Loading...
Docoh

Hasbro (HAS)

Participants
Debbie Hancock VP, Investor Relations
Brian Goldner Chairman & CEO
Deborah Thomas EVP, CFO & Principal Accounting Officer
Stephanie Wissink Jefferies
Arpine Kocharyan UBS Investment Bank
Michael Ng Goldman Sachs Group
Gregory Badishkanian Citigroup
Felicia Hendrix Barclays Bank
Jaime Katz Morningstar
Andrew Crum Stifel, Nicolaus & Company
Susan Anderson B. Riley FBR, Inc.
Timothy Conder Wells Fargo Securities
Gerrick Johnson BMO Capital Markets
Eric Handler MKM Partners
Linda Bolton-Weiser D.A. Davidson & Co.
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.
Operator

Good morning, and welcome to the Hasbro First Quarter 2018 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. of President Vice Hancock, Investor Relations. Debbie ahead. go Please

Debbie Hancock

Thank you, good morning, and everyone.

Today, morning this Thomas, Hasbro's Officer. company's with performance, are take on Chairman we questions. providing me and Hasbro's will Deb Brian and Financial and Deb Goldner, the and Brian Joining commentary begin Officer; Chief Chief will then we your Executive

available website. Our was earnings our issued release this on morning and is

release and and containing information include measures. site. covered call release are slides earnings our financial also presentation non-GAAP Additionally, The regarding today's press presentation information non-GAAP adjustments on available in and

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

goals, to make differ begin, the and Hasbro session these this we would materially Before statements expectations that events There I anticipated or expressed could forward-looking from you actual concerning other and management that forward-looking during results members in to results cause call remind expectations, or statements. are many that objectives of may similar factors follows, the matters. question-and-answer like management's

circumstances most Annual and forward-looking are statements Report today's in Brian obligation of after Goldner. any to update would introduce public today date no in occurring to now our Some the call. XX-K, I Brian? disclosures. our made those reflect other set release forth recent in on factors of our or events like XX-Q, Form press this We to undertake

Brian Goldner

term. an executing Blueprint We around dynamic us and the for remain a challenging environment. long teams and today. to for Hasbro Good focused excellent Debbie. everyone, navigating morning, joining you, you the grow Brand on job Thank world profitably our are doing industry The thank

efforts brands Consumers' in position decisions all transformation. began you year years, uncertainty In second the And in making to retail excess new the distribution important have the our other in revenue accelerate end. X inventory us pricing and actions the along third first the a be first doors thrive this organization's quarters, mobile. our our season. its retail the We brands, the engage moving The anticipate environment strong consumer How and the pronounced company fourth net play around capabilities. impact impact business. our have first we our in most the grown and with at ultimately the the Our developed holiday and our lesser discussed storytelling in in converging. past in are talents is global consumers digital And in U.K., will quarter. and This the in XX,XXX and and onboard to The business. while needed our skills strategic quarter, investing as and to continues within where is innovation, adding accelerate long-term and from discover evolving. Hasbro be to are over in in brands, of U.S. clear to Toys"R"Us have evident quarter created U.S. in commerce has more by continue than buying commercial already recent Much continue store and shopping impact half year enables liquidation brick-and-mortar closures in in brands financial a with we in of increasingly insights, will products to to liquidation liquidation with advance we while to in took ongoing rapidly are to purchase of world. at retail new The operations, a lower leadership, omni-channel, with with disruption our near-term will traditional we content retailers. steps we transformation and the global including Europe, we directions, working of entertainment converged teams

the we end U.S. conclude the at quarter, second markets We and plans. will still expect on don't liquidation the of the have International resolution

it through drive take growth will this about year be expectation we Our and will work and to a disruption, to in beyond. continues that XXXX

In the with clear inventory, the Toys"R"Us to work particular, through to addition do to entered carryforward impact, we in Europe. in year

also year. on and revenue reported phase planned these We the brands quarter's reflect factors our in categories. across business later to shipments The financials

Brands the of demonstrates our strength brands are takeaway and Partner consumer well. Hasbro brands initiatives. However, and selling

in point grow product Brands, total Brands to driving are high and Gaming than retailers. up across and innovations Partner of of significantly revenues is Online demand gaming analysis, efforts up and marketing significantly Franchise the remove and partner continues franchise, faster Our across Toys"R"Us you sale when even is point sizably. Hasbro takeaway categories. U.S., the grew consumer our takeaway In sale, each category. product from

our new liquidation in Our global being view category, an growth for to the consumer as key a and to retailers in opportunity brands beyond, We our gain forward. develop in initiatives, the going avoid are this up quarter process. partnering managed plans with share us to they caught shipping and

we us. new into coming year. We're this are Toy the with products, the to later put aggressively world working which at of Toys"R"Us trends, Quick previewed you consumer Our Strike impact around behind tap Fair and

we how the in We're the not we organization. of Importantly, how market, company. something our and taking happening and build we this is approach making the taking control situation, our transform are capabilities steps grow to decisions to strategic our

role production GATHERING planned, for the first and our in and our film underlying the brands. brands the across stronger portfolio. Hasbro's distribution storytellers. ability in even confidence Bumblebee, evolution in of point an as year under MAGIC: demand brands confidence have sale to with Paramount storytelling, with this December developing quarter. revenues our innovation, in new our hits environment. THE With Hasbro for agreement, combined began multi-screen great we converged and become outlook in this Brand this a the rapidly retail Franchise theaters significant in grew have the as important TRANSFORMERS: first down We marks of

the THE at past ahead next and this be to Gaming, we captured with in spring not of stage process data weekend, Hasbro NPD, its March, our is and strong. is weekend. the we're and launch later is by Magic: point-of-sale streamed continual it positive, of demand positive to during events players for platform, which GATHERING saw the Gathering on The launch. reaction goes more sale pre-release beta fan While XXXX. digital shared continues to being and fans Arena, remains new next to enhancements prior now moving Dominaria, consumer in Within set, MAGIC: making this period Feedback celebrated

into well trends. Don't Things as social gaming launches, Hearing It New such tapped and performed Step In and

DRAGONS DUNGEONS grew JENGA revenues. addition, and & In

second area. interest is see Brand sale consumers continue investing immense be BEYBLADE, from property early in further advantage reach Panther. ages, the more success the excited We that we which to leverage had is on, And all We couldn't gaming behind strong strong increased very of about MARVEL in of agreed of off its in year. and start this and this and potential. to to lineup point Partner Hasbro a our Black MARVEL with

ensemble of Black origin capitalize Galaxy. ever and a Panther Captain items year we Thor; As release on Panther Man; have including new deliver line season. from Studios performing film, line products of the the even is the Point and broadest to May of Black product America; film, Iron created the ahead Marvel sale and for demand a We're result, of Guardians holiday expectations. throughout everyone's home the well, working the satisfy entertainment are Hasbro key the to

quarter. began the in shipping Avengers: first also We Infinity War product

see the WARS properties property We continue remained to throughout #X contribute to point-of-sale NPD, STAR GX the year-over-year expect XXXX. both comparisons. in to improvement the markets according and we in

Solo: product, is May A Star available Wars film's ahead on of Story release XX. now the

crowdsourcing our Has During we the quarter, launched Lab campaign.

amazing the This from Sail Hasbro, largest exceeded initiatives. campaign expectations to this ever power vehicle STAR $XXX is for of but consumer WARS not Jabba's over the Barge. launch showcased with innovation meaningful from product. initiative team, first digital The our direct-to-consumer engagement X,XXX backers our only Our

Looking year, We the importantly, and to have challenges while position arise. business be believe our continue most to us opportunities decisions going to for forward. to new continued there forward in good a going we XXXX, made best grow are

Our through digits, the only not double digits this grow We exchange. grow innovation, adjustment. be absent year both firmly can over to developed entertainment years. markets are medium-term over to that and years, believe in we gains a impact in X place. mid-single share guidance, beyond and emerging few will the low continue foreign operating of remains improve to can economies next X margins of we market sustainable, believe shared but February, next which But year, the XXXX will

Deb? $XXX anticipate million operating we million. Finally, annual $XXX of Deb. in call flow I'll the over range cash to now turn the our to

Deborah Thomas

to it U.K. are on our issues. to from have and we're This you, and position. And is through our and working a organization, so everyone. for accelerating morning, steps a liquidate our resolve Thank to very in more healthy long-term growth. effectively actions strengthen and the We transform Toys"R"Us U.S. early when U.S. But taking be including the even it great its particular, We're was quarter. Hasbro the shown in and positioned business, outside the Brian, commercial financial challenging moved stores said challenging, good teams became would planning executing

first period. magnified in business our this and changes are is quarter The during smallest quarter, the

now, second year, the store is there and half. all disruption near-term International in in don't of completely happening this to we decrease While several offset plan their the are Toys"R"Us the businesses. will remaining Incremental uncertainty closures impact

material further While not we XXXX further impact expenses. do shipments, expect this will

we related across declined. in our payment International XX% dividend million of the Europe expenses as revenue retail And was the the increased declined Adjusted is next revenues the revenues Brands, segment, range impact we Canada the but is to revenues bad efforts $XXX.X lower only through including both $X.X our and more foreign Emerging exchange. Europe. Brands up, were for Toys"R"Us and declining million Our of grew revenues quarter XX%, International in declined decline segment The freight Retail Toys"R"Us, declined lower America cash year. related but dividend revenues Brand debt. flow the U.S. million billion takes through shareholders result to revenues to our XX% an to extent, In was Toys"R"Us, inventory a the share from returning the of operating segment and primarily and targeting $XXX to by which Asia from Gaming quarter were lost and impact outlook and lower of expenses. evident a operations. with Partner the of work in just and effect result and working warehousing in remains operating and to a million in slightly, the results. carryforward repurchases. $XX.X $XX.X The The is segment higher loss slightly. other and million, flow dividend bad which U.S. Canada our in due in operating managed around U.S. quarter the sale liquidation debt XX%. Hasbro clear Canada inventory Brands through, favorable uncertainty Emerging and reported inventory liquidation Franchise revenue revenues cash U.K. Point with through profit May. $XX.X ended An than in while the and Toys"R"Us offset lesser are Toys"R"Us $XX.X under we We Latin inventory U.S. million quarterly worked and $XXX despite million to for to increase intact. charge retail in are Pacific cash and a

International receivership in This segment put Toys"R"Us. $XX.X was during million the associated retailer French reported of with The expense an $XX.X of quarter. million. operating a includes addition, loss In

Licensing Excluding result loss digital XX% the Products behind primarily in revenues lower million. Consumer adjusted segment and operating an growth revenues. of had operating increased The $XX.X of this the item, and was segment Entertainment gaming. loss

higher more cost by however. impacted the to we transformation. recorded on Adjusted the contributed operating revenue throughout to declined meant Hasbro the from quarter. is adoption smaller be the and at commercial the basis revenues negatively organization our first could due margin XX% received bigger discussed quarter. standard a the the recognition operating It year the absorb the revenues. a Toys"R"Us increased licensees Operating in Toy As fixed revenues. in associated ratable not which segment's profits The our also profit severance with Fair, revenues uptick of the expenses will profit as fourth costs to from lower company's Overall, early year, in standard opposed new of in higher was adoption

Our profit expenses level Toys"R"Us current achieve absent severance, line that we could the and year outlook, is margin an of full XX.X%. with associated with in operating XXXX's

Brands, I year, Entertainment profit margin Franchise including in operating as efficiencies as and growth Earlier Brian Licensing increase can Gaming revenues drive in this and As we investments. future in system and from profit going years. several markets margin improvement higher-margin we operating well outlined said, to our margin Hasbro believe expansion emerging profit forward, levers our

is in higher-margin our future shipping this commercial by near-term retailers. disruption. and outlook declined growth pricing Entertainment driven Licensing into disciplined Cost global of as approach Our revenues to by percentage product a of a impacted not sales and revenue, and

on We expect not lower cost to full declined perhaps in level match, basis Underlying sales approach, year a expense the XXXX. decline reported of XX% revenues. on royalty and we Partner Brand but

royalty reported our we for Partner Brands. Toys"R"Us revenue as expense incurred increased in quarter associated our with expense the However, accelerated lower

as accelerating notably $XX.X flat up to associated systems Product of full television of expected in increased and with the slightly a revenue programming. cost versus be of amortizing as expenses. royalties several full our to in be due bad Program organization for revenues Program IT items, addition Toys"R"Us THE a the down and warehousing line production to with declined to freight is to in of SD&A PONY: the For X.X%. in dollars of rate consistent in SD&A percentage from versus and year, basis, increased year. underlying million are on revenue, to quarter, should percentage percentage slightly as higher Absent MY exchange, year's development foreign includes debt transformation. last we're a MOVIE expected production year expense unusual full be these but amortization as XXXX. LITTLE investment items, last severance year commercial amortization a

full underlying year a as SD&A for slight forecast increase Our is revenue. of a percentage

Other a operating foreign year currency Turning to on due our slightly, gain smaller this to results below profit. last. income declined versus primarily

Our reflects and The reform. discrete XX.X% to a quarter, longer But guidance. reform, of million under impact XXXX. of underlying we $X.XX our the lower for liability or tax increase benefit also an underlying an reversal rate tax during the compared of year a per in was rate year related no permitted rate, $XX.X diluted share recorded charge XX.X% benefits tax of and XX.X% absent of tax new full the tax last U.S. to repatriation the

We additional require will year interpretation end, reform expected was there anticipate was As new on we will charge tax and we took at forward. stated the clarification there change to be then as provisional going guidance to and the that law. consideration

rate expect be to the our full at our range end of We underlying of tax projected high year previously XX% to XX%.

Inventories in the material expect charge recorded share adequately our for Receivables favorable days. million stock. EBITDA-to-interest have Toys"R"Us earnings don't expenses historical Toys"R"Us for of adjusted per $X.X reserved share Approximately reported the $XX.X targets. ended cash, forward. in as were was going ratios, held with shipments. quarter, we and to believe quarter in quarter, debt foreign and the repurchased X.X first we result are outstanding was the increased and in the at dividends our to million paid X.X, per in of and common debt-to-EBITDA the any For $X.XX, and $X.XX. We we our We a loss more inventory our warehouses $XX.X sheet We billion revenues sales was bad balance lower with quarter. and XX associated respectively, of increase Hasbro's are strong. in and during earnings exchange. decreased days a X/X we X% on is Both

retailers also discussed, do the retail Europe. declined reallocate this our in work declined, inventories As closely further U.S., quarter. have Internationally, product. but with Brian the retail In in working have to we're global we to inventories

our our we and disruption and the market, the In are prospects. purchasing targeted we We out lineup levels. and strong making seeking are lower retail the year. very in progress in plan confidence a brands, to for inventories near-term but closing, have facing are rest have we to on are Consumers Hasbro long-term of

global market this years. ensure our retailers and to future approach are in We how in the our success with we have year deliberate brands

as next put as on footing the soon taking us are return necessary are solid financial year. profitable steps to Toys"R"Us growth We and and behind to

the for will We open now questions. call up

Operator

[Operator Instructions].

first Steph question the with of Jefferies. line from Our Wissink comes

Stephanie Wissink

comments questions, just dig more, inventory. a the little your bit on in to Two Deb, to

you in to the second just we unpack as those FX. the Can inventory think related Specifically, other some X/X ship of there's to what increase mentioned WARS the you quarter, I Black entertainment to inventory X/X? and curious we related looking be to Panther. anything is of allocated if release initiatives? most Avengers STAR and Should at then notably home that for plan

Deborah Thomas

to really our right. balance inventory. shipping. you're exactly X/X good due FX. due We've in of inventory the is to -- About Avengers The Yes, Steph. was And remainder got good increase

great that are as yet. the initiatives this haven't really, leading market We the out we all we new that well up have the into entertainment and all year great the as new initiatives coming released, into

So all market some what our initiatives competing at liquidating decision we're didn't our from in good inventory to we seeing inventory. a not Part of the have was deliberate lot new because our to want into retailers. with is our good, put of it inventory

So down, at the retail year, particularly worried we retail are into inventory the From inventories market and will in internationally not U.S., as see inventory throughout that standpoint, about the well. a and it our all. moving we're

Stephanie Wissink

how around that seeing that we're vendors. hearing had right. and then that's talked inflation long little consistently duration continue in to expect All A a and And your you markets talk one about you're world? freight many about it within across the expenses, Can you follow-up. vendor higher something bit where

Deborah Thomas

really it's it's from sales kind it's bit expense little of higher throughout bit due impact trucking new first seeing rules location is because U.S. of last different to and We the -- contracting coming driver in is retail Europe in it's coming opposed for The for shortages. the it highlighted outlook. as quarter. to selling really supply our a lot because device logging cost demand a see to is throughout you upping the XXXX, expected We're and of and the it itself that the selling. and increasing it but And electronic inventory a well. from a quarter manifest SD&A and really it really as Absolutely. industry the And getting in to

in it's everything about for So outlook year. our in talked and we've the

Stephanie Wissink

back Brian, you're just really sit you, then changes in versus the drive how shift, now commercial observe channel for business? And I your And biggest to some or your the opportunities to organization. the making we competitors? some trend about the bigger-picture, X-year and see as think should you advantage one you of But the see and where do X-

Brian Goldner

Yes.

our continue believe about excited had U.S. for key grow about business and So lots that own United in XX like markets retailers. those with grown, And and digits. pace mid-single we've made we've #X with liquidates, low growth in we've opportunity in in fact States. year-to-date, kept very we others. of meetings has and in We've of grew our GXX company the of business. the held industry Toys"R"Us They're perspective, the and the in And the markets markets seen industry X Toys"R"Us the in share will U.S. that NPD to to Toys"R"Us the the We represented through garner as market and global kept pace X/X fact, remain our share to

this, a for So as we share there's retailers. market our real other through move opportunity

hold. marketplace had retail made progress in We converged take significant that seeing the are U.S. We

those we We to you Toy that to had And efforts that doing. lots have to like markets begun we back in indicated of were We had great those Asia. accelerate we onboard Fair needed at capabilities capabilities.

well that to we'd retail also global set channels For global the And up leadership have felt in there those that opportunity about. that excited an the team, efforts the as we accelerate And example, we Europe. very new had we're online as team. we business,

industry. are to wanting markets, our is that So also global And retailers approach to in new taking us. the a grow growth there with recognizing

new growing made conclude in really that's brands. as how We and June. expect that grown said, the we by really Deb light are liquidation good to about of are we some But the our inventory, that have POS decisions inventories market taking inventory, retail in down. And initiatives deployed place we near have term

Operator

is UBS. Our the from Arpine question next Kocharyan of with line

Arpine Kocharyan

by about percent but about is Could you breakdown I less of time? the quarter? decline this talk Toys"R"Us competitors Toys"R"Us could you retail And in specifically being year, you give what impact the was later exactly disruption please what this of percentage at a absorbed know of talked from being

Brian Goldner

Yes.

you but existence and half it's Arpine, short-term our this conversation Clearly, Toys"R"Us look business situation to States, were Toys"R"Us. in year, related different in first fact the isn't. So this would a is still United directly be first, of if the at the in in very it position the

market building meetings other to They're transform new transition opportunity with time It of garnering And take the some retailers we And for time and so windows the a plans plans business is fact, to from are those the that in the just retailers do when moment additional number retail an for initiatives some that our additional Toys"R"Us in What's absorb additional very can had out execute teams that share. to very Having and of new way. of good just space our exciting building you the that as excited, all to does about is believe industry. I appreciable heard takes recently, opportunity of we're that. are those moving to promotions. They're new time building finally move liquidation build quickly are retailers. really forward global you excited present. our

Arpine Kocharyan

because Easter the clarify, up a And on helpful. follow-up could the inventory. I retail industry then early? back to going That's started And was quick numbers, Hasbro POS you So just that have Easter-adjusted? and for easter-adjusted is then

Brian Goldner

Yes.

categories, And for world the it of except strong and across for POS every the of growth categories, Easter-to-Easter, was for Franchise up exception our Very in first around Brands. -- the was well Brands, Partner first it retail Games, up up with So as Emerging business was our Brands. globally, the all up was was then Emerging the one of and it was for up up quarter. Brands. And

So Easter-to-Easter, the business was up.

Arpine Kocharyan

Because inventory then But follow-up quarter seasonally I That's on sort magnified was helpful. I'm to see things up that in you of for top -- have XX% were year-over-year, have line the if of holding was weaker quarter. hand. Easter FX-adjusted. it lighter one that Or little you of on even get of bit means surprised to year, am inventory been surprised not if sort on adjust quarter. Toys"R"Us because was still which the this that, that sort And a substantially you early it this missing more more a hand, closed should you actually on I something? when hand

Brian Goldner

Yes.

followed on So Toys"R"Us incredibly selling made specific the strategic are around that initiatives our business and they was announced opportunity belief inventory close well. that Toy our following fall, we're to for investors, by, some bankruptcy last phase around first liquidate. Recognize to declared decisions Fair talk brands we've And some new they Toy the that our how stores. Fair, would to would the then of begin deploying then that they

we some a in short-term really we face inventory are about the selling where point, that at do So brands for really well liquidation. new, good decisions that of made deploy

we Star for where there those Solo: some areas, Obviously, deployed, and we've thoughtful as we New that as inventories of took Quick Fair. like head initiatives initiatives have sort from Story. that's into those are Toy York A previewed inventory Avengers dates, deployed but put our coming shelf-set for we All initiatives the we've Strike we quarter also you new where new So decisions. at we've been Wars second about to where

the the business, the are good retail of and in the very comfortable inventory. the feel world. and is And our of so we around very feel the categories our across the we're quality POS inventories seeing We about different about fact U.S. down

them. really those some inventories grow excited to excited we're our as really I building planning run our build who, we're business we're said, with are plans of out retailers, then now. global So about initiatives with and those and And to our

Operator

from Next Michael Ng with question comes Goldman the of line Sachs.

Michael Ng

surprisingly one about for margins for a talk have you good Brian. Deb and gross despite you too. why deleveraging well outlook, was I the up lower-than-expected quarter, Deb, that and one think I this fixed from cost gave revenue? guys Can the case held

Deborah Thomas

our had some business that We way. XXXX questions talked Fair we approximate our about away, margins with going Mike. does gotten fact, business that Toy planned at Toys"R"Us levels. And expected thanks, our could mean go Is Well, the about we agnostic more to fact, We've in gross said will other profitable gross It's And down? we're a that that margins from retailers. margin many times, gross profitable as a business? a not than standpoint in business we've more that.

margins. priced So that's focus. in disciplined really we've very market, our as prepared those the been and it we been we've And into we've when in when how gross we remarks, talk our what about to put put it to maintain

Michael Ng

might you the tuck-in has? or what Hasbro and Toys"R"Us relied of you may to Hasbro toy And to about channel players? take and Target, affect lastly, have toy smaller other opportunities more Do the like opportunity toy see for these landscape? the For industry from the that how allocate more create shelf than other example, of Walmart sales that players? this then happens space Okay. talk do a then can will well-capitalized exit some Brian, And And you on anticipate some market manufacturers to M&A some to share toys? retailers,

Brian Goldner

Yes.

key -- been in and if this I've there's meetings lots lots our grow with having with us in of category. of interest continuing as to So you mentioned, retailers, and we've

categories and the yes, toys. I business game it, them. key to see assigned expect are would to And retailers As toy for space see incremental

for a just time in States. of plans, United across some the There's different kinds takes that robust build I number particularly a great it opportunity that think to Toys"R"Us shoppers, number and they're were a building of of consumers out. dimensions

see And we Most brands. Obviously, continue we are Ranger to brand notably, growth. great more off we'll going Netflix. like it ROM in that have also storytelling of Micronauts Toy at to said And our Top For about heard develop we're at with and and selectively a fact around. develop you've out We're with new Monsters. Paramount, brands us that business. very us, our talked up Super to opportunities the relationship and that, be more look pick significantly course, marketplace. excited about the opportunities. on we to an then to we're from work beginning And for with and Nickelodeon M.A.S.K. Power we robust that. of take now relationship We've kicked about we opportunity opportunities property. opportunity us vault to continue some substantially great their our and believe to there's Wing excited Visionaries also will Fair, to give the brands, managing And that some Having

need Toys"R"Us particularly. picked the retailers, and portfolio. again, thoughtfully beginning to notes business regions of by that some U.S. transition the retailers And about then number that that our we different smartly being half a of some we'll through, some other brands. into to then perhaps just other So brands lots of coming go it's the around for Really, of companies. bring our And new new through the this of positive year up in innovations first and adopting or some we're transformation hear

shortly, that And have hope. we on so we'll more

Operator

of the The from Citigroup. next Greg line question Badishkanian with is

Gregory Badishkanian

the you the the heard Could maybe I don't I POS in just the U.S. and quantify just number? global think number.

Brian Goldner

Yes.

and up in globally. up year-on-year, it globally, POS up double the in So single digits And and was up double the U.S. high digits that view the Easter-to-Easter. digits, double number Easter-to-Easter was was digits

Gregory Badishkanian

had meant away think right. that the just from what All does infer impact, is -- next Is about we in then what about you Toys"R"Us that the we as that Good. And of year? first said? quarter that can go -- you Okay.

Brian Goldner

from us. I the get We've initiatives brands, reaffirmed beyond. a that of this portfolio, back our both of the we for great and teams we'll believe, medium-term and XXXX kind to guidance the We're certain growth and Deb absolutely morning. here lining I have achieve the Look, up are Yes. marketing growth seen that trajectory innovation growth. our the believe you've and plans on kind

we obviously then And the in as other where, world in in X. really U.S., Toys"R"Us retail by depending that's around inventories that the take, in of was away. in for happens our year that first Toys"R"Us done to And and the that on the said, selling quite Qs we I brands are as and this, X said, historically, to goes to this of half It's are X down. and begin about going plans Toys"R"Us, will what I well year. through U.S, what the So that the robust earnest around believe. have X/X with work impact particularly other build regions being that a QX business But retailers

Operator

from is Barclays. Hendrix the Felicia question of Our with line next

Felicia Hendrix

you've what that the we indicated but guidance. rest said. you based So know disruption, revenue give for for you of very map year if continued don't side, for that light to And in Because how not more about you've it at quarters could stuff. the Deb, will helpful the levels. think terms given expense potential think I revenue Brian, the side, and I But in the liquidation. be eliminate this estimates for could the helpful be when declining item it you've would of year, for sell-side just revenues. trying a really shouldn't of miss Toys"R"Us, specific the on and is remainder would But to there year that walk like us know the the think believe -- road of but further specific a the very in thanks Deb, think rest you of us impact the the you just more that morning, to color on on give revenue if the be can lot spirit you below-line the through color I reported to would the likely of regarding us us all company of on be your the

Deborah Thomas

spread we to first and believe And quarters we quarters. think half the confidence go at of think Felicia, Sure. very just we we of the we that low-revenue business. Toy if -- and the And the said, Well, second -- in we are early be back to year, that. continue look we'll would our year. Fair knew we there disruption But about have what the normally Toys"R"Us, can overall in the about we as

When in a And we'll still or a a disruptive, it'll start year impact quarter work within and we we're through impact we'll that's you the bit, overall into next a course, of year. out believe less year. that very of But the to bigger business. the overall, whether about it's first stretches that first year period. in confident see in part we So be season, believe get holiday our

good beyond. guidance. XXXX shape. business our We to grow through in that our XXXX us still confident a our gets We reiterated We've in plan in plans are and have medium-term

-- that's there is as and So consumer takeaway it's well. good, really so

through think So for about early of the which really more just it's in working half will the pronounced us, disruption, be the much year. we

Felicia Hendrix

Okay.

back bit. peel layers let's little a So the

like, it fair? So for you won't probably revenue growth. see Is sounds that XXXX,

Brian Goldner

are it's Well, quarters retailer think initiatives, three Qs U.S. at all I four to the look it and in a look, way robust you're new the transitioning and bigger with is that support, and entertainment present.

has a to over Now this together. all plans period the we all of just very have short put happened time. Obviously,

So we need build plans the those now plans. execute and to and there. those We develop opportunity see just

to So in the growth around quarter. that's Products Pacific. Entertainment the Consumer and business, you growth process the and Licensing in and Asia there. in And We out it look our if grow. then seen at America in and digital world saw continues go We've gaming thought Latin

to has QX business, feedback Gathering which of and and seen their Wizards The believe to play but we've as still continue the increasingly as response spreading We And the game. the our in which been opportunity beta, Arena, Dominaria, well, Coast closed Magic: comes team to great phenomenal. the is in in

We that. continue enhance to

with broadest we strong support around retail So that world. I real are the of portfolios teams plans in think inventories developing the and strengthened and one the down, with sell-through, U.S. retailer have time across the

it's third quarter. relative as Toys"R"Us days and the liquidation, to -- we'll closer to update we just and fourth we you the early get So

Felicia Hendrix

Okay.

to helpful. understand So the be mechanics, would which better maybe just

on more shipping so not obviously into any Toys"R"Us, You're a year-over-year basis, that's decline.

Brian Goldner

that That first in stopped had would stopped quarter. that stop -- in the --

Felicia Hendrix

of the people Right. what would impacts your other the competitive And elsewhere, pricing would affect unknowns, just just terms and how liquidation take. in be sales be then just the would

Brian Goldner

any have sell to they through No. getting inventory, Remember, had. not inventory the new they're they so

space to the been market said, those the building that as in robust our retailers we've our from and our of shipping Toys"R"Us brands and So Qs more X, partners retail grown. really we up even caught growing. with outside about that And liquidation wouldn't around are plans thoughtful get for of see is initiatives historically course, the coming that where and window, plans now you'll inherently X

-- And are it's those it's and business. latency, weakness, retailers and new grow it's then But So lag again, and about intention of an executing ambitious about are just controlling between executing. our there's their and enthusiastic no -- business. develop our matter plans the a to very And plans. we

Felicia Hendrix

Okay.

would So of given the first, size the like in -- probably, ballpark? of kind but quarter, magnitude the second somewhat you similar less ballpark than the say a

Brian Goldner

Yes, size come is unknown remember, the look. and of Yes, historically, historically, again quarter that in QX, here the I think along liquidation. that discounts lower-revenues with bit a the a

goes understand, get conclusion, the June. will it we liquidation towards bigger. all discounts, as And conclude, in then on As the discounts percent the

discounts go the on So larger.

Black teams the them for new they quarter, Avengers of around plans that third through. will and part and was particularly number inventory earlier certainly, the new fall new our then new execute no throughout the other initiatives. around initiatives We for quarter, and have. more of the entertainment entertainment first And and Quick QX, initiatives It's in fourth a and new that inventory that to there's so shipped to coming and coming the the for Strike Panther, home from for holiday. begin innovations sell robust initiatives the then in However, quarter, second the

Felicia Hendrix

just million million in reiteration having impressive, sense. I otherwise, for But range what's is in me to just like, the just putting flow, number. then shifted to with of the $XXX here. that going I'm reiterating last on $XXX cash your where makes fell And problems just, because presume That operating Okay. given you you

Deborah Thomas

We range to million still operating cash believe for year. of million this $XXX the $XXX of flow in

Felicia Hendrix

just was I of... that, thinking kind know I Yes.

Deborah Thomas

Well, the number, going exactly to I'm not tell you Felicia.

Felicia Hendrix

where mean, it's that just, I you fall... No. it would logically, seem

Deborah Thomas

range. isn't probably probably it would have from of top -- we to say, the Suffice moved end at that

cash strong. Brian business. However, a The remains and consumer our we as flow said, will our generation it a home. have wants product, find And strong

So still we're Financially, cash our flow we generation. believe our cash, sound. in

debt's through going Our work not this. will up. And we

Operator

from comes line with question MorningStar. next the Jaime of Our Katz

Jaime Katz

surrounding new of spoken be some half, guys you'd X year commentary that this the until just said to So I'm is introducing that are Toys"R"Us initiatives are curious, at going events one announced. you at, coming the that you've us. haven't out there had what the anything until that's behind been that these recently assume that I not And second new postponed given and about of mentioned

Brian Goldner

introduce please take I won't said don't No, what initiatives. as Yes. that we new

quarter, additional for We that fact inventory trying we good was QX. have first was new plenty of of on good the would, in I toy quality. initiatives to with comment that

liquidation quarter. market Toys"R"Us. plenty would new want looked shipping what in want to initiatives of didn't like the that in deploy good didn't to obviously liquidating the have initiatives caught second Obviously until But So we we in the up on be timing in like. new put perspective to and a and had that through what looked the

the around initiatives release Panther. Black have of We home entertainment

Avengers. We have

least We coming the one in Quick have Strike at initiative quarter.

We have retail seen our and of to portfolio, from I across our we've lots growth say, continued of for those one And brands. in Brands, Franchise new and have growth innovations Franchise POS number great for our a Brand strong momentum. of every brands

quarter. between the and X and are that inventory is into where new-initiative are X were we deploying So third no, we how Qs all then fourth we, and to trying say going

Jaime Katz

then for curious Thank for Okay. but mentioned clarifying some think I And Top for Wing, you other -- had I'm partnerships. of you that. license these

a bit you participating, to record? them? are for little in content-driven of to these have I is significant people because in easier sort more Is such there guys with more are Or having this, experience bat getting competitors track obviously, because it proven interested more licensed partnerships expensive that getting like, actually obtain portfolio coming think you're of it licenses. a

Brian Goldner

to pleased with We're earlier very more continue build and in ways. earlier stages our to working strategic Netflix. We're partners with relationship and

the we produced work Stranger game on them we're performing retailer we in a rolling the as incredibly an early on we that began last very it animated their And both Things you for fall. an them series on days, It's well then the As built network out was -- and Eggo Stretch MONOPOLY with to an it with game. well, nationally, for And know, sold now on -- in Armstrong, but streaming. series. as well original product

have I'm we talking of lineup MARVEL. And that are you the know to Nickelodeon be as continuing Viacom. we part selective you partnerships about and focusing say the again, about. Company, do would on we then the And incredibly experience Disney take strategic we on. If is we Obviously, story, what what relationship continue know the of with about build and to a and lot from excited Walt Paramount

lined has there. have coming FROZEN, of X we're and And year WARS, then this X really MARVEL supporting into a and significant XXXX, We reach going the PRINCESS way and very with excited STAR where and well, next FROZEN additional movies DISNEY about entertainment. the we are course, expanding our Solo POS in extending really year. And movie. up

bring So I dedicated with an teams, their about our of partners. adage some change landscape a brands seen up at focus. the innovation And I that's our we brands haven't the appreciable resources. and think And the been best great and with really talk here consumer those And we way. brands the company lining to is in insights again, treat in like

Operator

of The line next question Stifel. from the comes Crum with Drew

Andrew Crum

film. and Solo Europe? WARS, to STAR take And to as give ahead willingness the inventory inventory on inventory STAR relates update there the WARS expectations an guess on retailers' Could more the in of specifically, around situation it I overhang you us then address clearing

Deborah Thomas

pockets Well, do Europe. still a we inventory, We had down but excess we that in work the continue we retail inventory overhang U.S. of Europe. think feel in inventory the through to to in bit that work those there's is

So lesser extent the a do question? STAR take lesser year. And we'll and see to we throughout the you want move year, as albeit the that impact through us Brian, to WARS

Brian Goldner

really then good STAR moving the really WARS good And retail -- we've -- inventory we'll seen We'll quarter. good sets array double sell-through The us team's Look, The kids-oriented a product of well. then, And in STAR very We're now know for Solo we're also that digits, May of entertainment of And April excited the new is job coming now. hit shelves will very down STAR done movie. WARS the through. I And track through second to the we about of excited inventory course, Yes. about for continue of year. the And half and really that's in a the it considerable Company, from up we'll that an that it's obviously, We coming the also movie year. is that's sell throughout well-timed. very way. WARS-branded initiative think there. we're Walt any announcement inventory day a that. Disney about exciting but coming very in support excited first

Andrew Crum

year, to Got that that XXXX, start. license. X looks shifting then $XXX year it. I I was the revenue believe how that you the was it as did year off of can compared it to of was of that a million strong trajectory to, And and And you've mentioned about BEYBLADE license, very guys talk you BEYBLADE, X about think

So as to relative to just tracking product curious how BEYBLADE the last is cycle.

Brian Goldner

year well. uptake. great BEYBLADE It of second cycle Yes. seeing this incredibly the the is is tracking time. We're

app not number to SwitchStrike streaming time. which it's change it really to of burst. analog off-line play content people this Netflix. the fun played, the period, as world the know, going strategy you level they and as incredible played play. the adds It's as tops the their the and playing a competitions dual a fact, that is millions of in exposure, we because have And specifically pertains to digital And can pattern the on of last in product, broadcasters inspiring actually comment hundreds launching We around But Drew, thought rotate I'm have this way game new with play. and both of online, from is well young an games also being being as

seeing grow near-term And this. and other second try to going think that BEYBLADEs. range with obviously, then not want we it's retail other excited it's at and about played we're cycle. business range I word-of-mouth part this it a of However, because, to course, who because as also this of have that it playing certainly to to sometimes partly we with in of we've I'm need has hard told you obviously and incredibly on out going retailers about it kids the disruption that about accelerating now And online. and being lot it years replan think to is the

Andrew Crum

one there's with game there portfolio phenom impact and that Okay. any one just is battle just been your Or across Got kids that it. this And maybe Brian, which success there the that layout me. free-to-play then there's for any business? from video last teenagers, sense is incredible impact an sense Fortnite, on not. it's -- is

Brian Goldner

game. Well, we really fun like really Fortnite. It's a

People them the up obviously, want, Fortnite they Our play We that anytime They serving any seen business game. haven't game. at impact say to digital gaming And also are both playing anywhere. is that's fantastic. area them as in an we respect think really games, and increasingly the and I as way licensed well would like And should Backflip. we're we games with similarly. our

Operator

FBR. Riley next the comes Our question B. with Anderson Susan from line of

Susan Anderson

performed that talk mean you product if other if, similar I Toys"R"Us. is the And NERF more What Europe versus to some I think gave -- performed expectations like I coming than half. maybe you than NITRO will by Were Like, And could in worse And there things was? color had revenues? you include saw out products, you was the you also the for impact new -- expected? your quarter. second pressure but segment, NERF and wondering it? about just give maybe know on some something points of how if you that performance this was could how any have in excluding

Brian Goldner

Yes.

in X Obviously, POS. NERF have up our sizably Rival, fastest-growing those then of segments a of segment this and new is Elite segment we are number then So initiatives coming our is year. from and Nerf Modulus. All largest

product expanded channels made because and price that and we've product in development a points and building some addition new to development of there at have in growth opportunity. new We different new

new retail half. Our the And inventory bring is for initiatives second for NERF we'll down.

half We have about. major year haven't the second new of that for about a that we're the excited talked we initiative specifically

so time, well and well. And we're that the about track incredibly that performed And over continued NERF continue continue we internationally to obviously, NERF excited well U.S. has to will NITRO in progress. believe, its

three if at look think the I categories, first year consider of customer, a year you our quarter with was course. you a the in Toys"R"Us, year just an fact If obviously ago, significantly situation than that ago there was we shipped, number this less Toys"R"Us evolving

manage so transforming organization, digital we and and bring social transitioning including of changing our assets, team, our to our data commerce, analytics. composition new sales And that retail redeploying, we on how retail including and business, to are digital marketing, content capabilities

really the business. All build of important those how elements we for are

XXXX where this Toys"R"Us is business that rearview that's And And in is to the And it that's I Obviously, the U.S. few the the So we'll in clearly, view. and quarter. is grow through. would working we of quarters. point Toys"R"Us the in what first say, in in put our continue reason beyond. will mirror we're next

Susan Anderson

that on Black products you And Okay. the also sets continue Panther. like it one outperform Great. up That's War setting Infinity this up has helpful. And the reads think a movie? to MARVEL last early for early then there Avengers: great well. this any on been Do to and looks Obviously, is year? success,

Brian Goldner

Yes.

is incredibly So in quarter. first MARVEL has performed sale for outperformed the strong. MARVEL well and The point very of

really that the -- lineup Spider-Verse, are Panther, for Spider-Man: product calendar this even about excited Venom stretches there innovation lines, have the and year releases throughout all including We they're we're supported X supporting, throughout robust a Wasp, and then our Deadpool, Ant-Man in that's We're and theatrical the by Avengers, that and Black lineup Into product lines. year. fun and very

Panther, very and entertainment for which have is products We're we is that's home We around great. a product which the product that's product, Infinity role-play the our in also Black Hero the about Avengers: Panther excited Gear, have including augmented LEGENDS MARVEL coming for War. for holidays, And Vision modular coming new that system. the Black reality customizable series window Assembler beyond

of lot so from entertainment and excited. So MARVEL, again, robust innovation a we're very coming very

Operator

Wells is of with question Fargo. the next from The line Tim Conder

Timothy Conder

And previous have sounded take questions of had be the inventories, in a Deb, it channel, to here. it feel comfortable. normalized, the in you that get pretty you sounds on should those in A couple the a in lot answer, year elsewhere mentioned like like, answered, normalized channel. but been the those Europe

-- then So and when then company-level inventories just would And term you back the you to to normal? do reaffirm levels see that. that

Deborah Thomas

And quality going what's a up be with also in going it's those and quite bit and Well, it. revenues, through talked being Avengers yes, retailers come or or retail Walmart our and NERF a that and have of cutting certainly was Toys"R"Us large inventory, we as omni-channel why retail online is or more play, quite a Europe. acceleration like like BEYBLADEs Amazon Alibaba to see we believe, the it and still that the levels Toy go-forward, We piece with about of although BABY that said saw said model, From Fair, a we've to an do the into down that good a and away, year the or items up end about last and ALIVE we we have continue of more to we bit it Tmall. work side. pure to Target; on move like there, pick of bit we a what our at

our past in that they have inventory we supply retailers right we make hand much to more the traditional and it You that they longer to would going have put it the run through when to inventory brick-and-mortar because a when -- expect -- when they to it. want take sure that tend levels than I closer have. have would want than in And time those higher they're lead to like retailers warehouse than sell on

revenue bit a higher, we not It be to but would So expect good they as levels our we inventory move, higher the expect than the we inventory in all and held quarter will probably have past. probably decline. bit It this a as they'd inventory. run is deliberately because high with

Brian Goldner

you on the if import first was shift it just look point, side. mix domestic five To domestic of Yes. at in points the to direct the quarter, higher Deb's

So it's XX-XX, XX%, XX%.

points five went it So the higher side. on domestic

Timothy Conder

which on been couple Okay. industry much or in of has And front, then Russia, there? that very the strong provide over for sales your years. the China the I relation to little in comment bit International Any in update guess not us and a you last could

Brian Goldner

impact in cleanup, it We full forward, continues as was really us. XXXX. more the talked through Brazil we're And Yes. just to the move in very us. finishing China, some similarly, well emerging emerging the the and well. Russia, good beliefs up moving and And for time. up business. of that track we that markets about where And optimistic sentiment about and we consumer Chinese to had work absent a Russian business it well was It's year digits, very economy business the the again, Brazilian retail then for there. some growth inventory double Asia will about grow our perform clean we perform reiterate quarter. to over our and that continue business for been in seen feel markets overall wanted extremely finalized we We've But our FX, first

Timothy Conder

then expensed QX in and And here? changes those pretty Or you were for Okay. accrued lastly, organizational well that any more anticipate here?

Deborah Thomas

year. that as do happen, we the throughout throughout said, planned we the business. this actually, had always things there's So And we to

level However, anything throughout we wouldn't expect the of year. this

Operator

the Gerrick line from Capital Markets. of BMO is question next Johnson Our with

Gerrick Johnson

bottom was XXX? from what impact revenue onetime line and So ASC the

Deborah Thomas

immaterial. was It

Gerrick Johnson

quarter? in you gross first revenues can the us Toys"R"Us Okay. tell were the And what

Brian Goldner

revenues 'XX. Toys"R"Us sizably, QX 'XX the versus that significantly, down said We've No. QX were obviously

Deborah Thomas

either. they weren't remaining their of there's business. say rest material in some disruption would And forget, the I of don't

So as while is with U.S. piece, businesses the there as uncertainty a also quarter very throughout their happen other to term. we're to long prudent them big going being this and what's the careful to remains

Gerrick Johnson

question An you. accounting for Okay.

sales liquidation, anymore? revenue be supported prior isn't into do you you allowances since goes reverse -- those that booked to inventory you So or that going Toys"R"Us when by do the were against reserve

Deborah Thomas

on is if what of quarter. the Depending the it allowance promotional Because actually recall, that some is. you items for within happened

we would collect record and have we is the what for of So we we the reserve net, balance wouldn't net felt what revenues day. our at that we end

Gerrick Johnson

what basis? million bad then $XX And on the Okay. that debt, after-tax a was pretax

Deborah Thomas

$XX.X impact or was It million -- was basis on pretax pretax a basis. a about total, $XX on In million. $XX million the

Gerrick Johnson

what on just Toys"R"Us and bad the on impact was debt, from after-tax the just debt? pretax to was wait, bad be clear, just Toys"R"Us So what the

Deborah Thomas

said bad was that just on bad On just believe the debt. debt, I I $XX.X it million the

Gerrick Johnson

or Is pre post-tax? that

Deborah Thomas

That's pretax.

Gerrick Johnson

their some because liquidation much you said not liquidation. cut that that shipping on you How stopped to you want Okay. My question retailers wanting orders? against to from last to is, is back not against items of also and Toys"R"Us did decision compete compete

Brian Goldner

No. It really that. related goods We've wasn't flowing to throughout. been

QX. are no, growing partners in very have average. that have But and for on lower-revenue the our so this gearing us. quarter It's QX timing there. historically for demand other. year, about retail versus and some are the initiatives with on could certain things. in strong We one quarters very was QX are is It POS, a new just and QX And the interested really retailers occurred our Obviously, decision up

Toys"R"Us to number any for to us expand add with their new enable them that Just initiatives plans up ways. them to should pick time and of takes continue business to the in

Operator

with from question the MKM Handler line Partners. next Eric comes The of

Eric Handler

Deb, the gross that for seems margin. the the Entertainment you. big Licensing -- down helped in or in growth XX%, like if you one was seems It question a a gross dig margin? into Games that business could for What margin. takes gaming little headwind in with the Wondered on like puts and business the drive down really and it's bit your more the gross

Deborah Thomas

Brian in it talked exciting Stretch and Entertainment very with Well, about is And Armstrong. mentioned Netflix Licensing. we earlier relationship our when

was performing see new continues And a And first Entertainment business. from So quarter coming TRANSFORMERS: we the EARTH quite digital is on within Licensing. well. in that side, that revenue in well. business a our do of initiative the WARS rest the and bit digital to mix

licensing have not was Products better and things one a Stretch I well so as would But the protect very about and of really our getting Armstrong, flowed standpoint reasonable Consumer as mix business well. going our a in standpoint it in impacts on that to overboard pricing from some really, allowances. having that margins a I'll margin, on Licensing, from excited addition As point normally gross and Entertainment again. business of from And into get and we to mix the hedges function just out the

to that instill it's hit the discipline business try margin to our really in goal. gross that So we

Operator

Davidson. from next D.A. Bolton-Weiser Linda with the Our of is question line

Linda Bolton-Weiser

the sales, go will if there your And what of that? first XX% some was kind Do XXXX, like, actually way, brick-and-mortar industry toy Is modeling, in because any would percent I've sales term. help have be sales? having give -- would quarters, XX% in item, for quarter there's over actually to you any X% secondly, talk it XX% was on heard impulse-purchase views half be Toys"R"Us been curtail some away. or of of XX% That of you then Can your just to demand demand in 'XX? Toys"R"Us that the sales fewer with the estimates the of helpful. in long locations And XX% of it's would to an first even

Brian Goldner

That's delights every to of in participate levels point. kinds Yes. the with produce at interactivity different demand of have different not retail sophistication a a toy expanded toy them. different game We our kinds able enthralls We've our be we've at to seen what child Linda, that products every with that different footprint. them points can of brands and and or industry. price so obviously really, in for want We retailers price

that kind retail of are us seen channels. enable expanding an of right to net building kind over around and the the this great or telling building footprint. these new We're our we're be X States in go kind will of the again, products. product course destination. partners. closures new doors is either XX,XXX what us new patterns. that of right products, And the away United all all just have years, believe in described we built We stories team we business last So play mentioned than for natural the don't any we're I've We we're because those build to there that innovative will retail more

buy So We the adds basis. increasingly on to so basket, we people an which store, come retail pickup see people increasing do into online. in this see

going number product, new up to get buying picking online ways from and product, in can You're picking that to today online up of to consumers see up reserving pick a stores.

minds, in is any building no And that think to the across we're be grow environment. there ways to purchase. seen so we and model that move in there, number I there there's buying evidence -- is of no continue to and capability gap the again, the people in consumer allows will shopping available our the this this We've it the And converged believe reason even to disruption. what's year-to-date, industry retail And in should with grow.

Operator

floor turn back this At the to time, closing for I Debbie you. will Thank comments. Hancock

Debbie Hancock

Thank call today. available you, Rob, you, The for hours. and two on thank website our joining in everyone, will the replay approximately be

prepared you. Thank this on remarks our posted following management's will call. be website Additionally,

Operator

conference. today's concludes This

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