerrick, about talk about

down the we in digits turn of it mid-single inventory digits. company mix QX, partners. Deb to low-single the CP to across our see talk inventory likely which up inventory see see over low-single digits will we So, or we a Wizards broader whole. as either a about I Eric And where for up mentioned, our channel as contributes to

Right.

but at a up, inventory of the of said retail of And is quarter, the for good we promotional end have quarter. planned lot activity quality. the it’s we as So, fourth

setting fourth is guidance working specific much having our quarter. on on activity, retail But we new inventory inventory, in said. was exactly and for promotional retailers as innovation are Chris our our lot was So, we are it of the of with that a this

Perhaps that Okay. sales Deb, year. Thank Mike was perhaps obsolescence. compared and I issues did closeouts about you. product consumer were of asking you And to year those this add pinpoint will and where How on also, could to last allowances a exactly look? what sales as percent

is sales you year. bit higher or we year that get for last even some right, can But stock me let than whether I bit reason the then allowances period, couldn’t year. take Eric a not the are the well. and it, this higher, answer sales And seeing question. a think if last as about price allowances allowance all Well, then we price can And closeout of question, Sure.

were consumer, they promotional last activity retailers could our less So, was takeaway selling with the year. the what consumer and get that for

allowances. but high that. year from sales Nothing just of that in about certain and I a pockets to respect we weren’t well. So, benefit had this of unusually was last levels talked working With to year have inventory normal more the some that would just say are And high, low. territories, that we we returning level unusually

around we some of we have moved that as globe, So, inventory. the look

Some of and in the been it’s it’s region. places been Europe particularly territories, of in various in some in the certain Pacific but in U.S.,

elements QX also a we Yes. that that I add, Gerrick, comp would have just have year. some last from didn’t we

stages fourth big fairly a something And non-traditional significantly that quarter of from with have flow this Wakanda were MASKS that’s now in QX year, mentioned, chase year. for we inventory. really as we of brands. PIG also and not Deb PJ PEPPA and So, we Last really that comping a some at mode in very our early didn’t have last last integration movie only year were as we new we Disney. But Forever good comp, we eOne the theatrical have as are well

we inventory it work So, as we traditional again are are. and mentioned, think, cadence good quarter. about sales And a I this be we where fourth allowances will feeling Deb as through

you. Okay, great. Thank

Thanks Gerrick.

Thanks Gerrick.

you. Thank

Please Jason your of America. question, line this of final with the Bank Haas is coming question. Our proceed from with

Hi. Thanks Good questions. for morning. taking my

next provide if segment some for you curious by could am I year. First, outlook

consumer I think then was your low-single Wizards high-single Analyst products low-double at digits, low-single up recent you up Day, and to talked entertainment digits, digits I about digits. being think

target. to that use? a that a that is multiyear use for So, year? good a Is to next know I was good framework framework

moved specific have are helping at innovation a of year. into by exits XXXX half revenue as said, we which consumer only first lot of lineup, the a continue shared which coming in modest how tailwind of from feel next creates That that business segment. term as QX, guidance entertainment compensates And XXXX to just on for to we for we out entertainment shared well. have haven’t positioned we for the QX comps out We longer and next QX have. that a And segment guidance. represents then kind for year, our is really to where good this that we that think certainly that a than Jason, about Games tailwinds we believe going products, more into both some the we stacked least talked, I us business

disciplined, do in have as as million talked in note also to since very $XXX that be mid plan we that haven’t a will feel excellence think would we want Jason, just about And stronger, cost more term outlook company the to million more we confident program $XXX going we longer forward. well. profitable savings that we you our believe to it, mention, add, just operational I the Yes. and about future, I much

fatigue timeframe. And players among out concern some talk releases the of as maybe been wallet Great. some follow-up, many then in there. a is Thank Magic investor short there you. a too is has there There that been

prices seen bit. secondary have down We come the a market

there curious what’s is concern response that Magic your So, all that lot just just of to once? I product a at coming am

digits. have we Gathering. of by X%. Well, the And in we I particularly in double think be I Magic the category bullish started end down for product. remain have gaming the of have first year. up general QX, up bit know don’t almost is this want The as digits little tripled. this, growth coming I Since that back talk And XXXX, had you a what to we on are the through we we has by close the said, nine Cynthia, most year will months double a business And more by about Magic: measures great if the but to

Yes.

our our was couple sort did things I of that Brothers slip with this of into with than little which XXth issue. other But layer have is say direct-to-consumer. that I our And also secret a coming edition that, year War would QX, drops, products a Magic bit chain our we is that are one was of think are supply out a which for Infinity. up releases direct-to-consumer,

in channel. number hobby that the due supply in little would have say I chain within have shifted same a the of in year channel, to some So, got the issues. sets a you bit just timing They happening

roadmap Wizards. gosh, you since grown, the D&D was Magic XXx to back shortly, D&D big with in games, exciting it’s we video it for back has size of merchandising And some announce AAA just about as I say TV as to going ahead edition have that would efforts. as of an incredibly licensing probably AAA been D&D important release growth has projects – last the amazing one Wizards, partnerships, fifth much but Magic XXXX, and are the then. think huge And thought films, we

two And a time. Wizards business really better, better so blueprint several become will next over months. and foundation just that positioned of our over That the is Coast think get I the to driving

Good to Thank you. hear.

Thanks.

End time, of closing I turn will the Debbie back remarks. Q&A floor Hancock for At to this

replay for and call. our Thank you. you be website hours, approximately in the will management’s available and will following you, call remarks be everyone on prepared today. Thank posted this thank joining The two Rob,

today’s conclude will This conference.

your disconnect may You this for at Thank time. your participation. lines you