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HASBRO, INC. (HAS)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 revenue declined 15% year over year to $1.10B, or down 3% excluding the eOne divestiture; adjusted operating margin rose sharply to 10.2% (+14.1 pts YoY) as the company lapped 2023 non-recurring items and benefitted from favorable mix and supply chain productivity .
  • GAAP diluted EPS was -$0.25 due to non‑operating expense, including a $78.2M impairment of the Discovery JV; adjusted EPS was $0.46, up vs $0.38 in Q4 2023, reflecting improved operations and tax favorability .
  • FY25 guidance: revenue up slightly in constant currency, adjusted operating margin 21–22%, adjusted EBITDA $1.10–$1.15B; segment guidance calls for Wizards revenue growth of 5–7% with 39–40% margin, Consumer Products flat to -4% with 8–10% margin, Entertainment flat with ~50% margin; dividend declared $0.70 per share .
  • Strategic pivot “Playing to Win” raises cost-savings target to $1.0B gross by 2027 (from $750M by 2025) and outlines mid‑single‑digit revenue CAGR and 50–100 bps annual margin expansion through 2027, a key sentiment catalyst alongside Magic: The Gathering Universes Beyond launches (Final Fantasy, Spider‑Man) .

What Went Well and What Went Wrong

What Went Well

  • Record-level profitability metrics: Q4 adjusted operating margin reached 10.2% and full-year adjusted operating margin hit 20.3% on cost savings and mix; management emphasized “best operating profit margin in company history” (>20%) and disciplined execution .
  • Licensing and digital strength: Monopoly GO! contributed $38M in Q4 and $112M in FY24; Baldur’s Gate 3 outperformed expectations with long-tail monetization; management highlighted “highly diversified and high profit revenue stream” across 1,000+ partners .
  • Wizards momentum and MTG pipeline: Despite fewer set releases, Wizards FY24 margin was 41.8% (+5.7 pts YoY), and preorders for the Final Fantasy set sold out in an hour versus a week for Lord of the Rings, underpinning confidence in 2025 growth .

What Went Wrong

  • Topline softness: Q4 net revenues fell 15% (-3% ex‑eOne), with Wizards down 7% (lap of LOTR holiday set) and Consumer Products down 1% (exited brands, reduced volume); MAGIC Q4 revenue -19% YoY .
  • GAAP earnings impacted by non‑operating items: Q4 GAAP diluted EPS -$0.25, with $78.2M Discovery JV impairment recorded in Q4 within other income/expense .
  • Category/brand headwinds: Management called out structural declines in NERF and a light Star Wars entertainment slate, embedding a ~4‑pt revenue headwind in FY25 Consumer Products guide .

Financial Results

Quarterly trend (oldest → newest)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$995.3 $1,281.3 $1,101.6
GAAP Diluted EPS ($)$0.99 $1.59 -$0.25
Adjusted EPS ($)$1.22 $1.73 $0.46
Operating Margin (GAAP, %)21.3% 23.6% 5.4%
Operating Margin (Adjusted, %)25.0% 25.7% 10.2%
Adjusted EBITDA ($USD Millions)$313.5 $406.4 $164.8

YoY comparison (Q4 2023 → Q4 2024)

MetricQ4 2023Q4 2024
Revenue ($USD Millions)$1,288.9 $1,101.6
GAAP Diluted EPS ($)-$7.64 -$0.25
Adjusted EPS ($)$0.38 $0.46
Operating Margin (GAAP, %)-93.0% 5.4%
Operating Margin (Adjusted, %)-3.9% 10.2%

Segment breakdown (Q4 2024 vs Q4 2023)

SegmentQ4 2023 Revenue ($MM)Q4 2024 Revenue ($MM)Q4 2023 Op Margin (GAAP)Q4 2024 Op Margin (GAAP)
Consumer Products$753.9 $746.3 -16.7% 6.8%
Wizards & Digital Gaming$363.2 $339.0 28.4% 23.9%
Entertainment$171.8 $16.3 -99.4% -99.4%

Brand/KPI details (Q4 2024)

KPIQ4 2024Q4 2023
Franchise Brands Revenue ($MM)$786.2 $843.7
Partner Brands Revenue ($MM)$181.0 $154.0
Portfolio Brands Revenue ($MM)$134.4 $151.2
Magic: The Gathering Revenue ($MM)$208.4 $258.3
Total Gaming Revenue ($MM)$542.5 $568.7
Digital & Licensed Gaming Revenue ($MM)$132.0 $97.6
Consumer Products NA Revenue ($MM)$421.0 $414.4
Consumer Products Europe Revenue ($MM)$177.9 $197.3
Consumer Products Asia Pacific Revenue ($MM)$93.4 $64.8
Consumer Products LatAm Revenue ($MM)$54.0 $77.4

Drivers:

  • Mix and supply chain productivity lifted margins; GAAP EPS pressured by other expense including Discovery JV impairment .
  • Wizards down on LOTR lap; Digital & Licensed Gaming up 35% YoY in Q4; Consumer Products benefited from lower discounting and licensing growth .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue (constant currency)FY2025—Slightly up YoY New
Adjusted Operating Margin (%)FY2025—21–22% New
Adjusted EBITDA ($B)FY2025—$1.10–$1.15 New
Wizards Revenue Growth (%)FY2025—+5% to +7% New
Wizards Operating Margin (%)FY2025—39–40% (step-down on higher royalties) New
Consumer Products Revenue Growth (%)FY2025—Flat to -4% (≈4-pt headwind from NERF, Star Wars) New
Consumer Products Operating Margin (%)FY2025—8–10% New
Entertainment Revenue / MarginFY2025—Revenue flat; ~50% margin New
CapEx ($MM)FY2025—≈$250 (≈50% internal video games) New
Dividend per share ($)Next payment—$0.70 payable Mar 12, 2025 Maintained
Gross Cost Savings Target ($B)Through 2027$0.75 (by end 2025) $1.0 by 2027 (~50% to bottom line) Raised
Gross Debt / Adj EBITDA (x)By 2026—~2.5x New
Manufacturing Mix (China)Next 2 years—U.S. toy/game volume from China to <40% (from ~50%) Strategic shift
Tariff AssumptionsFY2025—Includes announced US tariffs on China/Mexico/Canada as of Feb 1, 2025; mitigation via supply chain/pricing New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Cost savings/operational excellenceNet savings ~$90M YTD; adj margin +13.7 pts YoY Net savings ~$177M YTD; inventory down sharply $370M gross, $227M net FY; target raised to $1B by 2027 Improving
Licensing & digital monetizationWizards +20% rev; Monopoly GO! strength Monopoly GO! $30M in Q3; licensing mix supporting margins Monopoly GO! $38M Q4; diversified partner pipeline; Baldur’s Gate 3 tail Strong/steady
Wizards/MTG pipelineModern Horizons 3 drove Q2; tabletop +3% MAGIC +3% Q3; Wizards margin 44.9% Universes Beyond: Final Fantasy, Spider‑Man; preorder velocity extremely strong Acceleration in 2025
Consumer Products trajectorySegment -20% rev; margin -0.1% adj; exits/closeouts Segment -10% rev; adj margin 15.1% on productivity Flat to -4% FY25; margin 8–10%; headwinds in NERF/Star Wars; lower discounting Stabilizing with mix/profit focus
Supply chain/tariffsNot highlighted numericallyNot highlighted numericallyFY25 guidance includes tariffs; diversify manufacturing; China mix to <40% in 2 years Active mitigation
Capital allocation / leverageDividend maintained; strong cash flow Dividend paid; debt reduced; leverage metrics improving CapEx ~$250M; target ~2.5x gross debt/EBITDA by 2026 Improving balance sheet
Strategy “Playing to Win” & AI/digitalBlueprint 2.0 references Turnaround and innovation messaging New 5 pillars; AI-enabled games/toys; co‑publishing JV model Strategic pivot to growth

Management Commentary

  • “We delivered the best operating profit margin in company history, eclipsing 20%, including a return to profitability for our Consumer Products segment.” — Chris Cocks .
  • “Monopoly GO! maintained its high levels of engagement… The momentum in our licensing business has been a huge catalyst for Hasbro… across over 1,000 partners driving over 4,000 individual collaborations.” — Chris Cocks .
  • “Q4 adjusted operating margin of 10.2%… over a 14-point improvement year-on-year, driven by the lap of recurring items, favorable business mix and supply chain productivity.” — Gina Goetter .
  • “We are increasing our cost target… to $1 billion in total annual gross savings by 2027, with 50% flowing to the bottom line.” — Chris Cocks .
  • “We expect total Wizards revenue to grow between 5% to 7%… [and] Consumer Products operating margin… between 8% and 10%.” — Gina Goetter .

Q&A Highlights

  • Consumer Products outlook and share: FY25 guide embeds ~4-pt headwind (NERF, Star Wars); industry POS flattish; lower closeout volume affected top-line/share in Q4; focus on sub‑$10/$20 price points .
  • Margin expansion cadence: 50–100 bps per year cumulative; video game capitalization depresses reported margin when monetized, but boosts profit and cash flow .
  • Wizards release sizing: Final Fantasy preorder velocity far exceeded LOTR (hours vs a week); Spider‑Man will be smaller (standard-only), but demand is strong; goal to expand MTG installed base via Universes Beyond .
  • Tariff assumptions and mitigation: FY25 guidance bakes in Feb 1 tariff actions (primarily China); diversification to reduce U.S. sourcing from China to <40% over two years .
  • CapEx and video game plan: ~$250M FY25 CapEx (~50% to internal video games); 1–2 releases per year from 2026–2030; co‑publishing/JV model (e.g., Saber Interactive) to balance risk .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 revenue/EPS was unavailable at time of retrieval due to system limits; therefore, estimate comparisons are not included here. Values would normally be retrieved from S&P Global.*

Key Takeaways for Investors

  • Margin story intact: Adjusted operating margin expanded meaningfully in Q4 and FY, with FY25 guide to 21–22% and cumulative 50–100 bps annual expansion through 2027; cost-savings target lifted to $1B gross by 2027 .
  • Wizards/MTG is the growth engine: FY25 Wizards revenue +5–7% with marquee Universes Beyond sets; monitor royalty impact on segment margin (39–40%) vs revenue upside .
  • Licensing/digital underpin profitability: Monopoly GO! continues to contribute; Baldur’s Gate 3 shows durable engagement; diversified partner pipeline supports cash generation .
  • Consumer Products stabilization: FY25 revenue flat to -4% but margin guided to 8–10%; watch innovation in low‑price points, preschool/girls collectibles, and reduced discounting for sequential improvement .
  • Tariff and supply chain mitigations: Guidance includes announced tariffs; diversification efforts (China mix to <40%) and pricing actions aim to neutralize supply chain cost inflation .
  • Capital deployment: Dividend maintained; leverage targeted to ~2.5x gross debt/adj EBITDA by 2026; FY25 CapEx weighted to internal video games sets stage for 2026 monetization .
  • Near-term catalysts: Playing to Win strategy reveal, Magic Final Fantasy launch strength, Toy Fair product lineup and collaborations (e.g., Play‑Doh Barbie) could support sentiment into 1H25 .

Additional Source Documents (Q4 period)

  • Q4 2024 8‑K 2.02 earnings release and full financial tables .
  • Q4 2024 earnings call transcripts (prepared remarks and Q&A) .
  • “Hasbro Unveils New Strategy – Playing to Win” press release (medium-term guidance and savings target) .
  • Toy Fair 2025 “Playing to Win” product reveal press release (new collaborations, product slate) .

Notes and reconciliations:

  • Non-GAAP measures and adjustments, including adjusted operating margin, adjusted EPS and adjusted EBITDA, are detailed in the press release exhibits .
  • GAAP-to-non-GAAP reconciliations provided by the company; key Q4 non-operating items include Discovery JV impairment .