Guidance Raise Driven by MONOPOLY GO! and MAGIC Performance
Q: Is the guidance raise due to MONOPOLY GO! outperforming and better MAGIC performance?
A: Yes, the guidance raise is primarily driven by the $35 million overperformance from MONOPOLY GO!, which directly contributes to the EBITDA update. Additionally, MAGIC: THE GATHERING performed better than expected, with Modern Horizons 3 proving to be a fair comp against Lord of the Rings.

Outlook for MONOPOLY GO! Revenue
Q: How is MONOPOLY GO! expected to perform in the second half?
A: MONOPOLY GO! generated $45 million in revenue in the first half, including $40 million in Q2. The company expects $60 million in the back half, anticipating a slight step down due to expected monthly decay rates of 3% to 5% and variable marketing spend by Scopely. Despite near-term uncertainties, they are optimistic about its long-term potential as a strong annuity.

Margin Outlook and Wizards' Second Half Headwinds
Q: What are the margin headwinds for the Wizards business in the second half?
A: The major margin headwind is the lapping of last year's Baldur's Gate release, which significantly boosted prior-year revenue. While MONOPOLY GO! will contribute in the back half, it won't fully offset the impact from Baldur's Gate. Additionally, a lighter MAGIC release schedule will affect margins.

Path to 20% EBIT Margin Before 2027
Q: Why can't Hasbro reach a 20% EBIT margin before 2027?
A: The company is close to achieving the 20% target and could reach it sooner if MONOPOLY GO! and Consumer Products perform better than current guidance. However, they are not committing to additional cost savings beyond the current $200 million to $250 million net cost savings for the year.

Strategic Shift to Games and Digital Focus
Q: How does Hasbro's strategic shift toward games impact its future?
A: Hasbro recognizes that play is aging up, becoming more digital and direct. Focusing on games and intellectual property aligns with growth trends and higher profitability. This shift positions the company well for where the industry is headed, emphasizing digital gaming and key partnerships.

Consumer Products Turnaround and Margin Improvement
Q: Can the Consumer Products business reach double-digit margins by Q4?
A: Yes, the company anticipates achieving around 10% margin in Q4, driven by volume leverage. Efforts this year on pricing, mix, and product design are expected to contribute to sustained double-digit margins as they move into 2025 and 2026.

Signs of Improvement in Consumer Products
Q: What are the positive signs in the Consumer Products business?
A: Early performance of products like Beyblade, which is selling out quickly in select markets, is encouraging. Other strong performers include Furby, Peppa Pig, Transformers, and Dungeons & Dragons. Additionally, inventory levels are healthy, with retail inventory down 18% to 20% in the quarter.

Impact of Transformers Movie and Future Outlook
Q: How did the Transformers movie affect sales and what's expected ahead?
A: Transformers POS was down about 5% to 6% in the first half, following a 90% increase in Q2 2023 due to prior movie releases. A surge is expected starting in August/September with the release of Transformers One, anticipated to drive strong toy sales in Q3 and Q4.

Magic: The Gathering Performance and Future Releases
Q: How is MAGIC: THE GATHERING performing and what's the outlook?
A: Modern Horizons 3 outperformed Lord of the Rings within the quarter and is off to a strong start. While it may not surpass Lord of the Rings over the full year due to the release schedule, it is expected to have a long tail into 2025 and potentially 2026.

Gross Margin Improvement and Cost Savings
Q: What is the underlying gross margin rate and how will it improve?
A: The underlying gross margin is around 73% after adjusting for certain impacts. Continued mix shift toward digital and ongoing cost savings in purchasing and personnel will drive margin expansion in the back half and into 2025 and 2026.