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Hasbro (HAS)

Participants
Debbie Hancock SVP, IR
Brian Goldner Chairman & CEO
Deborah Thomas EVP & CFO
Stephanie Wissink Jefferies
Arpine Kocharian UBS Investment Bank
Andrew Crum Stifel, Nicolaus & Company
Felicia Hendrix Barclays Bank
Michael Ng Goldman Sachs Group
Timothy Conder Wells Fargo Securities
Eric Handler MKM Partners
Raymond Stochel Consumer Edge Research
Linda Bolton-Weiser D.A. Davidson & Co.
Gerrick Johnson BMO Capital Markets
Call transcript
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Operator

Good morning, and welcome to the Hasbro First Quarter 2019 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. President Relations. Vice Senior Hancock, of Investor Debbie Please go ahead.

Debbie Hancock

everyone. you, and morning, good Thank

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

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

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

quarter, several realigned the and Entertainment, and of the Licensing, and began first revenue with The the Magic: other Digital and including segment. segments we Gathering our reporting associated our Arena games Coast Wizards gaming digital renamed During the brand,

a were The As and reclassification operating and the segment. first of Licensing, $XX.X XXXX XXXX, year be U.S. million $X.X gaming of profit of Entertainment, quarter digital is from Canada million expected segment revenues the Digital and $XX to for revenue to approximately full reclassified result, the million.

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

Brian Goldner

Debbie. and a thank the increased a morning, to global joining year. for delivered quarter X%. X% impact good Hasbro grew The everyone, negative Good Thank team start and of you, Revenues you million us $XX.X foreign exchange and absent today.

last New quarter. with initiatives innovation comparisons year's and tough overcame first

in in as The Our opportunities Magic: well provided from meaningful digital as Gathering Gathering long-term growth a Magic: contribution growth our and e-sports Arena revenues. The investments tabletop initiative,

several TRANSFORMERS, other Franchise and PLAY-DOH, Additional including gains brands Brands, from MONOPOLY. came

commercial impact to are see the foreign in grew We X%, revenues and improvement In of absent our beginning U.S. the markets, Europe. exchange. notably in Europe,

as is year, will with For the last the comparisons year of of year. expect late as line XX U.S. as the Toys and profit week challenged remain the improvement region in revenue well the we Point-of-sale Us first for first liquidation the continue in in to during quarter moved the quarter into plan. this through full stabilization half "R" first

the into quarter expectations. later was shifting approximately for Toys in year Easter from quarter quarter. and first Us, second our the with point-of-sale global addition, XX% In line this down Absent the "R" was

benefit expenses, cost of profit delivered to as levels, quarter in RANGERS for of did initiatives Hasbro's well NERF and good share. Hasbro's good of Endgame, as markets in and the operating began Retail see new launches positive We certain shopping Marvel began and posting excellent U.S. Fortnite savings America. are the came EPS our initiatives POWER retailers entertainment as line several for Throughout the increasing the and Easter launch an North Easter-to-Easter comparisons team quarter, quality managing in the consumers including and April, shelf, global in and improved $X.XX job As initiatives. per brands in we and on Easter line new point-of-sale prepared including Avengers: inventories

ahead of year the remain full year on track for of most us, While to we is growth deliver XXXX. profitable the

and key launch anchored later margin brand Our growth around in of execution year. which in many opportunities innovation initiatives, higher in outlook is the

the on We double hours are new increased gaming at the and in Spark pre-order The X Gathering Beta The were digital drive in is unveiled trailer, at drove during over prize per million with the even the with Arena million see hours viewer Engagement Open Gathering million is In-store latest to games at grew The Arena date Magic: $X played for the in the X.X John, an of and a week XX off of players. and marketing brand support the as event, player Gathering game. analog available premier out growing great higher year War We'll This tabletop. with pool. and Gathering experiences. progresses. lead Spark, week. leveraging with paid set, PAX kicked gaming expertise to digits the both with PAX success of shattering and tournaments East War the is to further team East performing average our currently Twitch hand and XXX supporting on Magic: for March. additional be the well game Magic: Magic player was portfolio May, launches I spending record. and generated views The tremendous at million Invitational in growth which and In our Magic: stores, early unique Deb over digital rate this card The in Mythic previous

building off the innovation Edition, Thrones and to launched off gaming are which an its Magic: new globally The team Game MONOPOLY out the Edition through performing for designed Reach, mobile. good to success and The Cheaters also audience during U.S, start final deliver HBO additions. game hit we're entirely recently face-to-face Valor’s launched on at our MONOPOLY to a this well. game, MONOPOLY: show enters into first in continued record is test based insight-driven reach markets discussed is off As Fair, Gathering millennials the franchise is season. growth for the of In and rolling our a and coming year its as Toy MONOPOLY broader a on-trend we quarter. Fortnite expanding portfolio,

In compelling within campaigns. popularity exclusively NERF addition position out all for start one-stop NERF year, gaming innovative backed late and the launched incredibly rolled of gaming unparalleled with then very on line to building Overwatch further world. deliver at preorders digital-first of strategic Global the engage marketing us consumers. consumers with target industry-leading and we're CMO Fortnite off media a consumer development with Jamie and dynamic reputation first Frascotti, Consumer from Chief added the content, build first John global with the approach, joined establish to or Experience directly global with newly-created directive oversee we Hasbro's product Gutfreund Jamie and destination our initiatives, position deep of organization. the helped firm's global and for during new on to gamer retail. around the across We includes series. our it our in our CXO. to This the strong quarter growing role in the new between a NERF Officer last is a formats joins line NERF digital-first team further HasbroPulse and Fortnite marketing commerce served initiatives portfolio, quarter retailers. social and Hasbro's to engagement, Thompson To week launched This our fans. as leveraging Wunderman HasbroPulse and the is will digital has price Reporting to spring. COO, Jamie points by the Throughout Nerf a this to as gamer February across brands where President connections she appointment our

for strong in according the Wars and we recent to the leveraged toy has programs The example we with to channels live-action Edge first Our on Star premiering The Black Amazon December Rise on how social exclusive digital-first Skywalker Skywalker the Electronic us new and preorders Helmet. and comes WARS coming kept with of STAR multiple of part Series X-Wing X Force innovation Pilot where Palpatine and Star shelf company Emperor Market Wars October from #X from Star The as will to supporting on Triple animation be Friday. is on Series Share. on series, content for kids game XX, Adventures figure The products XX, investment Wars: in extensively to on theaters November and of of our commerce we Disney+ Black Mandalorian, Luke Canada and Hasbro Celebration our drove storytelling Galaxy deliver U.S. as A platforms,

these in quarter, the Partner entertainment for builds year. was robust While throughout Brands this brands down our revenue

kids and HQ XXXX excited Disney+, July. entertainment highly-anticipated includes to lineup across and later Disney platforms We're Spider-Man: Marvel's key Far WARS, Endgame theatrical YouTube. and addition very Pictures' In MARVEL support this Marvel's Avengers: on in initiatives of STAR XD, about week from Home in upcoming Columbia also like fans the

the based Ralph an PRINCESS, we upcoming DISNEY For on product film. as Internet new retail all look line have from the Breaks as new supporting Aladdin well May the at

expansive November new is continued the within programming along immersive important, new content, BEYBLADE generation kids of Bumblebee, Hasbro's growth. kids of TRANSFORMERS leveraging the core TRANSFORMERS revenue and film. and currently Brand episodic to across X deliver is our building available line Partner to to and Also X preschool Storytelling quarter to brands. addition, driving introducing our will and successfully revenue well another shelf the for Equally fan-oriented fans highly-anticipated October a for for point-of-sale entertainment, growth world. essential it home be the on In in innovation is portfolio, with Frozen the reengaging platforms point-of-sale perform around brand. and

the remainder to be As a of lot of we there's XXXX, to ahead look done. work

are growth engaged profitable on year. our deliver focused teams for and Our plan to this

turn to to the over Deb? like I'd Deb. call Now

Deborah Thomas

good and our year start-up quarter. The negative financial expenses TRANSFORMERS the impact $XX.X Franchise $XX.X investing our signs the $X.X offset the growth long-term while in gaming MONOPOLY operating foreign a year was levels X% with inventory Brian, with year, Wizards is our but the we increased strong and quarter while quality ended was through in as We costs operating Brand and Brands. million partially well PLAY-DOH, of product encouraged profit planned a difficult in a executing the our effect “R” quarter business May. positive at $XX was good International cost by declined dividend $XX.X in impacted at declines Magic: million The Emerging reported invest Last million. in position well RANGERS opening growth Canada $XX primarily including for comparison An the higher in growth team in in repurchases. profit a in as the and brands. Hasbro of of in billion operating was year business. in shareholders X% and quarterly against with still the which morning, debt, takes $XXX.X by growth payment of retail. bad associated as exchange. start segments, on Gathering, with The a ability the turned million. quarter cost ended adversely POWER included good for the you, first for and share for cash It's in million in was as category. good revenues last by a of in Thank $XX.X million. to and to segment's next expenses and Coast loss warehouse with the $XX.X managing delivering dividend Hasbro We delivering segment mix, intangible savings the revenues new the year's U.S. Partner X% million to last revenue operating everyone. to we're This in Toys to of deliver Adjusted year. Segment and amortization early including in our Within million U.S. and net behind our the returning quarter XXXX growth associated Brands Us, the increase Gaming segment profit with

Brand beneficial in revenues revenues revenues associated offset operating The segment loss $XX.X FX, declined Brand segment were with partially $XX.X by $XX.X but International Hasbro the per operating Brand an were Us. loss higher as in X% for million exchange. million Latin benefit last rates. year, increased. foreign The The the Excluding and was smaller higher driven Europe, This sales in savings, expense cost “R” which lower adjusted operating a increased year's quarter reported quarter. flat amortization. million revenues excluding included the of and of America last Toys and Gaming Emerging share loss cost million. translation first intangible by was volumes, increased Partner loss royalties compared $XX.X operating reported, to was of Franchise Asia-Pacific. up and

Finally, segment The favorable reclassified related our year. million Several as X.X% and expense revenues were for in and and this, Debbie categories lower from contribution by television. million Canada of partially was Entertainment operating $XX.X as investments improved higher mentioned driven film driven was digital business $X.X XX.X% and licensing. in profit consumer the We offset or of to a lower as operating good XX% profit to including from U.S. the XXXX. earlier, and activities, our of Entertainment, we gaming Gathering for higher stock Operating and by line or $XX.X essentially continued revenues cost-saving Overall, have last revenues This initiatives Licensing with and compensation Magic: of management. reflecting product Gathering. million The Hasbro grew segment to revenue, Licensing amortization as renamed expense our revenue segment the This Reflecting increased Arena this profit by quarter. revenues well $XX from Magic: million Digital. in

X.X% revenues royalty expense versus X.X% year. However, declined to of last

in As launch amortization reflects increased associated Program with revenues “R” expense increase digital as year the adjusted expense. as The LITTLE throughout last a was accelerated amortizing to during the last and $XX.X versus the last we Intangible incurred the Advertising movie reflecting decline lower X.X%. declined royalties which rate RANGERS gaming million revenues X.X% year. the of reminder, full we television expense including behind Toys and Brand We included Us POWER Partner of versus to initiatives production this film the amortization XX.X% acquisition. forecasted amortized substantial MY year. year the this expense quarter. year first PONY, in increased quarter in line marketing to and forecasted for e-sports less year, the

bad We range. continue million Toys SG&A. full advertising recorded expect to related “R�� in in debt Last the year, of expense to year we XX% Us $XX.X expense

by reflecting start-up costs SG&A a the of expense, good new from and compensation foreign $XX in Wizards expense, favorable Coast the impact approximately cost warehouse time, our benefit our cost of have declined this and same business. Excluding early management million stock lower we the savings, At exchange. for invested teams U.S.

low a transactions primarily profit, larger interest Turning currency to increased other on to our results for higher income due gain income. slightly and operating foreign

of Our guidance and is range last and of jurisdictions XX%. the tax underlying tax was rate XX.X% full we The quarter earned profits XX.X% a tax our items, where impact rate for the Including XX.X% X.X%. year. the versus of reflects underlying of to reform the rate mix effective year in discrete first quarter's was

events provided over be to today, We past we impact X XXXX. what in the one-time not expect our as that we to do have of years effective tax they on rate. Based recognized were benefits the considerable significant have lower know events discrete as substantially

share was the For per earnings quarter, $X.XX. first

billion dividend Our balance we ended in sheet share in is repurchases. strong, the $X.X million quarter $XX.X We and payments $XX.X with million in returned and cash.

we brands at quarter. in Saban and out of Properties, Easter the from million were $XX.X with XX at agreement, POWER day acquisition The new and the initiatives quarter, inventory impact ago, year essentially in outstanding during X% paid Receivables sales hand both second first inventory markets Hasbro X% RANGERS million our good. decreased paid day absent certain as flat quarter. of quarter will is and the in Retail during exchange. retailers escrow $XX.X and were remains several launching days of the our ahead the up Inventories increased our foreign XX quality and be days, X on last and second in During year. the increased outlined to

year, January the we lease X adopted new standard. of accounting this Finally, effective

lease managing flows consolidated growth driving assets consolidated closing, and our as for operating statement costs. The sheet we recorded and on the or liabilities The with we're XX, did operating start result, quarter. a fantastic March of balance operations our this standard of lease revenue on consolidated did cash of impact XXXX. to the job of adoption statement not an right-of-use As In have year. team the pleased a

market the We coming will the the support year new both remain coming quarters. and course initiatives to on focused entertainment throughout the over brand we as of

call will questions. open now up We the for

Operator

our first Stephanie with Jefferies. question Instructions]. comes [Operator from Wissink And

Stephanie Wissink

we for outlook vested Nice Fair, your start the better would in Is at bit a can coming being a progression, had were of cadence half your how together team bit or the momentum us on when as help you Toys a Brian, bit more the so to the about advantage in quarter you, to start take think of the you then maybe some we what the And business? year. what the If expected, so just about really opportunities? of you for can are A the the the lateral? really should you that was how should muted motivated versus delivered, this we quarterly the areas question think plans, with bit than great. quarter more first that think you talk a about the you be little

Brian Goldner

Spider-Man third Panther our the Avengers of head a in well movie year again Sure. about, later entertainment to week of the We're we and belief and as throughout for getting Europe, our across about throughout supporting brands enter coming year We've we full the you and seen did $XX always begin done our small I quarter. We Arena our by of are and Us Toys growth, "R" We see of as We've we'd a to the number revenues, The and of in year so a that, performed team up also We're Franchise quarter. have seeing during growth what It's well and expect tabletop had we're back that this quarter, beyond. the shift the entertainment the is spoken we'll going in already last new Having as Brands well we'll first of year, as had profitable think incredibly seen the as so to would said as bit in Easter bodes seeing. encourage in of year, players dimensions. Partner we course, a more both progress a number year that quarter the encouraged also Brands, both over-the-counter about signs and movie, we quarter, a the second first progresses but for has saw into early being good second revenue shipments than that of in a seeing This to some initiatives really the million that very quarter. for us. the players, Gathering quarter growing performing for in-store the number year. Emerging good have in Magic: new last quarter. and headwinds and Gaming early the to more well new we're the brands Brands year expected, we accelerate well acceleration and see the Black again to in very the brand in and job

we POS of down see Easter-to-Easter we we years digits, digits. acceleration look did to and was POS. at that POS mid-single is overall As in the through seeing we're the an year-to-date low-single POS in and POS both up take date, so

hold starting the in is quarter. take the again second really progress so, to And

described business of cadence is the as in earlier our it the think we we So, year.

we very off we're growth, very to very team world. around a good and has committed returning done a job the to profitable to think start. good are The We

Stephanie Wissink

throw I Deb, one could in more.

twitch are $XX can us you just quarters, the by of for willing models on reclassification, Just revenue to that million the lines? our we so give

Deborah Thomas

we revenue on now, quarter, first and we'll the But $XX in that disclose be available, the the as the first difference would the as first quarter because we about and talked in reclassified, cyclical think quarter. business in it it -- it's made to right I not it's a low it. perspective, working $XX is now, business, as when million but it was just perhaps a it's and just it and year, quarter, right put not had million have for team which about the rest is we our of it obviously, full the bigger

Operator

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

Arpine Kocharian

licensing Licensing kind how and maybe kind was down Would Entertainment be what through able Product lumpy can run of we Consumer strong. and of about quite cadence? So and to take revenue break stream how contribution should quick for was think to quarter this a be a the you revenue quarter-to-quarter chance

Brian Goldner

progress we that certain coming of into important and we normally paid television the Consumer that be intend in go off see to Wizards come Consumer some the the arena. can lumpiness continue grow. of talked cadence Bumblebee quarters income as that of after certain about just delineation we quarter get Coast comes around Products be as initiatives licensing, last did will to few streaming time expect The of about revenues rest brands new Products see not follows before count episodes execute We've in digital for initiatives areas as collect the number streaming good and the typically. as over we that's brands deliver film this the in the we by and other the royalties a entertainment company revenues obviously we as quarter. great would royalty brands. then, had And We've that and entertainment. forward, would notably over talked We've we company. entertainment and And in The income

course, in a new talked separately other and the and of mobile time that was out of revenues Arena Consumer quarter first going the a Reach, first that we're that's to Products, the to we of expect ELB. break game about by Coast reporting continue in have Valor's from see market games revenues suffice gaming We're but we each test to more not Wizards and area casual it say up in digital area. to We and game, the

Arpine Kocharian

which of have the QX Magic: you've before end timing said the out any I in or is by sort that? The beta mode, updates of Gathering the first QX, update And terms of there potentially that? do I then in half, you of transitioning today to think Great. end means, guess, of on of any

Brian Goldner

in thus We update the and to the perform real and happy the how and enjoying storytelling us Invitational as PAX Arena fans comes tournament, this at think do incredibly well players Arena. Spark were see both cards they've And also the It of was and see is as as far. the in really our so we well see the storytelling palpable. new response no There's very is the more great momentum the the in to Mythic year around No. engage synchronized lineup helping East that to War QX I the in as on between the to well platforms X tabletop game. game as

so, around years and both Magic: really forward come and quarters tabletop. come to Gathering, I’m looking to to The Arena And

Arpine Kocharian

And one quick clarification, then Brian.

You that POS. low-single-digit Us? excluding in Us mentioned Was increase Toys or Toys "R" "R" including

Brian Goldner

Us. "R" Toys Excluding

Operator

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

Andrew Crum

in you're year. improvement including performance seem for reflected markets see sales indicated quarter be in first commentary the your your to some in usually you commercial and Brian, that's doesn't suggested for starting Europe but to the So results,

further. So maybe the quarter? Europe And profitable you could during was discuss that

Brian Goldner

the as performance X% continue in did way. an know markets months, a The a thus also quite the it to I progress good. sizably. first there talk fact X% will of reengaging Spain, it's in and and quarter, about down Okay. Europe were year the more and is grow the seen above data, seen Germany the and seeing We've is FX first stabilization is Europe year is that according in have a reported. Obviously, quarter of improvement the down to and as seen of markets NPD, number a in we've the down consumers lot we far, has like impact Also new is with limited reason profit throughout France, Russia perform substantial only but quarter. initiatives ago, couple but revenues even in we're U.K.

in We've of we the retail new feel want as We're growing clearly of the progress days, a But that We're in the seen is markets. again retail great kind and to and as those U.K. engaging and world make and doing and we as capabilities in we're which job team European the progress in making a mass-market we around we retailers, we're onboarding seeing So with fantastic. well partners array footprint footprint, progress across growth team's progress retail business. of new see great channels continue a The the it's our early that expected seeing to seeing some across great continue job. is expand and to new growth the online. doing to

Andrew Crum

just guidance the quick Okay. well share Got pacing one expect it. quarter be And XXXX? $XX other in change then any Deb. to there one, year. ahead seems terms your in during of million the of repurchases Is of for you what repurchase to

Deborah Thomas

guidance market you They no period know, so to repurchase our within during much, the to and for year. hit million, subject full first again just condition. -- within grid. repurchase up And put stay just grid that a $XXX in million to amount we we change the obviously, expect that between but still We We too. $XXX Yes. place just the

Operator

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

Felicia Hendrix

products wanting at wanted asked was answer, I what I biggest between is various the your lot it quarter that your reiterated. budget the it you'd different be enter the down was you reasons at strength basically that domestically. and delta Steph's question just of just you but to the the biggest in to And were beginning. return the highlighted the was the better drivers Fair what or us are because pretty for But Was think understand surprise Toy was quarter actual? to clear you a Brian, to in in what Europe

you can help that? Just us understand

Brian Goldner

sure. Yes,

course, well contributor spending of been growth very And certainly The MONOPOLY seen at in our was e-sports continues we're strong the to PLAY-DOH a growth a early and kids. And and quarter. momentum engaging really we and Brands substantially good have a brand, our to reengagement that's grew good for in and perform we then, home expected also fans marketing seen quite Magic great had strong really additional is a has and year. we've doing days While and the as in and to the start. entertainment quarter, Overall, to the level. TRANSFORMERS saw we've in Magic advertising, later of off around and there. well Franchise seeing Arena progress high yes, come

those some brands great that's We've games go growing that and type there and brands pleased And drivers that has But it's more good we and as So with of growth drivers. beta. launch Europe some team still of one that revenues has underneath are brands our those yet, growth think the other engagement from we're and just get early those some was expectation those initiatives key been key might what with Franchise the around game seen open the across and of the then the broader also I key think more portfolio. come of are clearly Brands. are once progress progress, there. of accomplished And of great the days. I very made in and we

our and expectation profitable be so certain our for And of to ahead growth, the brands expectations. year are continues

Deborah Thomas

an the had from We management on slight savings also cost is earlier the quarter are can focused team. by a have we good expense and all just saw that impact. differences small some very than the They quarter expected benefit and fact first

we a year line think Toy that with still a when Brian you're overall they It's as on And at to year. in in a from can make a just still basis, to expenses, profit. having even full focused those full small some we of Fair is out. the a that our of loss shifted things, the difference gave mentioned, quarter go Some guidance on

Brian Goldner

Yes, of Toys progress team making is against to and Us. the loss good is see the it the “R”

Deborah Thomas

Right.

Felicia Hendrix

And was then to -- get things in had listed that the listed, one But to yes, of I a second. the you out? if size that that for all surprise to that the like want just biggest you Magic, it is just or just many you it

Brian Goldner

really tabletop? had a performance we've level, in-store that box in box to And to of to story-led in-store see and -- really is has the like new of has Brands Spark that's the it's Look, growth Arena the of the to office, new the and kinds been in card of the heartening them multiple come great me within to some they're learn releases are players. it's global hold. see the great at TRANSFORMERS, entertainment game. such giving fore, team very to to what putting addition think engagement would The War see of an is easier Franchise I think releases a to the see business with to engaging that to perform with Magic. start great And the across of on-ramp taken happen and what's out one our creating as year Yes. to conversations office And performing. China growth strong home dimensions the high the in players addition I

approach content brand. social to that growth taken our well really have audience fan-oriented A all that's and some innovation and that from PLAY-DOH there. driving new as in online, core additional in the engagement as hold new entertainment, We kids, includes the content

And little the speak. innovations. so to to with the the earth wheel to throughout see to going closer very new to off so And Our good to a is brand. PLAY-DOH play start, year, down ways you're a segment new get

to creating in So the it's team the great see is early momentum the year.

Felicia Hendrix

-- then just getting talking landscape. And the helpful. to retail really That's

like alternative The if will, of out retail well seeing shelf channel, obviously, kind the toys Walmart period Target and holiday of and still their Target you Walmart we're, we're of shrunk and but -- kind in space for with have So a toys. the and in that where you're about nonholiday the the kind making difference of spread times to of us just the their you “R” stores Us talk of the most gone, in toys Toys up normalized to can year? more getting

Brian Goldner

Sure. up then growth hold. also you Target there first, like digits Well quarter. Us. because ownership new growth “R” Toys U.K. that our In Us, others. saw yet in the to we're taken and market good where the we're toy Walmart that loss QX, down revenues. what's the U.S., Us across it's in share. regions, also but in world Europe Amazon there. we're the the And posting growth. “R” Australia, of “R” but other the specialty certain if exclude club, department still growth was In still pure-play we're Both Toys we And the in up that drug, to not continued of And had longer and talked seeing toy up, and revenue no Smyths high that recapture according in few single momentum. we e-com is or They Pacific are NPD in the about quarter. increased I to and seeing business were be sales we in markets in continues the industry, a if but couple around of we're stores seeing “R” also whether there so, also interesting around convenience specialty Toys grocery, are progress momentum to Toys And Us Toys in fan like online markets seeing the making are there areas see channels mean are was

And talked last so I recapture versus said through year. the we recapture. the seen We'd we'd holiday share shifts think, of share period share more about objective

our around Now recapture the intended our we'd lot for that into we're of well merchandising products to as to and see a our We're Brands gaming year. Franchise that share seeing as Partner starting coming Brands create.

see. as areas, with And so it's from to but really forward more footage and linear great great go core we nontraditional certainly retailers partnerships

Operator

from the question is Ng Sachs. next Michael with Goldman of The line

Michael Ng

TRANSFORMERS the one on is first My strength. just

having XXXX now. You a Do get guys think we you growth the growth had overall despite brand not X TRANSFORMERS of movie this year? have consecutive in in quarters could

Brian Goldner

of different created demand know new the that and lots has around brand team ways. You in

media on companies models coming Netflix people forward, initiative have new Going breaking whole we'll and that like entertainment new content partnership we The really do the us. step TRANSFORMERS one I'm to going we're And benefiting not but our to approaching is another, forward. comment really year brand think that have, way on where with a -- I of ground like enabled versus we're next have streams year.

is This economy is product taking we've exclusive that really HasbroPulse we've strong. quite fan there We and our fan. either really Our seen is our quite initiative engaging where is early fan strong. first-to-market or where offered believe also good results like business do hold,

to biggest behind want it's So PRINCESS to STAR the TRANSFORMERS and for drive in and WARS MARVEL clearly is But and TRANSFORMERS brand. continue TRANSFORMERS, benefiting and one brands and PONY. fan fan-oriented our the even business of company, we MY LITTLE

So work over time. content we of a that brand we're but go as starting on plenty coming forward, movie, next there's the for to

Michael Ng

digital was in And MTG It that a lot just fourth later Is describe year. MTG the of revenue to or then mostly the months digital Arena quarter? exclusively revenue to XXXX classification. comes then seems revenue just the the And products? right Okay. first on gaming imply the non-Arena in in reclass that all it of really X

Deborah Thomas

Yes.

think quite while. I we've a Magic had on for line

a back If see revenue as products within part you coming reclassified most we from rather just I of it, from think segment, XXXX go Arena. than you'll material of the digital the other

Michael Ng

Right. Arena right? in only the was And quarter, fourth then

Deborah Thomas

we quarter, Arena to pick of... started forget but We fourth up beta kind from the went revenue open of don't in bit a into

Brian Goldner

December.

Deborah Thomas

within the then within Yes, quarter fourth started that. charging and

So...

Operator

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

Timothy Conder

small far. time expected, you're that expected? the any and to at given year so areas? color is your just but the this in thing, year this early the line obviously quarter back in reiterated that change get your for to check One XXXX either success And you for wanted it's things way, still a you've -- year getting you and in operating said, time early several if in on as point Thank still earnings that looking but to margins, line be magnified

Brian Goldner

like to a said great Again if we're to that. could good had making momentum It's coming see that right for break XXXX the out felt we continue be XXXX, number the believe We've quarter. things Yes. that first of we progress. us, of and we

I new distribution the many or job of the and capabilities in company the And approach modalities grow we're so to world. this demonstrate new points a “R” and it's Us done wondered then want to team have the manner. new hold asked think people sell retailers would and a absent and see great would if finding whether it Europe profitable in grow grow in going that to Toys well. many And has year how as around and taking to new great of you

things again, a that early like but can right few us. XXXX days, break believe for look XXXX So as we

Timothy Conder

on? has so and there international areas, that the was point year, There's and little trended? Okay. to Europe one that how's And bumps other -- then exception wanted but at you've commented on How looking visit America. just Latin early last this over

Brian Goldner

an absent shifting grown Clearly, there forex. Latin do up. a a growth market. specialty good. Toys Yes. POS have -- It's Us looked of had was America impact better tides obviously that less “R” overall's in we from down a and market toy

exchange. Our in which quarter business, emerging market foreign up include would absent was Brazil, the

a markets progress So and were has some we up making clear, ago. completely very in high seeing a you again know year progress. versus but quarter. we're not a and where other performed level in Mexico is substantial at Brazil the the down

Operator

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

Eric Handler

you. for questions Two

The a could you bit more in little First, if Gathering. Magic: dig wonder on

during down. pretty on sizable It Twitch viewers a has saw since spike East. tournament You in PAX settled during the

the a of of to How in week at sort marketing demand new next we've sort so. your to pack got shape look the elevated? coming do quarters the I release in least you over next keep or up interest game think or couple

Brian Goldner

Arena brand XXX now, that viewer really the we double per about far it's more on First, more open played hours and to XX is Twitch beta. the top been see are the hours On QX, X than games in have spending brand. In heartening Magic did than for e-sports average, million thus the Magic week. people

Top the Mythic about It Invitational #X. in it's fact, was event weekend. during In that X

later engagement, terms and we a year. the Our price this said had of tournament. continue have to $XX launch $X we KPIs year monetization, this would recognize in We retention, pool. across progress board We've does officially game million the million

engaging coming stores It's we're related beyond of have see. for fans days seeing to the engage -- is that new see we year spend But -- money as of the very brand more to early to watchable, to advertising still to trial as to the rest a the going exciting ages. intention as starting all our and online. exciting of well that's majority to to the of build game this fan very and core -- the and So bulk continue gamers the to marketing

Eric Handler

then about could And licensing doing secondly, Okay. probably Specifically like a versus Wondering $XXX we're Avengers, impact wonder revenue toys? bit talk quite over -- could the it how if $X of with and $XXX the the be in early year, that revenue Avengers. then, where I now there for at last you're toy How billion this between revenue correlation plus little of was there movie weekend film. might that of looking how look year million an And opening well as the big global China Bumblebee China, a is particularly and looks China and you box for a office much year? million sales? a might in

Brian Goldner

up looks company was as POS quarter Yes. in China for first the good the and -- and well.

early Avengers, we're For excited. incredibly days. really It's

March If few March year. versus you in Avengers: earlier in this a Infinity begun had later weeks War year, in recall, we merchandising early last

we about So and also X, in business, a preschool. but X days. and have Last on dimension Marvel families. timing, or very focused through X-week weeks we has historically every fans supported strong. fully kids driver early our key been shift from been have across X a We're of

for Mighties a of team strong -- our initiative in very is that area business start. is to new the Mega Our the from off

as is of and you're that year we're that But Marvel business Avengers to big focused a So innovative and the products a preschool preschoolers. is on very with for new right, China part we equation. well have going feel

a later and called will television national combination China. television it based in more so on Magic broadcasters mythology, we're globally. out build time to starting with the year we entertainment that in are the air relationship prime movie For were partnership our We're go after take see to TRANSFORMERS part around of Bumblebee good and CCTV, in continuing Tencent, say, exciting things TRANSFORMERS. with of Nezha. possible of be China. in world something doing that the be again, to It's days on this It's funding the movie. that on in on the it's business. looks years. the beloved relationships Chinese a brands happy Transformers beyond what's number overall very this but And goes They And very CCTV to with episodic to more early of very other entertainment could still of program we're between excited Bumblebee, about a And

Operator

the from is line Next Edge. of question Stochel Ray with Consumer

Raymond Stochel

How this update that Beast product we are so innovation in Morphers on an us NERF performance could how give initial NERF can give point? POWER you didn't of the shipments far? characterize of And on us would you any RANGERS Toy you And also performing? then the that see pipeline and at if Fair at

Brian Goldner

to been production. a helping in series. a a and It's America quality the show and slot. us new a the I'm its our own the with of ways lead market really to the around producing for very in transition some POWER such studio in North launch from The It's done America. Saban out in the and show. subsequent good there. had partner And number team ship by in and Well, time a last job beloved pleased starting the North in that's of We from I great RANGERS new the of credit quarters, very give both the will a seamless, in lot limited. line has It roll very a launch producing QX, is ratings The products world. of Nickelodeon's improved strong this but out. been kids offering ratings team high Sure. leader has

about full months, a but So we're, very this not as RANGERS, obviously, excited we'll only XXXX for year, impact. have POWER for X year

question... second And there. good very So

Raymond Stochel

and Toy give The follow-up give us the pipeline any if on you was update at us on NERF -- you an in that couldn't Fair? on could innovation NERF. then And

Brian Goldner

Sure.

Fortnite. initiative to is then the out the in over excited NERF, see around but strong. it's really been weeks going U.S. the That the now Europe, on very away rolling take world, and On into Sorry. last X

We've price stay think a real for really the are see an coming. say product to by able be to exciting great innovation XXXX tuned, very created all in 'XX, all people at and not it's and about but and innovations for being But and content and to that and point. only quality new this at initiatives has this NERF fans. multiple beyond. that's I talked the life, that's responding So us and high the points and that, of lineup covering around it's point array team and providing Later about of marketing price year, by you'll every game play

Operator

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

Linda Bolton-Weiser

you Just can of you your I headcount cost know initiative? cost much is SG&A side, got quantify of expense the was on year-over-year. how million you've did of said reduction $XX cutting. I just believe Is the part the touch that any there And those Can to any those anyway make an other initiatives Story do the question just you Toy affect on, then just for impact later down as of in as toys your is, or those to then lines? the my doing of categories expect quarter are any in you that second terms of the things And licensee? different demand X soon, product are the for And come? hits you

Deborah Thomas

Sure.

be. our cost we take expense actually savings savings savings, the we a then a one. side. From if it on management thought seeing bit cost and Brian, in with second better okay, It standpoint, So cost can that's you was I'll take little are the the line would where

believe as quarter a $XX million we get out cost is in phasing amount track higher well, And why that we to of year. though. have just shifting the savings, we're still a it's We have XXXX net we of of firmly reminder, said annualized $XX on this would but some as expense to when which we still in, the million savings

timing. that the going, second is and on the full continue phasing kind is that on through will fourth I quarter quarter it savings and phasing see the think the just to by quarter, the start way going way then the first of we'll net

we adjustments year through. as items we've of way including travel some a continue line with on that things some like if -- it's expense there's got that than of items, mention As did in far the some other compensation lower ago, bit the that's all kind there all expense

have to is about in respect talked some we the warehouse year-end. ramping that with offsetting Somewhat we and did up expense at U.S. our that

those the to expect we in levels in gaming making don't rest continue the the of have the kind So of brand. And of investment those year. costs for startup addition our to that, we Coast Wizards

So all the as that brands, gaming that with administrative well. there's an piece goes

We the -- is them Brian, our focused focused and expense track whole savings. on as cost you seeing we very and just credit, to... savings to really on give the we're world, So management everybody I've on are do that. want well, around good cost team remain

Brian Goldner

put nice Mr. has around The line Sure. team together and Toy Story, Potato for particularly a up Mrs. Head.

seen the trailers some that them we've the you'll -- brand. historically cast and they've some characters exciting the and movie far, in know, and As it's you been among the initiatives to and see from thus around key see us around of so

Operator

the Our BMO Johnson from final Gerrick Capital comes question Markets. with today line of

Gerrick Johnson

first to doors. more product retailers So layouts? quarter and Did to or space your original bring compress holiday continue did increased the that head during back more they their

Brian Goldner

have movie. those into Yes, Easter we March performed second the it the initiatives we space gets first at Avengers a We've The Avengers are and well set the had quite as said major recognized of also of end the around in our get space incremental where retailer quarter. they've We isle a increasing an lot at boys' top example quarter second seen retailers we beyond also early this in action saw quarter. for was world. closer the to

first these we there, in we're we as Toys year-to-date, just still Easter-to-Easter And but retail the of new it's also and So some up we're of are seeing against indicative the year. percent the great the half we channels seeing first down headwinds half around go if we recognizing for we Us of we're incremental support “R” of year. year take momentum year channels. up couple the out, about talked said digits where new space We've seen versus this we're mid-single of

Gerrick Johnson

under last Okay. going think you the “R” into retailers we were to knowing second Then year, they ordered last facing these year Us liquidation quarter Toys compare do when competition?

Brian Goldner

of things. I number think a

some followed initiatives liquidation have had the given thought than Avengers the changing seeing at that good we it's we by really there. more in initiatives in NERF quarter Spider-Man. ALIVE point, think year Fortnite ago, I strategy new a new the had coming also year second We're and far or momentum that lineup us it BABY we this whether

it do all to market I So Us. trying the our can had back with this understand Toys year of think absent for year and versus and to in impact storytelling demonstrating on grow we us ago focus to that going “R” innovation the insights

Gerrick Johnson

you from the to as quantify one return investment? Bumblebee, Then attempt it contribution Okay. now, looks can on or profit this perhaps the

Brian Goldner

a performing window. Yes. entertainment is level Overall, Home in the we're higher estimates. home our entertainment at original than

have as shortly We've GX movie. part year. where celebrating later or estimates done income what coming sales the have up strong. we Generation been also we'll some lines be. 'XXs 'XXs retailers a X Deb It's that with come cost across product lines And have reminiscent associated of the our Bumblebee will a to product of or So We'll said, call the as good. the haloed result number the of is brand. as The of quite quite that's been movie a of with this associated the for studio from number

seeing on around as Products Products fact that's games Consumer an So but as up in an partly our Products And business. TRANSFORMERS: it's business impact growing the well you're gaming toys Bumblebee in in impact content quarter. are seeing you're mobile why WARS Consumer business, EARTH picked also in had our and Consumer -- why has

Gerrick Johnson

quarter? Could Okay. to later throw rest been have the obvious second that the the to the going to more follow-up and in for perhaps pulled that quarter anything into there surprise Felicia's I'll on. And I'm downside The save then question. was could one

Brian Goldner

We weren't No. there really -- didn't pull-ins. really no

was quarter, that As the the in dollars kickoff course, in initiatives which very RANGERS is end was we shelf because, first put America. the only that that the was couldn't did, quarter POWER what we shipped fact million in intended product the the second was few and mentioned, for a only it I of the until in North brand of first that quarter on only

Deborah Thomas

And small it was a number...

Brian Goldner

And with was a ... said, that there

Deborah Thomas

back full is earlier year, but remains what did expenses in we think to till again, I'll some later same. go see the shifting of guidance I year I said the

Operator

to I back will closing now Hancock hand the remarks. call Debbie for

Debbie Hancock

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

following Additionally, for release call. management's our prepared on will posted you. second this earnings Tuesday, scheduled is tentatively remarks Thank website July be Hasbro's XX. quarter

Operator

Thank conference. you. This concludes today's

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