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Hasbro (HAS)

Participants
Debbie Hancock Senior Vice President, Investor Relations
Brian Goldner Chairman & Chief Executive Officer
Deborah Thomas Executive Vice President, Chief Financial Officer, & Principal Accounting Officer
Felicia Hendrix Barclays
Arpine Kocharyan UBS
Michael Ng Goldman Sachs
Greg Badishkanian Citi
Tim Conder Wells Fargo
Drew Crum Stifel
Michael Swartz SunTrust
Eric Handler MPM Partners
Ray Stochel Consumer Edge Research
Steph Wissink Jaffray's
Gerrick Johnson BMO Capital Markets
Call transcript
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Operator

Good morning, and welcome to Hasbro Fourth Quarter and Full Year 2018 Earnings Conference Call. All this time, all parties will be in listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] Today's conference is being recorded.

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

Debbie Hancock

Thank you. And good morning, everyone.

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

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

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

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

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

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

Brian Goldner

market capabilities, joining industry-leading rapidly also success In environment. everyone. Informed disruptive to managed the actively through strategic year. our And respond took you, global changing our global do worked today. long-term in Thank year last us very to a but brand-building XXXX, teams teams consumer a than by steps to just insights more Good drive thank you proprietary morning, for and Hasbro’s Debbie.

go-to-market company. XX-month the agile, double our We re-shaped course a pivoted to point entertainment Over online digital-first sale organization the our partner. e-comm digits, of modern grew We our become complete more play impact absent period, re-imagined to of and approach and and of digitally-driven meaningfully diversified a and strategy mix retail Hasbro and re-designed Toys“R”Us. making we a a

U.S. $XX million this according result, to savings $XX efforts, the Edge savings a our our and million number company We to Share, expect game further focused streamlined We $XX identified after We across to was savings business. cutting anticipated and million these teams, As we expected than by costs. the managing and originally and better organizational one risk XXXX the global Hasbro our and Market on greater Amazon now our toy million Canada. $XX year in reducing reinvest of in diversified our gross from sourcing actions. are costs

sharing for line tabletop move a open initiative. and XXXX Magic: The performance launch for revenues the series as is to as poised in global retailers price portfolio. track We We by many including to Chinese major brands, more a our year, television original channels. are initiative share RANGERS, The of to look We end digital positive total Gathering grew our excitement. be lower on adding Fair. to innovation excited Arena. our We of our manufacturing with brand new of how across Toy entertainment and to invested purchased successful XXXX. this beta new with We points looks XX% a at We forward these you new our POWER Gathering for Arena well esports Magic: our couldn’t developing and the behind

Hasbro for make investing We and innovating gaming over a greater driver and growth the to long-term. are short

returned our share million repurchase. franchise. shareholders, in quarterly next This of cash $XXX forward dividend successfully feature And event dividend the investor a our years. with announced path increased re-engaged fans to at charting XXth Bumblebee and dividend the to kids our publishing you, $X.XX film excess through this plans and Today, families, our merchandise are Board our about week. across in franchise and more in We blueprint hear the the we represents per XX X% will for Transformers and gaming, share. valuable our we increase You entertainment,

ripple rapid bankruptcy, this underlying While and growth ongoing, XXXX went impact a retailers was a management. industry, magnified including globally headline in retail heightened online the a the by of which and focus and deeper event industry retailer profit of inventory changes major created the the on

unprecedented to six third last in largest Hasbro, the our In its online the headwinds, game initial U.S., largest a dollars Prior to market yet in liquidation of of of retail by and retailers, of from as in and market millions omni-channel large its added our inventory was and the losing into Toys“R”Us, to XXXX dealing dollars in than hundreds and markets. additional as to Europe bankruptcy across For toy of Europe, the year revenue top event. bankruptcy is notably market filing, addition discounts sold Asia-Pacific. the political second declined X% It well retail an customer to an UK. already NPD, their economic hundreds was in and experts, Toys“R”Us and finite millions the impactful estimated. across customer of industry with more at we, European According disintermediation

our the priority at European Toys“R”Us teams. before the discussed of the even bankruptcy, XXXX, retail European we As our top reducing was start for inventory

environment, it operating the significantly this the with and the as retail task. Retailers ended expected down line inventory, XX%. Given year profit top initially approximately our team was to than both executed impact lower negative a bigger dynamic

management, stabilize season. retail this Our new ended were opportunity inventory last XX% In less implementing toy is This and technologies holiday than on the increased anticipate goal year. capitalized year U.S. excluding the sale retailers the year of Point and we is a share this game the XXXX. inventory importantly of mass the Including and approximately on but increased the also to their beyond U.S. They Hasbro focus category, grow U.S., and behaviors continuing. in market loss and Europe years. in the quarter. fourth down Canada, prior retail in Toys“R”Us, for with the Toys“R”Us, Hasbro’s trend year inventories past

THE full portfolio. Franchise declined including XX% delivered to performances. delivered & For Hasbro MONOPOLY in the grew GATHERING DUNGEONS year brands another decline our year, and XX% DRAGONS both revenues $X.X the within quarter. record revenues positive a last Gaming Several fourth year. Brands, MAGIC: billion,

in of D&D play. game analog an for plans behind gaming digital expanded Our universe and taking is shape

Yellies, for collectibles and Rangers licensing gaming Global Toys“R”Us Our the revenue excluding fourth in our contributed Brands, Lost Brands along and of with MONOPOLY, in both periods. the up of Kitties quarter sale year and year, half growth Power the category, in including point Emerging Franchise Brands. lines, to for Emerging second new the was

certain liquidation. Given were performance larger Nerf that innovation one representation at disproportionately is categories due shelf strong a their to brands example its brand its bankruptcy the Toys“R”Us, at and and of impacted retailer. by and space received

share a are product Toy we Partner revenues deliver Nerf safety. Brand’s, Frozen up Fortnite April, From portfolio to performances and theatrical the product and Avengers: innovation, brand in by points, lower in far is principally After Game BEYBLADE We’ll decline the office entering and leader an includes will as are Walt set points Star Hasbro’s cycle standard tremendous with Brand and addition, in Columbia waiting we and to of merchandise Marvel’s for a Within is about beyond. and Marvel NERF contributed our at year. be box we Trolls, new be competitive for great building Nerf merchandisable performance, Overwatch, strong Company reputation Far poised our amazing and Wars, closer another led Partner behind in Marvel Disney In XXXX. that their innovation a well XXXX to will entertainment. share in dates. as strong competition, and standing MARVEL new impressive year. of remains on the price long last Pictures’ March Gamer but Princess, and given Captain and for plans XXXX year, stories accuracy delivered compelling Disney industry to outstanding significant Home some series, Spider-Man: These by Beginning to the across by offset the content launch and price portfolio has declines Nerf End entertainment more performances for or XXXX XXXX each at highly were very industry with increased XXXX, Hasbro’s plans The new Fair nature in continues innovative initiatives and Studios’ diverse July. line which

is Disney’s The Aladdin complete Hasbro opening and the and film service, in live XXXX streaming delivering from action anticipated in be television a both to fashion theatres December of of line X, programs and Coming the the XXXX. franchise the this and live and series release, will dolls, and Disney+; will soon Galaxy’s new slate, Mandalorian, castles, set marketing reaching Frozen a robust fans Star major from new highly Disney Anaheim theatrical executive throughout action across Star producer Favreau be on is is the kids its upcoming May. Episode Marvel playsets, of XXXX debut in Princess Animation’s will both and in XXXX, In to an addition Play-Doh The Disney Wars: with supporting Thanksgiving this the both park Wars games. which including Orlando; all-new impact benefit XXXX. to debuts factor Edge, year, theme land, products film for franchise in entertainment, with innovation small and year. IX engage the The theatres and franchise a Jon Hasbro

entertainment industry-leading drive theatrical adding recapture and Throughout bankruptcy real from worked new Trolls capabilities liquidation. as will all share use time addition, capabilities XXXX, to release team In to in Toys“R”Us our the XXXX. Hasbro new well in the as

liquidation, for term achieve short the of us given recapture XXXX the opportunities the shifts create share driving than didn’t and were did new all beyond. channel impact stores’ in share anticipated that higher and While Toys“R”Us the we in benefit we will we

lowering this retail new groundwork we Importantly, return stabilize inventories enable to year. making having plans to the initiatives, to us tremendous will brand Europe, Hasbro have by growth that laid and while

entertainment, based formats, while expand expense plan consumer is to and our engaging leveraging new a and fueling digital with is across our deliver experiences products, compelling gaming commerce all our create our model. on growth ability brands, marketing multi-faceted Our digital right-sized grow

we well beyond. grow As positioned Hasbro are year this to a and result,

Fair, Deb. over hope Deb? will will into initiatives. Toy brand now to teams you at John We amazing and turn week the call and join our Next to like plans our Deb, dive I us. deeper

Deborah Thomas

Brian you, Thank and morning good everyone.

time since challenges earnings, growing bankruptcy the and global most our year of NPD, for event faced of teams markets and business. to The decreasing revenues declined quarter. Toys“R”Us our in first across XXXX, Hasbro’s the According was years several industry X% the Following XXXX. significant the to for X% the toy GXX impactful the in fourth

lowered retailers addition, of implemented around re-order quarter and In profitability European decreased our going Brian the Europe, world segment inventory reposition levels their This other levels new nearly business impacted was diligently inventory activity year, historical teams In doors closed several business. retail fourth impactful several revenue managing to our approaches and forward. our throughout as to meaningfully Toys“R”Us overall International to versus to, patterns. the as and, their the late the which spoke as

and in Entertainment initiatives including Magic: The investments drove content & in growth higher margin Dragons Dungeons and Gathering, brands, MONOPOLY, Licensing. gaming & Our

to invest and portfolio expand We to across continue our categories. channels

behind taking highest initiatives. steps right are and align our our size We expense base priority to

asset discussed organizational and totaled to related the $XXX which in As million. impairments, charges detailed Toys“R”Us changes, reconciliations to the incurred the release, we certain in and XXXX earlier, bankruptcy, earnings

lost Excluding were We these XX.X%. higher expenses revenues clear will margin the margin. actions charges operating the operating and leverage. profit be begin will primary of of profit our and delivered from to reduced the our operating savings increases in XXXX in but coupled Most inventory beyond, drive with drivers we Lower was costs decline. to

in with billion with cash. is and targets line generation cash in ended we our Our $X.X

growth. in last revenues our retailer liquidation holiday approximately profitable investments in as gaming segment voted in its well impact was drive remains and content innovation increase Toys“R”Us season. and to by segments, as $XXX declined storytelling million the made segment this the efforts in increase loss U.S. acquisition, inventory U.S. and organizational and million The the all digital Investing an we this versus Board chain year, by impacted market quarter. for capabilities, During of year. negatively to year, our more of $XXX.X on the supply quarterly and dividend capital brand the and prior manage our long-term revenues, to the Within talent, important business of the top the shareholders, year, the priority. We capabilities, fourth returned the change XX% and X% Canada our the to X% tightly year

across Our portfolio brand categories revenues declined.

International of Excluding Toys“R”Us, significantly holiday, mass or sale mix during retail inventories XX.X% of of of an profit and $XX.X a categories, revenues $XX four out million Asia Europe XX.X% Adjusted in Brands, revenues including On the a foreign sales exchange. U.S. million for the at year. exchange. foreign Million. to of drove all are America. categories took the was the Canada steps end. full manage Brands. the the Latin revenues close and year and Toys“R”Us the excluding XX% Toys“R”Us-related declined. basis, market flat Gaming portfolio Hasbro revenues higher were increased, segment Emerging inventory segment Europe to XX%, Brand increased of year, versus XX% declined down $X.X for $XXX.X year declined revenues charges, XX% and with including in in as declined Pacific impact represented brand Franchise constant year the three of Emerging declined million the Operating operating currency decline, but but profit, retailers declined point the XXXX. the and segment related Brands, Portfolio across Between and Lower Partner loss remaining decline reported. along in in revenues unfavorable Brand

and several but in toy primary Top-Toy the Nordics of were the the in Ludendo was retailers Toys“R”Us inventory Our decline. bankruptcy and specialty the clear year retail to last most efforts factors impactful, also in closed. France

negative In consumer to challenges to positioning X% continued impact business our years. to and revenues declined goal While exchange. including Latin in of it Europe, future growth return America, million is retailer $XX.X the a in expect in we foreign stabilize XXXX,

Mexico. Excluding led ongoing Point revenue despite increased by year-over-year the the in gains currency sale instability. was flat region economic and impact, the for region of political

Last America, box last revenues the negative million by it at million India. Asia macroeconomic of well was retailer Bumblebee the including most extending Knight flat Toys“R”Us impact. countries, year-over-year to foreign credit Pacific impactful our merchandise. despite After new a inventory was by as $X.X Transformers: Latin as over management. were premiering and exchange hurt a to down the has China movie XXXX’s retailers tough as factors Europe decline earned comparison Revenue The Within office across $XXX to was health in Asian X%, closing month, region and Chinese certain Australia’s led impact office. with around retailers. the continue our decisions increased

it declined resulted this near Toys“R”Us improvement the has the in term. in impacted revenues million also $X in While excluding our segment profit International DSO, has an XX%, in charges. Operating our related of

clear inventory throughout As XXXX, costs was decline profit. to operating in higher case combined the drove lower revenues with the

and to Entertainment in notably revenue our and skill sets taken in and in required year segment Hasbro X% & agreement Europe, the the streaming steps increased better to revenues base, for XXXX our business fixed priorities to and television Hasbro digital lower recognition programming. grow due beyond. changes for a align have cost multi-year to Licensing We with

XXXX, as revenue license segment recognized Our The theatres as Knight across and from recognition the by well Products was agreements full My of are contributed multi-year adoption year Last standard Little ratably were revenues basis difficult comparisons, The in loss new higher term. Toys“R”Us. Consumer a during as year on the the the revenue business to both movie of Transformers: impacted Pony in movie the as negatively now

recognized year. profit XXXX, outlined margin, in resulted more also reported being adjusted in this The versus recognition segment’s fourth XX.X% million. to $XX.X less the was operating in in revenue due segment’s charges, profit we XX.X% As earlier recognized had The quarter the XXXX. impairment excluding new revenue throughout was operating as

for a Studios. well changes Mobile this gaming During the succeed organizational as annual long-term This our for pacing to development releases. future partners games dynamic in and in Backflip in included fourth the the quarter, plan launch and space. of we bringing impairment team market as development, modified including dates is for tests, performed its goodwill

succeed. in plan in-house investments provides capabilities long-term also advertising to Our for right the and

in As Backflip’s impairment we improving impaired margin and changes concluded of our plan, focused of a million costs $XX.X the pre-tax recorded goodwill result the XXXX on to quarter. managing profit charge associated was we team long-term year-over-year. a the beyond. fourth operating non-cash and Hasbro in very margin declined Overall, is and The

annualized last gross of part efforts, this year We $XX reinvest million pre-tax million by delivering on to to As to relevant and $XX XXXX. costs sets these anticipate $XX.X in board of $XX plan savings incurred talent. we to million skill and bring severance $XX year

on resulted obsolescence of in to XX.X% on XXX-basis of Moving the to XXXX. and costs, year cost end gains MAGIC: from reported to X.X% segment, higher in basis, higher close offset revenues spending sales levels on margin invested reserves increased revenues of & the from development. FX hedges. as The XX% We and sales, out partially an THE in GATHERING Entertainment increase point including of impact. revenues, product Growth higher on lower Licensing innovation, this

lower delivery you television with investment increased future We but investments are when initiatives to amortization Little forward years also Magic: My The amortization as XXXX capitalization X% at years a Pony expensed. our deal and costs the revenues streaming XXXX movie. of of versus of multi-year the Hasbro reflecting they content in were Gathering Arena was these Program production of driven certain of to in the our Toy dollar are several focused looking by amount Fair, out. many The in new sharing for

million discussed related As earlier. the reported items SD&A charges included to of $XXX

This compensation offset U.S. approximate by XXXX. bad in in million warehousing and in SD&A $XX debt costs was declined. higher bonus and higher Stock expense charges, partially these shipping Excluding and Europe. provisions by an decreased the

results profit. last Turning versus income, to million operating Other million year. our below was $XX.X $XX.X net

change, contributed due liability primary factors the three In due the a to as XXXX to the a we value change in follows. million many tax long-term While to gain drivers realized a were $XX.X reform. of U.S.

we in pension our addition, million foreign beginning accounting Also, recognized in now is line for In losses XXXX. plans $X.X $X.X had million. of totaled gain changes in due a XXXX, frozen million to expense XXXX and versus standard currency this in $XX.X

XX.X% was change was impact U.S. rate its Our mainly in to underlying Company significant by European a lower offset tax earned year. changes The profits, mix XX.X% last tax the where tax the versus reform of revenues. code from the of result the

effective historical was rate benefit charges tax tax the reported and audit per $X.XX were This Our standard includes in and reserves, charges, reassessment planning, the the of for year Adjusted of per U.S X.X% earnings impact $XXX stock excluding governing X.X% a reform after-tax items basis, $X.XX. the million absent compensation compared earnings such tax share. settlements. to net charges, of tax Non-GAAP $X.XX the was as of XXXX. On including accounting of share, discrete

days Days the of to down sales XX% inventories the strong. year cash the exchange. were year increase decreased operating of balance impact in increased in today foreign up foreign and X% and excluding flow decreased U.S. increased days. the X% declared excluding at is and Our lower quarterly significantly dividend board The were an Europe, payable and during Receivables XX sheet Hasbro-owned Inventory markets impact end that and began in We year markets, U.S. disruptive of The inventory X% million May. exchange. generated end engaging major $XXX.X very inventory remains growth XX% our XXXX retail we the X good, our in announced a new with around and with closely consumers the the team by aligning led we of retailers, Europe. year, and Japan. our but internationally, including and declined levels directly working plan. with quality several through India Hasbro-operated global in our managed outstanding

while affords are and ability changing long-term, to also rapidly the reflect global upon our solid us We pivoting investing which operating we behaviors take for market. financial have a to near-term actions foundation the a which

forward plans strategic on and Toy innovation you at to years, and more future this tremendous for Investor our with XX and have teams we those sharing of York event. February Friday, look New Our Fair

open We call for will questions. the up now

Operator

your today Our Instructions] from with the question Barclays. [Operator with proceed you. of first is coming Hendrix Thank question. Please Felicia line

Felicia Hendrix

Hi, good morning.

Brian Goldner

morning. Good

Deborah Thomas

Morning.

Felicia Hendrix

Brian indication adjusted ex Hi. it numbers decline to of how if sales kind Toys-R-Us to I'm was be or much of or us attributed Toys-R-Us. the wondering just would Deb, some of possible XX% give

Brian Goldner

wrapped Well, and up seen seen look other We've channels. at results, the we in customers. have look growth growth could way we in the in Toys-R-Us is our other and at business,

big Toys-R-Us indicated big about fact that the we've given about we a these liquidation, But represent bankruptcy return we supported to we've have off. those in sooner and liquidation and or expect we've big growth Toys-R-Us XXXX, brands our versus the what liquidation other are And and doors, brands. away retailers. brands that the therefore the was But more number to experts difference So growth both that. the we over there. but the quarter, brands online, had in expect opened time, impacted what had it's were by purchasing talked that we of fourth were these these of and later being that we growth about brands return in but whether now product the be again, across fourth substantially and other as to talked well successful partner by talked the greater and to value given estimates franchises, people's to about ongoingly quarter as impact And a have would our

brands had and number within a the of year the quarter. in fourth grow also We

Deborah Thomas

the as cleared was, And holiday well but about. you Toys-R-Us rate for the and and was It and the in hadn't. end And tried that to Europe. so have our most of really experts the you the the talked third about and impactful it's by impactful, things been know, I we quarter. our think was think channel, been quarter in and really inventory was really to really that you - would to if through the all know, business, had the remarks, we've fourth them, talking prepared estimated that Felicia, after about it And, the season which we that had year. reasons and convey most Brian It the was us that it's

Felicia Hendrix

terms between the and do just mismatch challenging you you the that's kind that more issue? reality, to was perhaps is like the of of And it know, estimates a versus, think because being just so this consumer-related in just forecast something

Brian Goldner

in an yet period on digits. medium-term you this We percentage as we XXXX market, XXXX, we earnings we finite point. Yeah, XX% revenue you. the back know, was unprecedented the that event, to outlined market in and I of look been record think on track CAGR. margin objectives we've double from operating We delivering that one X% our saw CAGR, Over growth achieved full net profit expansion achieved double-digit emerging growth by an growth grow emerging for

and position outlined. I strong of quarter dissipating innovation, the And from we a and product tailwinds The fall growth, our intensified expect new So XXXX, see that liquidation the the in this Deb entertainment a to XXXX, on-boarding of going 'XX be capabilities Toys-R-Us slate, event to and to we've in inventory XXXX return finite still first our of experienced to organization people, see comes inventory shipped we Europe, very in but from a the the remember. that year, are during XXXX, fall great down in retail as with remind that and and do bankruptcy last in since is experience generate and you to we first things the the we during digital we of and quarter strong. that down, in the that if 'XX. fact Toys-R-Us addressing that headwinds inventory's we're began And

Felicia Hendrix

Toys-R-Us for follow-up think the the kind I call kind you have touches half. is had Thank because of the on that. disruption could - I you first of into said last It continue actually the upon that

are noisy kind the or first from Sounds thing? still type past of first it comp like, a quarter be perspective, first maybe of quarter, going you you of forward but know, to just moving the kind half is a

Brian Goldner

first if US liquidation. Yeah, to because, you so recall, and continue after we in US, quarter, right year longer the Toys-R-Us ship then the Toy last ship Fair in announced no

is the goes bit only country this think that beyond Australia. I little other

about So impact profit have yes, there, and Toys-R-Us our growth, return profit move beyond this liquidation, see and as then plans. we But our they an and you'll of growth probably a bankruptcy about ultimately bit expansion an expect and XXXX's margin in operating there. well in growth the a to year, to operating liquidated a of

Felicia Hendrix

my ex is on said you it Okay. just both Then just POS, up final Toys-R-Us. was

you some it digits? if wondering helpful. Just more could be some color us single single give digits, Just mid magnitude. Was up low might

Brian Goldner

America just Europe Yeah, globally single like Toys-R-Us...was was overall and without was single digits, Latin so was X% down high POS less globally overall digits. POS America up. down than and North was up low

But down and brands our were single single Emerging was franchise low Partner our games digits. business up digits. brands up were mid low digits. mid digits, single global up was down. brands Asia-Pac single were

Felicia Hendrix

the something digits? of high because it was or is transition Europe single being having the and there that else down Right, you're

Brian Goldner

for and we our and the year's working year. hearing we completed is the and plan entertainment-led part going the that to had plan for we eliminating that have wanted is exactly. the the and our And the the we we're also of fact task, the that is ensure goal, transition the And reduced retail great Yeah, inventory, our market, inventory. to conversation as XXXX, after are the and brands our be Nuremberg and on innovations business, forward, growing about shifted plan teams leaving really our

Felicia Hendrix

Perfect. Thank much. you so

Operator

of UBS. Please proceed line with Kocharyan question Arpine from with is your The next the questions.

Arpine Kocharyan

to then case, was was POS double what's retail wanted But including much. Toys-R-Us inventory mentioned, as down as places a And to it quarter ahead be owned going currency, have because a QX I and go right? and, the inventory I were guess POS saw inventory yet Easter up globally Easter some down retail? that would you to digit, look back have You QX, go seems weak at well. shipments Toys-R-Us And and ex over heading Hi. what's then to and heading impact we shift? second, into quick I you like of up also to Thank then you owned from digits double where you very for contributing down Could in that's shift you were but we're into inventory that seasonally inventory be you obviously at situation follow-up. Toys-R-Us just if a constant have was disruption. be Europe down QX. impact like

Brian Goldner

goes theaters. up into performed about up inventories $XX the our first new new back the only so as them was entertainment is into the US Avengers window. nominally a have brand that we product, at led so well are a remember second in million that new other the up incredibly well. fourth of there The it's into coming initiatives quarter. like overall. Marvel, the quarter its and in like in year-on-year, Captain Yeah, going our It And Transformers head and quarter in then of with not initiatives entertainment whether do internationally, home number initiatives year, It and we entertainment both number quarter

we're a momentum. as We there. the that great are for not have new performance hits really where Doh, hold, the Spiderman and initiatives and up brands Play brand like second Both we're seeing taking good around had although in quarter, year, that I theaters. said And seeing

a year, good know, that you and we're I want ourself So positioning I Deb, for to... think

Deborah Thomas

example, that in a significantly And inventories owned of They're up just know, year. a have now. new an to lot the you where geographic are we that year also Europe. US, in the have in standpoint, so, And our early ago... down spoke they're office offices, up have from are a Brian in didn't markets Japan We for and hitting things in the a tad Yeah. we

Brian Goldner

India. in And

Deborah Thomas

India, in as well, really the that. is which of been we've increase year, from coming but the building most

Brian Goldner

Yeah, so we're down…

Arpine Kocharyan

Right…

Brian Goldner

inventory as in retail in our in in We’re Europe retail inventory inventory, the well down as States. and down owned substantially United

in well-positioned high really we're quality think I very So inventory.

Arpine Kocharyan

stabilization to Europe Right, of sort 'XX. this beyond also right. wondering your for and return I'm just mentioning of thank year growth you. No, growth versus about

XX% down nicely down year were that much? that are inventories I Because in so set this Europe in up Wouldn't then? think market. you you inventories to mentioned grow

Brian Goldner

think out Europe our thoughtful overall I Well, businesses, to our want in and the about can business number we're that that ensure and the we We We've longer you in look, changes Amazon top as a can really, as differently really very a XXXX. we in business plan hold. forward are very one is taking making that we as right way team, now, organized going are Toys-R-Us no Europe. stabilize our customer we and Europe. grow hear, operates recognize our customer

We have territories new couple in a under it ownership. of

fantastic toy business. was We which now which the specialist, UK, have Smith's, Austrian, a German, and Switzerland is in the but bought

for top a And they've become to grown us. customer so

business great a and shifting we So overall stabilizing to clear grow accomplishment. all just the we accomplish that be beyond for our environment able it's would dynamics an that we where to Europe a make number year the team we're be and of want to this growing want objectives, in us very sure it

Arpine Kocharyan

outlook excitement remarks Great. a, to franchise? Great. anything strategy Does switching you are The market and the prepared profile Magic gaming, the Magic: terms in There's there that go-to Anything Arena to for I that some Gathering of have then change for very year. I a that in this that the in lot mentioned digital. think initiatives in tell profitability of for could release be would regard redesign you year helpful. just And your gears around and for investor Arena

Brian Goldner

for performing strongly for engagement us Yeah, Magic Arena and stickiness. the measures and is very exceeding

We're open You know, it's in the early beta. still days.

haven't for per X We XXX player is On nearly we week. about quarter The of Twitch. million doubled XX viewership Arena. quarter a during game. played in a playing viewed average, It's fourth had and Magic Magic top now yet e-sports games hours in launched, the the was officially on

and our we also at so measures monetization, of beating estimates. are as they seeing look we are And engagement early

is about they move available formats us but the flexibility time. gives part fantastic it called currently to given Arena PC, the to are a engine team great doing they're Unity other The doing, what over other on is something using job, and a

days. So we're again, in early

We indications strong launch Arena. But haven't for the We'll launched this are even all year. later quite yet.

Deborah Thomas

modified successful that and accounting we Because about impairment. an the week We plans, that we gaming modified more remeasurement, Arena accounting next forward. it. talk the go we be we've created seen, think investor talking way at more standpoint and with next really goodwill mobile at our has moved Friday, frankly were mobile and them to gaming. event Fair mobile Toy created gaming And talking It from it's we of just an our about really the about when were but we'll gaming, changes Backflip the

are acquisition. believe we've on better plan modifications an launch user games So impairment to the The changes from sure standpoint. based and that make the pacing the when those just what It's investing all are goodwill through the we accounting We're good. created seen. to is they advertising successful

Arpine Kocharyan

much. you Thank very

Operator

The Michael next with Ng line with your Please proceed question's the Sachs. of from question. Goldman

Michael Ng

time. margins. have about Thank for two Great. the I questions you

return but First, to and missed would year? if those return nuance, how that will then ahead. growth which next I Go talk is margin Oh, define could And when I to to And expansion? in a second about margins apologies you just a XXXX, you think the sorry. look help as - profitable us growth,

Brian Goldner

go you Mike. ahead, No,

Sorry.

Michael Ng

in It normal you the the about a true? gross of should quarter, that said the Okay. more closeouts Thank levels higher probably higher quarter, it's was those Toys-R-Us issues equal? just And a headwinds in discrete you. And see 'XX margins that if to revenue back more obsolescence. margin is, to included and to Is Europe. else and being that second all snapback are seems if normal we which me XQ question related

Brian Goldner

want this we'll we analyst plan you about expansion year, high at and level XXXX so margin an you on improvement in now. despite in anything know of profitability stabilizing don't improvement revenues. comment to the in Deb, I across my comments business terms And, and wan do forward expect for profitability but our do about else our extensively if go that, talk next of at we to event the I'll company, tell Yeah, a an week Europe

Deborah Thomas

save next Brian's components would we for something have on and Friday. get I will agree Fair. But the week's more Toy next with into detail I to comment,

Operator

line Citi. from Badishkanian with Thank question. you. your next Please Greg proceed the of question The is with

Greg Badishkanian

thanks. Great,

you more than brand? the that the and your of competition partnerships you most the within talk brands the saw, the to Fortnite Nerf, about versus of to exposure Nerf also licensing forward Toys-R-Us. reaccelerate then had the Toys-R-Us some we partnership category going on that discussed be how Just impact Can from impactful like could

Brian Goldner

Yeah.

major our believe but we Nerf and the The right. had the Nerf, the received position aggressively Nerf safety. driving shelf far Nerf on the blaster best we you we'd industry Us seen market. in category, are category liquidation. in much is the So and data into fact larger quality, we in been by X market the our that in the and you performance, term. liquidation. impact a you're We went the also space had and saw of just we Due in million performance during liquidation. that about buy buy also have indicated that a liquidation innovation would And and a know remains quarter at Well, very the from near competitive, before received Nerf Toys-R-Us that leader impact to mentioned the and Toys-R-Us, don't had seen from talked impact third-party we its units that innovation, and gifted, fact when third that we've continued

into And this the are across propriety going not insights a Nerf our a and And insights innovation launch March. but their to R&D. show that new innovations all in Fortnite, we it the which to in year new gamer And because as protectable all entering of we series then and go at with innovations. points feel Nerf using Overwatch price again consumer we in create spring do competitors products. cycle have Fair, with we're We with we're some so start Toy lot of innovation

so and we a that. show to showroom. in can very and exciting to talk And feel 'XX We've strongly very things in to we'll about we beyond. say growth But Nerf the got more return great lineup that and

Greg Badishkanian

XXXX, able do about that differently And of outside entertainment, on Good. so you, Wars, two anything movie you're just Disney year to a to some planning those you're talk being Princess, big for on Star properties?

Brian Goldner

Wars delivering directly also We're experiences have film marketing franchise in did programs The difficult think, what be and going for excited entertainment innovation a kids. to I XXXX. the is first and about this for very well year year. new Disney supported to you you compared be to have Yeah, the to together Solo as We're to LucasFilm put from Last know, with Jedi time. Star year going

is entertainment short of an The form support, comes Adventures, on There's the John seeing Star Disney+. new initiative Galaxy which with experiences We December. their both on theme we Star all-new to and the IX that Favreau the new have channel. across kid-focused in park of theaters opening efforts we'll XXXX. is content series. of major executive produced all And a in XXXX land both which Mandalorian in and It's Orlando. our because film Wars YouTube also year TV by We're a the of And Anaheim Wars with will Galaxy's with debuts the then get is end and reach which Edge, which movie, that in Episode from impact also

innovative year very excited effort. full Princess… product, Lots about the So then good the really year a throughout entertainment. corresponding to And we're of really product

Greg Badishkanian

Would that a be like yeah. -

Brian Goldner

No, no. Go ahead.

Sorry.

Greg Badishkanian

XX/XX on or Wars the Will XX, How XX the like year, it do end it's because split is Star it of you… be a XX? like or XX,

Brian Goldner

well Frozen look, also time that that Star couple significant Remember back on -- Wars seen had XXXX, cycle that we've impact. Well, years very represented and globally, were Wars experienced Toys-R-Us for know in we Star Princes it's all first out so to in both the coming the and entertainment we we're had a at and a of

as So impact there's in major against entertainment from addition XXXX, well. that to being of up the some

that percent absolutely year. believe impact So, will but quite won't come have you in Star know, is we Wars I what and that that an I'd of 'XX, which what business express say yet would 'XX in

Greg Badishkanian

Sure. And Disney sorry, I'm Princess, were to… you going

Brian Goldner

Oh! That's okay.

so up know, which did brand were Princess, filmed was lot the television we in comps. have tough You and a of against, XXXX, so and there Disney entertainment

certainly Princess was the it Toys-R-Us, excited well-supported very for are so initiatives mentioned, We're number year. at this just that of brand. I as a well that As about impacted combination coming

support. a this have May live action in of film is we movie comes, which Aladdin, that that a We will year,

capsule new light. to a product programs have also a exciting Disney We different princesses around, in Princess some that's very see

for then will there X. Wreck-It end year impact stretch I'm a saw about a slumber and in you in get the to the Frozen playing from of our of of November extremely movie, product Ralph Disney. And, the beyond. scene XXXX princesses and off it we excited array being a XXXX, that partners through sure having was full and film, And November, we're there and with a course, of at If great party,

Greg Badishkanian

Thank you.

Operator

is question The of Fargo. the with Please Wells from with next line Tim Conder questions. proceed your

Tim Conder

I'll guys out know, have Thank even you, to you in you XXXX performance in there, as and China, even here that's the everything elephant and just here. morning. given outperformed good in 'XX, room ask guys great you called the execution the earlier, industry. Brian, and over you But going 'XX on question had

on and out Toys-R-Us to has yet initially of then and Europe Can needs. stand As part Is react seems largest didn't you the kind like to that? And problematic in or shift equation? do you what the that more of retailers' there? quarter that relative to to for Europe need have you others kind centers called more been with you expand it the percent of you more industry. distribution with think quickly in to where exposure that on sales, all And the unravel, happened I digital, the the call, of third we started

Brian Goldner

or can liquidation, Transformers and than involved a years, some Nerf with bigger or you've the were outsized on been Toys-R-Us. for Those they There number Monopoly innovations our where or incredibly that that differences. so point, games really that performed had like time, quarter. well-supported brand see Dragons for weren't impact The successful even Little brands brands new Pony about Gathering business, whether by being be rebuilding talk so in we that our see of market over Yeah, that was & brands big like brands had to in where well, fourth the or of period and a Magic: be brands or the quite also Dungeons the brands My you might and you were and others heard first those ongoingly the

customer difference performances. see you saw our Canada, for is also the good business Latin really Asia You changed Toys-R-Us in Toys-R-Us good And when hands pretty of was us Toys-R-Us in where though Toys-R-Us, America, no China the largest even We in in second where changed Asia, and and compare there, or was was there seamlessly. we our ownership flat. business

So with I think that brands. success we have had our a level of

from and I'll you 'XX at earnings X% our we've XXXX reiterate, mentioned at As revenues to and XX% rates grown expanded net margins. growth and operating

So this as event. we an view

week, get reason the in through all into I'll every to place plans detail believe of post a and that kind have more it in believe, walk we Toys-R-Us the and back event. performance also you next to that We

Tim Conder

the just the… then And in distribution Europe, Okay.

Brian Goldner

to not continue just look strategy. We footprint, it's -- channel we but Yeah, distribution it's our and at capabilities always really and

to content-to-commerce, and to inventory focus. digital-first the is strategy the at being focused how gets one bring our a content, in Europe, to that's more also to we've for look footprint our on where into and a mentioned, built on platforms, warehousing. I and So been placed performer today, continue focused capabilities We've moved We've we'd a as our also number short-form and Amazon our market. US, top be online Europe, we'll oriented toward customer on in

Deborah Thomas

the add, this thoughtful. also I'd very about we've throughout we've been year, Tim, talked and And

in economic situation have improved. of as with we've been matter fact countries, our a some extending careful credit, these the of cash and very collections Given

were strong. You our right continuously making in extending flow, been sure the our We've which targets, cash that We're the our on customers. our within we based focused that fact on DSOs. strong credit see to was collections reducing

it the been sure the end at we've credit we doors, collect into making how go new these we thoughtful and very day. who can about to, extend we our So of

the we'll markets. in forward. all well we're to throughout Europe to that we on seen believe some our in continue we've we've year, other and So based and distribution positioned and really this of place, the disruption But that put made, you've changes do that grow, go stabilize efficiencies

Tim Conder

And again, that. management, cash congratulations yeah, on has very the went good, so been that given everything on,

Europe, a to give then for talked for relates it As company Europe profits 'XX, about of grow you the in overall little an grow just stabilizing 'XX, bit update. in profits and -- maybe us

that XX, want in the high does getting and 'XX? benchmark about you we've play talked bump XX however in it, do to the and we back operating to margin. now here change, stand look You'd Where how had low given that have

Brian Goldner

look. Well,

know, in it event, experience people the I think industry worst an the be the we likened have experts unprecedented last asked, you did event and many but, to industry decade. have in

off the strong all XXXX. business the and made. in we lower team's So XXXX industry and issues ended revenues of We we year have the ended a our performance profitability, the the that with the our on took to year where highest albeit with at $X.X we all re-rate billion than changes prior given of

that's continue we profit and across and we our perform number a so here, a for walk we'll dimensions over progression margin operating profitability of But time. great how from to think and conversation you I next of And expand grow rebuild through week. our a

Tim Conder

Sounds Appreciate great. Thanks, Brian. it.

Operator

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

Drew Crum

then for you you I year? China or you Was Any Rangers morning, mentioned have a or that for goal mind I think of Brian, expect the the can it new thanks. global at by in talk there coming think some is the Is can roadmap detail to provide this longer is about Thanks. launch relative guess a the XX% XXXX. it Good Power exposure preamble your separately you on I line global in to there everyone. content staggered? board. term staggered, And be you Okay, in launch XQ business? Is you -- appreciated. product a mentioned

Brian Goldner

new continue Yeah, we'll at continue, on production look places side, we're to to product. going to put

with of has do that to our Some expanding footprint. just

asked face One so of place world. about have we mitigate of the geographies in some production local around to certain is Brazil, tariffs. kinds products with you it do in People is some mitigating trying those tariffs of Some experience of impacts. do in has to the...that helpful

requires kinds making continue of place, We that the make we're to manufacturing. different really we're line innovative how in product right recognize look at and types a all making product sure to

So flexibility safe reliable, we get type our and innovation, which us product. model, really to asset-light pricing, great gives believe great a in great

at China of end already. about the products XXXX about of XX% it's to coming So in fifth out In a take our US, the be next are of US, benchmark the in two-thirds US made is China. from already the and we

us, and team For geographies brands is and and a our just new current new again, to our a in there footprint manufacturing. great expanding bringing the job doing for it's brands progression,

excited. In incredibly terms of Power Rangers, we're

toy We Power later our are The spring called Morphers launch extensive. been that Rangers. for series multiple at new line and retailers very shown have product now will this the It's Beast excited. is around fairs, world

excitement. that up consumer products behind Our are stepping teams really

world QX, really produced our original new between that's that a the and team by team core and Rangers the before, throughout launch albeit in with a It is rest will that's Saban and the same the we're series the the just had excited. connection this Power new of remainder North then original launches teams energy in in And So America year. incredibly tremendous. of produced

translated to even few the the before we of year more and So a a full language, next robust but goes movie we and terms in it territories to then it's XXXX do get years. for plans it a intend territories, rollout. to beyond Obviously are English-speaking because add mix in

in asked potential could Hasbro big the our power we and how the And big feel been really how lot again, and of will the believe past there's where me brand we at of they It brands, we so, reminds had brand. early in And the far days build in of bigger This some this present, had Rangers. opportunity. Power in future? was a looked their lot we make been of at this of history we than ourselves, it and the a like

Drew Crum

distribution Brian, us getting the series? television where can you remind for you're

Brian Goldner

Sure.

the great of new Bob and partnership relationship Nickelodeon, alongside Transformers has of there from also with at would our other a we commitment a where parenthetically, and our and our Robins with leadership and have the produce supportive efforts team, have efforts on with been incredibly and Nickelodeon them. Bakish Paramount, Great we Brian films. We movie

build very great team So and to strongly feel they have work to and together. them about there, brand our a we opportunity this with

Drew Crum

Yeah.

guys. Thanks, Okay.

Operator

questions. next Swartz proceed Our line of your Please the question Michael SunTrust. is with from with

Michael Swartz

good morning, everyone. Hey,

Brian Goldner

Hey, good morning.

Michael Swartz

Just of about a I if in inventory's Was quick, both I quick XX% right, know Toys-R-Us? think clarification, talked had but I this North Europe. America that plus down don't you and Brian. excluding point when

Brian Goldner

No, across way managing down for inventories they for the pattern retailers Toys-R-Us, recapture, that are were And board. that while worked order also yearend could the includes what out but remember, see we that the out were inventories. share is

careful were the XX%. in more were down up in the than were million, So US down Europe the with own XX% retail end year did them. not our and but with $XX we We inventories inventories in working

opened also, of We've of also and everything leave retail. portion of then from remember thousands And a goods. that doors that out, of drug, of we're is food, some that portion new I'll also club, tens substantial Toys-R-Us, retail. other new of there's opening remember something doors sporting that's But retail,

the Hasbro. right and And channels marrying retail product up with right that's channel right bring for a and the products to so the to and the strategy right development margins points price have margins we great

Michael Swartz

think, or about just that Okay. 'XX, I major on even retailers stabilized? That's they tighter kind was thinking some of mass you've that, talks the Or incremental later I up now get one your inventory the in tightening to year adding how their I with about had on do of think they're them helpful. the with of is levels? inventory. challenges you there mean, And in early normalized risk that's guess,

Brian Goldner

as inventory. will time end the our in is way we even going get the of share work new all And stock two Toys-R-Us result stock or flexible we'll in warehouse gain we move in inventory. inventories, on just-in-time at retailers' from a the a other longer we We're within is, able the ensuring to just day that and Midwest inventories with space that year. it in using think was so in market that definitely and warehouse our inventory our the where inventory about to to better always in I being business related in it without necessarily view look, to change no was December, can the at Well, a fully fact exist one

but we'll prepared and so hone perpetual step improve drumbeat go is to And that the change management, a to believe that. to forward, team initiatives in inventory inventory, this, I continue believe for around I a be inventory, going don't inventory. it's just-in-time our absolutely there's just

Michael Swartz

And one the that on little Okay. cost outlined more question clarity a and Great. I then if you for savings I may, guess just 'XX. final 'XX

gross the time. back and you the confused, over getting amounts was I net one can that think I so quickly more go

Deborah Thomas

it and, Sure. this the got plan By put throughout transition place XXXX, be while we know, $XX expect year. to we'll achieve we because million, gross period, cost executing savings you of a in $XX to we've

XXXX you net continue backs the in So we expect we to of to, add that in. items that for the know, to do invest

about If to talked been we Wizards company. way in to Earlier, and bit number remain sure make We've the priority we Coast always make we're long-term. a investments a our business for want one capital set that the that think of continue as about Arena you because because does we our up

in So we is XX so continue net to XXXX. the to make investments, XX

Michael Swartz

Okay, helpful. Thanks, great. Deb. That's

Operator

question is MPM proceed with Eric Handler from with questions. Please line Partners. the next The of your

Eric Handler

are curious opened what better could able any delivered they year, different then of be and that there to that. follow-up in than with last do. new retailers if if I've talk you expected about, found I'm that Thanks, morning. and might and to doors got be you the you've good all over or segments types of after a the question Wonder And

Brian Goldner

product manner -- it in our of it for great kudos comes with I our begins this development that's all teams, to right retail. because really and give back look, Yeah, right product development the to type made team incredible the marketing

on the position retailers to our give them among can fair to on been they recognize them increased demand a feel that to brands our make a to brands. we've for market So exclusivities return and brands able allows that our

to for on fan right store, good gaming probably of collector and gaming going more business it's type the them So are if the and product we're a audience. Nerf to fan that focused their give giving products focused company, on right we and want that's that If sporting array economy. them a it would our

value be And sold to for make so it's really to still are we retain absolute and and really retailer. product those and sure us and also price those the can achieve a for making discount a important, and that then we're partnerships handshakes lower get margin stores have to point and that

time made work pivot ensure that a provide great them. to can with kids You we our with really we sure at the that socioeconomic we brands, level all an want know, I and major that product play for opportunity think every make to a time participate teams over have here and we've where in our

and US hold when same that's new it many been We're ongoing, the strategy seeing in so that's doors, opening of channel in add doors, see but you doors also so process applying Europe. now of to take many Europe. that So thousands you retail thousands a at really

Eric Handler

do like Backflip, that what XX a your seems, what saying top -- to similar what be then interesting how curious, and games need with issues, I'm some top seems successful to what mobile, going just want the been strategy Arts with on It you've you're is has mobile was -- to shapes you And here. do? in Okay. here really question in what Electronic can a mobile. have mobile. it It You you view if

Brian Goldner

DX, is And then market as in we it's the And you the that's one of is important do most the approach time to could first retention. the come The on seen, many years put a important I'll long have course, day not of industry. be to it its it be at a call it most change There you think days really where of evolved put of most most arc the the the kind that's dynamic change ago, because and you I fire-and-forget thing you important where was and the the develop game, important XX today, know of so game, out that on look the XX, day. Yeah, might happening that market. the XX, gone on days important. not quickly, all but you'd first

are on analytics you around need the we markets more composition looking of monetization your the So as and small proportionally which the we in go teams, who people and you means monetization. in at data look off work world, model, at

artists the right creators, to two. but still and have you find between You need great the balance

So several years, that is now of DragonVale enjoying so it's has arc Earth that's out been been War looking a it's of and the and different our -- Or game You occurred where its last games we're been Backflip, years Transformers: big key change now and several over eighth know, as at of change, year that reinvented has success. periods.

really want And games So but the track. able to really but time. right time new that We're and from on immersive to also have an some monetize over we that are that also team focus. focus we more creatively adding some standpoint games do more dedicated games, takes getting it

the and you plan if to to don't reason, know For impact therefore that goodwill. the associated you have I long-term comment. changes, want

Deborah Thomas

work And right. some changes quarter And, you're actions of certain you you with you're know, feel development No, plan well go the setup that, organizational on with we and right. fourth things. are to reflect we're the took you forward. that in know, partners We, some

Eric Handler

Thank you.

Operator

your proceed question. of is question with next line Edge from the Please Research. Ray Consumer with The Stochel

Ray Stochel

follow-up my question one Great. something do And occurring you that franchises? And within franchise thinking business then question. you the especially the all your presence, across plan that. Thanks is about 'XX? How brands need changes quick much collectibles And market? for so you are in a given greater taking after in your into lean to fiscal

Brian Goldner

better we understand proprietary out consumer are of audience. goal And based brands on understanding anyone all our plan to Yeah, look, we time audience the brands. much insights, spend our than the for and so our our way is

come at audience the it this consumer. at to companies are don't with businesses and that, other And the have to side, on in that collectible ways. there be our audience in to only. There follow with want they a and In addition a we lot applaud our and mandate a and to for those in aspects we've where those we're built just really on the the sake. tells So the because the consumer participate brands quick franchise the then of efforts brands, single and -- have on been overarching space, We we was brands and first there collectibles' the or around job really and the us looking that We're may have really quarter, focuses And the based had success, the out we been media saw saw don't fourth And market trend done Lost a create really like scraping successful, a up original. good consumer good strike a trend audience, company we new business in those Yellies, unique media found and social going a we and that objective impact and foremost. the we Kitties product fun innovation social have so and brand. companies using listening that where their initiatives, of and put to and the collectibles other which

Ray Stochel

Great. could comment you you and how how I Thanks. changes about that to Hasbro think impact then could there. And there making beyond? and way Toy on XQ some could Shop? impact, know, XXXX, know that Is then any you're XXXX,

Brian Goldner

Hasbro really is efforts to we've effort moving a of the company It's across the Hasbro we're exciting. Toy Pulse. you our we've economy. be fans, lot we combination to and of seen is had What fan importance We've are of economy with engaging the the a where grow. fan Shop doing over years there about The there spoken

around ComicCon. We have different the strategies world. for are shows obviously used big participant We buy-now see-now, in a

with brands incredibly have that fan that We well track base.

the older Our fan. Transformers huge content put We a the for adult business in that brand for out and fan-orientation. has

about bringing own a to our fans is days. at very And walk excited. more further to several and elements organized hear capabilities this Deb, together so our don't next but but our has early brands, you commerce, obviously content both And across it consumer probably through on direct a on comment It's some brands of of focused you brands. and it. of want to John this investments, is I multitude know, Fair. if will we're week that build partner offering from Toy you'll

Ray Stochel

Thanks Great. again.

Operator

the line proceed question with next Wissink of from Jaffray's. your The Steph is question. Please with

Steph Wissink

All right, just a each of point a I comments. thanks. of Good want finer for on a to finer everyone. it's point, put maybe morning, you, a few question your

this you. Brian, for So, one's

XX%. Europe very include in inventory channel but Toys-R-Us, does seems down clean. That said You

You've mix. rebalanced retail your

for 'XX. pipeline You have a strong really

Why So the why will first grow? word That's "stabilize"? the only use business question. that not

Brian Goldner

you Steph, So, know us.

been we want The make run things so. to get know we we XX working feverishly months You before team's or sure right pace. the at for last

If a liquidation in talked Toys-R-Us. that organization and announcement the you took of fact, we charge, modernize to of prior our were the making, to changes the we we to organization recall, about

yet on it's of So a forever. we were period yet the and time, it does and already not take case,

hearing an announcements grow feel and including is we're that I stabilize people So our we growth that is our with environment in territories, in we are across are balance of what's the Europe, of countries that powerful. this to strong, re-rating company, our of from our where important can reassure factors, therefore all strong, and the rates England sheet Bank week about is sound, others company and our and strategies brands other

to Rather we we So all for making initiatives and of relying people just comfortable have. not in are to something we're occur. that appropriately, confident the conservatively, the that context matter a sure on that feel going it's plan of

Steph Wissink

very then, in one right, and margins for really you, All incremental this helpful. that's on And Deb, is XXXX.

at still look were really XXXX we investing impact was if a sales business. So the but you behind year,

are give and margins we Magic If to from stable, think you for the film the are as the way of year lower. bit levels were some boost opportunity? get investment cost credit So a XXXX the the XXXX and that some In first the you savings incremental sales. a your revenues, probably in appropriate about that margins Is sharply. a it to going would maybe the multi-year XXXX expand quite opportunity imply and

Deborah Thomas

business. know, and on of these investments a of remind bit guidance some paid to and, specific the factors, for more in So some invest I the we'll continue you give you we'll we've

revenues So say we and with future from the a But of ours, performing so have are all year for franchise earlier that a to partial excited for long-term, year comes but around full discussion we could had super brand we that about way the be we Rangers amortization. only that good continue example Power we of a amortization, the acquisition, blueprint. that of we a have think,

but see making earnings, have our some and to that excess our some investing will So of shareholders. keep positive operating our time. remains we we give we profit take the through focused the do we when we we on investments on those and revenue able remain to that expanding through growth, next of earnings profit, after We're week have strategy. leverage cash to return take And things That long-term any very guidance for very our then we'll to we're and but over some offset, focused our that that see operating sure expanding where margin to, that.

Steph Wissink

hearing you you're POS suggest and to comments a if lot games in year kind he's opportunity then to Toys-R-Us went It through. double slate, But John, confident if a the not still and sounds to room. ex with consistently one year, your Is sure or this Brian, respect even set we're your I just seem more that wanted the Thanks, XXXX. make more, in content maybe XXXX, than of level, grow could very be did like business you your your franchise even at coming correctly clean, are through extensively. Brian, inventories your partner positive that this the it of

average you had think a that your So level digits. per a the you remains versus in really there high kind guidance if historic that but for hearing we to correctly growth confidence of growth new of potential baseline XXXX, about the of and your mid growth set we trajectory? is out not staging single on potential multi-year kind se, just a you the -- Are

Brian Goldner

are digit we'll I our Now, call of we kind so we digit we takes, new Because think -- don't there growth can achieved achieved. I'll view XXXX, XXXX a yet markets And over five rely guidance what past the believe example medium the term we we've puts that years, toward next going that kind in first through we through achieve the growth emerging singles forward. is good there believe some our and broadly foremost, low-to-mid plan and you can walk of week. on double in the have and

what area focusing X% will single The the had in fact, we're rate want to and growth get developed us gaming, but and have returns. is the we a on investing, growth see say going is low-to-mid economies. to growth historically, achieved again been In come newer which an digits investment for faster we to we from that and that's

Toys-R-Us, of effect But Magic up acceleration the year have exciting US, that & You launch and was the Toys-R-Us Toys-R-Us, emerging in the recognize of are Dragons. let's without the in the we Arena look the in our to tempering by without Toys-R-Us our POS. and just had business where also two-thirds of where offset greatest very want for Dungeons represented category globally was US US the every business right of days of impact, US, the the at markets, of that, you I early

it say we've record, suffice a our Hasbro. of to we good the So phase but we're next longer achieved, week conversation, growth reaffirm and what for next feel about track going

Steph Wissink

week. see you Thank you. next We'll

Operator

you. Thank

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

Gerrick Johnson

quick. really Last four is. that They're questions,

Brian Goldner

less. I'd expect nothing Gerrick,

Gerrick Johnson

Okay.

one, severance in First more should charges XXXX? expect we

Deborah Thomas

can think XXXX, right thinking look we you never of would through now, I say say right? I never, as to there's significant right Well, But we're nothing now. that

our severance business. charges there always However, in are

Gerrick Johnson

or you expectations contribution Okay, for perform about us to And bottom give that expectations? talk can on your line that? great. anything expense? did can you. Transformers, you And there Thanks. is on Thank How

Brian Goldner

Year Yeah, The early a and indications the we film, $XXX with sure. over US both and home On We Haven't in so done entertainment New profitable go for early globally. we believe families that internationally, days. up It's successfully quarter and the Bumblebee. ESP and the was as entertainment in the including Hasbro fans reengaged is for really million overall. the enter Transformers, up fourth hit Obviously enterprise yet. window are for forward. Bumblebee, the window, the we're home strong in

in opened We and movie haven't even Japan theaters. is the still in yet,

the Cartoon new on fantastic, we preschool addition with important on In feature and partnership team, television they're also working Paramount that an Netflix to Giannopoulos Network, film, are ideas which offering, in have offering. Jim we films and and is element and with

that believe brand really brand the our across franchise. continue very strategy, the So board, power it's a blueprint in strongly embodies and to we of the

Gerrick Johnson

And is planning Power for with consistent the Thank you are on activation? full great. you. what timetable accelerating this Okay, were before? Or you Rangers,

Brian Goldner

what made, giving product with of industry to price points. is experts, line been the and to fairs we product have toy us through improvement but very that the before. line, major now the innovation, see brand. What the we consistent pretty planning response change, shown to the and We've know to It's were all several we've know enthusiastic the to of they're several really didn't

to like kicking showing Rangers. forward exciting Mighties also in like areas the and time, you Marvel line forward brands for Power to what an Looking looking Mega that It's that does but off. and we're

Gerrick Johnson

great a brand. that's Yeah, Okay.

franchise question it in is year, brands XXXX? too growth an is last asking My so maybe brands And to that. forward. to forward you in the in you? Looking early easy Thank down 'XX? franchise about you X% going comp have Do expect start

Brian Goldner

franchise grow Monopoly comment three in were We category point. those Yeah, momentum it's and I underlying forward. go franchise brands we real quarter And, we described clear. in have, fourth did we days, with absolutely guidance impact opportunity our But Doh. didn't that yeah. as brands though with have by in the I Toys-R-Us. The again, fourth early, We've quarter, I Magic Transformers. the were how like wouldn't at that of grow product even early brands the that, saw real supported brand Play XXXX don't franchise a strongly and and feel that on give brands is by because happens. want this you to Remember only

a brands. on we're that good great feel teams I and those on look, innovation So with track great

Gerrick Johnson

you next Brian. I'll you, Thank Right. Thanks. week. see

Brian Goldner

Thanks, week. next Gerrick. you see Yeah,

Deborah Thomas

See you then.

Operator

you. back for floor Thank to I closing now turn will Debbie the Hancock remarks.

Debbie Hancock

will event Thank this at on following be XXth. at prepared joining you, two in you, available Management's today. will and thank you. week, for to remarks approximately next everyone, replay Rob, Thank our the be Toy the you call. forward hours. posted of Fair call seeing our website The website We many on look our Friday investor

Operator

conference. today's concludes This

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