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Hasbro (HAS)

Participants
Debbie Hancock Senior Vice President, Investor Relations
Brian Goldner Chairman and Chief Executive Officer
Deb Thomas Chief Financial Officer
Eric Handler MKM Partners
Steph Wissink Jefferies
Arpine Kocharyan UBS
David Beckel Berenberg Capital Markets
Michael Ng Goldman Sachs
Tami Zakaria JPMorgan
Fred Wightman Wolfe Research
Devin Brisco Bank of America
Gerrick Johnson BMO Capital Markets
Call transcript
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Operator

Good morning and welcome to the Hasbro Fourth Quarter and Full Year 2020 Earnings Conference Call. [Operator Instructions] Today’s conference is being recorded.

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

Debbie Hancock

good and Thank morning you everyone.

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

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

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

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

Brian Goldner

to resilience us the Hasbro excellence. everyone They cannot our the Debbie. amazing year. organization tremendous business for of our you met distinct today. lead I quality breadth leveraged of in with to work global of Good company honor I the and say through you, the of talent enough thank and unique the challenges and that footprint our Thank our with the the about the and portfolio, The everyday. XXXX people team diverse morning, and have joining

all Hasbro and qualified this As demographic. uniquely found home to to joy. need find of ages they themselves connect is for ways meet sought consumers every at

December. the ago. November, tough challenges in despite starting toys, in demand a ended brands, valuable Our in comparison the successful The holiday with demand with very quarter the but as releases fourth and October extended, on was period growth for with key The to cash managing profit XXXX earlier sheet. consumer margin bring programs then and some global accelerated XXXX. expenses consumer supply environment. $X.XX with across December We the in content We finished a Hasbro’s year, adjusted balance unprecedented season has grew for our seeing to games weeks and so and capabilities success strong our theatrical second from our If Hasbro’s they the and the with growth year. operating chain we challenging while Frozen due X% and challenging meet in performance momentum grew enjoyment and in data, strong cash. and billion and quarter fourth into extremely our to are June half Throughout the commercial profit this happiness comparison this we point-of-sale the in retailer was Frozen finished GXX. of quarter, in the After year improved and XXXX The many with advanced revenues exclude operating continued POS January. year

market the the in and markets and fourth point-of-sale on game growth share toy in We during and quarter. top also fastest gained U.S. recorded the the Amazon European

The Magic: revenue, years. Jenga, Operation full an $X.X year like well Franchise delivered Gathering and games their ever. classic to of we Dungeons and had year, gaming X, had as Dragons in billion & and of each did stellar the Monopoly Connect For Brands; name increase many, best few XX%. a

regions, the marketing all and investment in ability been demand behaviors for America. Latin grew supply business has priority to meet result Gaming chain, of as our reflects they but of The commercial and pace. pivot gaming at change a consumers their category Our the Hasbro. teams long

years. this and both growth lead in we plans the for and gaming our and face-to-face brands digital teams clear have Our market coming

and high more global hear To retail and Wizards channels. their gaming XX. investments demand revenues double XX drove and strides increase omni-channel a and of more for the to categories, and the year network this By omni-channel team and at year will $X Coast virtual XX% in revenues. meet billion end, in from President the from year. consumer growth on Chief the of retailers e-comm point we Officer, Pure-play You Chris to to Consumer a February significant percentage Eric e-comm our new than under XX% just This Nyman, in other representing event of Cox, made led and our close our investor last revenue leveraged increase. global translated

leveraging last and closely teams expand also with piece many to unique grew offerings augmented innovative leveraging a are is capabilities, growth the with their tailored added Pulse work fan that experience important authentic revenue with the retailers connections online as fan capabilities Hasbro and it create our We to while the this With DXC collect click of to own is year. fan for continued experiences, year. but we our community. Our small, channel today, revenues unmatched a product, Pulse growing during their channel and with support Hasbro

worked We opportunities successfully production and capabilities year. new these to from the supply consumer the enhance going logistics, forward. disruptions our global Due supplier demand. to tirelessly manufacturing evolving e-comm the were and meet retail to network, to team execute essential but changing had addition added meeting demand capabilities geographic our base to COVID chain we and to identified and In global our behaviors, further

our year, in last increased progress of will profit entertainment that to we resume enhanced returning developing our the eOne for our of team reliance power XXXX We in IP XX% ending brand to XXXX we new TV continued year expansive while to one the deliveries on-boarded we as partners. the Hasbro brand country, deeper approximately brands with revenues expect made substantial production to revenues income for production earnings and were in eOne lead live any and After reducing on storytelling, streams. multiple their quarter, live development engagement, of the capabilities limited much film across production quarter and action and and action support To China. the diversify versus manufacturing, third and broadcast

around world. course on and series films. production With the completed in XXXX, production across the future and of we X Over place, protocols scripted XX unscripted continues television COVID-XX

for eOne’s near-term are into The the to compelling we our expand growth years clear new uncertain, time established expertise a takes our we is and and This now to and the theatrical the combination viewership Hasbro’s opportunities for to While and linear and business path come. return drive deep a have its remains in and but merchandise. brands future see unlocking of in and landscape both opportunity and roadmap a streaming investment, ones. portfolio slate and to launch and robust

business, in of streaming commercial of to achieve citizen. and global XXXX. our in with Hasbro-led imperative was our event to nearly XXXX of for GXX streaming growth our new global being significantly Pony, us support Child lines on the our signature expanding distributed and share in and team category and global North supercategory continuing number all we rollout the overall. vintage I products this future later in how our recently through black in the everything are our launch as To and Hasbro’s partner PJ and reopening these Officer. NPD. categories. the appointed light CSR a and brands. family team organizations Wars, the believe last since Disney+ brand our initiatives, Animatronic release as line to our character Disney+ Purpose also This further and by by eOne several in leading longstanding despite responsible more merchandise. brand track for corporate series licensed stakeholders. significant Star reminded living across Masks year helped and are XX% integrated vehicle without significant the and year, leader across Frozen driver and Disney toy has operating, and reach XXXX our which immersive resurgence adults. line and showcased Marvel a a marketed year fueled Plush drives Child kids of Hasbro without to quarter as will grew employees is of under children grew behind fourth and this sabers the Wars consumer that on our February category the story revenues success America meaningful have culture with Hasbro’s streaming the product from of Europe, The Kathrin brand’s Wars Even legacy year. one and mission year we and brand game as plans and With the My opportunity Hasbro-developed, teams first is lead merchandise is lines our Hasbro the portfolio, globally progress of and as theatrical further markets aspects Belliveau, year. a position pop reinvented a corporate well the is and consumer Plush Star grew this a The portfolio for values fully driven purpose last a re-launching fan a drive this Princess of The executed as the according Hasbro executing XX. our in experiences increasing holiday prior expertise Hasbro Little items, in America item Edition, has To teams The our Peppa pre-school Hasbro’s Hasbro’s are center for and community for XXXX. Our did the via in space Child year leadership fans brand well and the business. All were regions engagement Wars enhanced including Star casual been strongly across supporting to in properties platforms we both it citizen Hasbro by responsibility in we fleet The versus products as on Chief Mandalorian. Pig the drive strength and products later programs every our first including initiatives retailer item like practice, forward, Australia. one business, North strongest retailers growth number This at The Star eOne IP brands, other collection, reemergence At

As to we we look consumers year, to the retailers continue see coming and Hasbro. and to categories turning our

unparalleled and and new grow amazing capabilities will call business. coupled in the as drive the to while over entertainment. We in we leveraging to in products, come XXXX planned drivers, consumer now and and growth will through theatrical, COVID-XX navigating continue have gaming we new Deb? including lines television turn digital brands streaming in of will entertainment, believe and our I market. with We gaming portfolio to Investments entertainment Deb. innovation increases

Deb Thomas

balance sheet, already and X% never strengthening morning year future and on earlier in XXX fourth points A this XXX am period health Thank in proud the profit navigating and of the generation the basis full our revenue for aided profit loan cash ending investing reduced a lost declined as operating cash. on supply and safety million year, amazing for points XXXX revenue retail and part did only of final and long-term On $X.XX good anticipated year manage grew chain solid near-term our the $XXX growth quarter paid managing working prioritizing of result X% generated particularly did I employees you, and capital. profit $XXX flow in operating billion a X%, team in while last everyone. delivering good debt. our cash operating growth. margin The to in profit operating than of focus with to the this work while XXXX, team year. the Brian of and business million of increased We term an XX.X%. margin strong full communities decline Hasbro disruptions. Hasbro basis year, The we work

toward to headed progressing are debt We and our EBITDA. Xx to our down targeted paying and remain debt returning X.Xx to

this XX the Combined and manage already year. in We Throughout payments meet basis retailers million declared a also both and dividend warning, at year quarterly demand dividends and a geographic Days demand Consumer in shutdowns. in commercial markets. Retail inventory global terms. returned days reflecting shorter first to in of and base the year-over-year. worked U.S. to to supporting lower Board rising while quality has $XXX the treasury management on some led businesses DSOs strong as sales and in level end continued inventory of instances, declined teams shift inventory XX drove with XX, notice in improve, down regions payment, increasing others, during XX% the their supply without with were U.S. down those quarterly slightly collections the with the declining and hand-in-hand, customer year. forma to to as positions was XXXX, two for May today’s our changed pro days the by most inventory of good all

strong retailers and live-action during Importantly, Europe. major production like the January this activity in film in to uptick the TV well quarter. With limited, returned demand the meet U.S. third were markets this and positioned

our As expected content low result, year end. below XXXX a slightly cash $XXX full the million, spend was on

has million. across and of up live and on range film is our them action, running, $XXX managed $XXX spend in TV returned be the scripted XXXX to content to and and unscripted million animated production COVID-XX in As to safely planned keep protocols we cash

million us a business savings. to managing and puts at toward and XXXX. well entertainment and in plan of Toy profit acquisition of the and reach business Hasbro teams to While financial both is Fair the contributed the on approximately of shared extend and our we and our changing to of $XXX environment, ones much cost as consumer integration. goal goals This just of our brands the existing new initiatives. the spoke our $XX the way incremental ahead the end develop which million made of revenue of gaming year by launch of last This further beginning eOne progress Brian synergies is value unlocking from the to progress, we significant rapidly business and products,

segment favorable quarter in provide earnings Looking the is focus discussed points certain on gains my at game plans declined Brands product Wizards outlook for for Latin support year revenue Hasbro release due higher other details event, by and a profit in I XXXX. the in In Magic: XX% profit and and for and operating or as declines The on by revenues launches. by to operating and presentation result investor segment, notably higher costs grew our of shipments product Chris profit development most America Operating The international X% International revenues XXX will the and offset At increased Magic: and our flat. offset Cox operating did items and basis Gathering. our area. Gaming. Asia. the this at mix, share lower Franchise fourth declined to led today. revenue and in Wizards’ freight partially due will royalties. about performance, advertising commentary an in growth of to and costs revenue profit future spending, Gathering U.S. partially well as revenues full in increased lower increased European domestic Coast profit marketing Canada as XXXX increased U.S. operating more Hasbro our and were The lower segment Gaming as primarily

and this Latin revenue and declined. retail. we underdeveloped. impacted we America our closed. throughout we inventory challenging. compared reduced segment discussed XXXX, both increased and led partially as profit Operating higher lower revenues eOne to licensing decreased by revenue growth in declines for shutdowns well due as to from gaming segment expense. products. was This COVID-XX retail as the and from as and is Transformers game cost are XXXX digital pro year, by due which well toy the consumer lower decline offset lower the and As margin licensed and were business E-comm Retailers to savings. revenue now revenue licensed brand forma TV action Bumblebee film drive theater as and disruption. margins the profit in better Entertainment, royalty Operating stabilize and entertainment from market XXXX advertising And The related behind included family year. eOne segment the production declined at profit live in improvement positioned revenue declined film to digital revenue

gross the To levels in improvements and components combined XXX Coast in For earnings Wizards in inventory XXXX cost with Hasbro gaming, slightly of a markdowns margin, better sales improvement. you points. cost sales program percentage revenue. overall, of of reduction presentation Asia including included help by additional we the and our by drove of sales cost of Product mix lower resulted were increased the The This, a in the to understand offset retail. led the breakdown amortization, amortization as at today. reduce Latin and program of America partially basis

and more XXXX, For XX% revenue, program the percentage cost return more when as by to have is and of but shop planned X% of total. lines, million to expected in and decline the several to amortization, in as percentage the at are of this X% eOne. which Partner Royalties $XX came a spend addition anticipate across coming ad decrease decline from were reflecting acquisition the than anticipate to levels normal In we the expected during Brand traditionally $XX levels, events, approximately eOne, in theatrical range. to launches, Advertising slightly offset and to to activity to We a streaming is excluding we decision be XXXX, would as But revenue amortization rights anticipate sales theatrical amortization it’s both not in a support a consumers to down were X% fully of to in than Intangible slightly portfolio. of content levels year support range. million percentage was mix. and certain XXXX, periods property reflecting our P&A forecasted entertainment for to innovation unable historical advertise XXXX of in now of amortized. our lower the lower in to as to more revenue, normal be

well namely up totaled the resulting aggressive which took from For offset decline was actions, of revenues, by in meaningfully, XX.X% some We spending as SG&A debt spending dollars cost pandemic, slightly part costs, the a return. increase, In freight to for at higher of bad decrease XXXX, lowered is as will SG&A and should XXXX, and XX%. development. but as this gaming overall depreciation investments revenue. Wizards in percentage saving but from of expected

environment, are impacts We SG&A. the of which both and sales closely freight cost watching

We have be and despite few been at does cost challenges increasing demand in port the able reversing but appear to not so shipping meet and doing congestion, to the least is in next not months. of

$XXX expense from million down May, million we As should $XXX in due $XXX pay note decline approximately the including million. to debt, interest

of tax to tax intangible. underlying the planning be excluding XX%, integration expect our and acquisition to underlying further XXXX, XX%. and the XX%, discrete tax was discrete planning. expected amortization X%. quarter For XXXX which our benefits ordinary was one-time with intangible on currently enacted ordinary the the other is due quarter ongoing benefit tax eOne law, primarily and Based items, for The includes charges amortization The eOne integration discrete charges the eOne rate rate tax underlying associated tax rate, approximately associated we fourth absent with acquisition, in of roughly

enjoyment and gaming, investments As times development, our we our of we made in a to at pandemic, recognize talent entertainment in view to watching from and operate. shared these our through drive develop story to desire tenets our year digital ability connecting studio, brands value do. we chain the in we The a are to unpredictable but a continue play, XXXX, in businesses last we everyone’s and advantage, that that the of We in ahead, make were you things has where supply operate core it’s as better sharing today and in in the of reinforced Hasbro’s gaming, expect. life through e-comm innovation, and important don’t and to instrumental with competing to look all the

We to our have revenue entertainment great coming confidence and brands, year plan and our the in launches our grow teams for in our gaming and earnings.

more investor looking are to about Brian plans long-term questions. XX. our I our event happy to We on forward And your at take are sharing and February now

Operator

And is questions. coming Thank first you. Handler Instructions] Please line proceed from your Eric our with of Thank with [Operator you. MKM the question Partners.

Eric Handler

if Good plus bit you we end Hopefully, six morning shows or this and How as almost a will seems sort thanks year. about could for you be the year-round five are the or Disney+, Marvel of another and are different there fully your feature combination of for be in the film, advantage you TV TV content? at question. year, look but now Brian, is wonder talk like you five of all the this so films, it taking the of getting With business. planning business? back this I will TV a

Brian Goldner

portfolio. Exactly. big innovation Marvel yes, in you the has commerce trailers Well, to theatrical short-form major that board product. all in purchases linear promotions merchandising, taking major content of and in absolutely work as you certain will a on all some enough also a And the we eventize feature done the watching is have virtual where leading shop. our footage period, Eric, more hope a of I streamed occur people strength the then perennial with Disney effort importantly, we Disney+. on working are store of game night would on with kinds and over where as get to to partnership this be right. are have really in had to tipping are between great well our launches. hit around that and point show time been that e-commerce in then teams we a advantage The the for has actually the we play content, retailers believed and been given able content the streaming last and platform saw put What’s

didn’t a growth business held So strength. opportunity. well although very see the believe that has we yes, up we year, The we been last have and Marvel perennial

kid and at benefited business it’s we just vehicle Star stream like is have the our business If business back a Wars, we of content, fleet of our The a behind grown Child with that’s from animated omni-channel you substantially in theatrical we look a yet older that our at experience major If all is other dozens the and POS of in it’s Transformers the up. with product, our for a more And own driven the no really is series that mission have day way dedicated fan have and been War quite we products linking black business behind just for The community, to theatrical size business which to Cybertron, a of has Netflix look and on not results and Transformers Mandalorian. to effort. kids good where we business e-comm up, strong, it’s when series,

as as very major a are this and the content. excited combination well stream have we content year about yes, film So of we play

Eric Handler

And of Great. first gain? just half quarter. that at we be one able Is Gathering pushed XXXX, of note made mobile Magic: The got Wondering year to the game might that launch last event? see what this you a point into follow-up,

Brian Goldner

Yes.

launch. to and Android will year have this it it’s a actually launch pre-release go – So later we on full now will bit just also a like and access the iOS a format on

and and to and on from is formatting way number like months people XXXX the it’s now the create in its really it’s well it’s and very, of game. the team a very yes, So playable

really on are frankly that about to broader playing gaming in the their audience PCs. we So versus are excited playing getting mobilely

Eric Handler

you. Thank

Operator

Jefferies. comes proceed Wissink line question Steph Please next your of questions. Our the with from with

Steph Wissink

everyone. morning Good you. Thank

Brian, have are We about Deb question the backlog. jump eOne. best but understand little then definitely well, for is maybe bit related this and to a trying to you a two-part as in we

business the Masks your and to will ‘XX the percentage you. quarter, much graveyarding year, the programming the think you do proportionality, at Hasbro licensees you channel? business, XXXX? product the can to a that planned with get fourth you start shelf product of in of related, committed Thank be as in the point like versus of through to of you us existing then had that the help it your can what’s decent in in-house just fourth up your So how off And in Peppa for the the the on recoup the of the PJ legacy rollout what mechanics what As and will quarter, licensees? be sounds we

Brian Goldner

Yes, great.

and So let as marketed bit business, On question. team, then Peppa led at will I’ll a creative the and teams developed lines. PJ, look the do and I about Peppa the Peppa and talk glove we have product Deb first to eOne in They have hand with and PJ. on PJ work that

We are most the Peppa. in preschoolers. on nice season It the is watched for YouTube show

with well distributed line. coming lines really the product that content everywhere up show and have the new We

looking the come the For quarter. fourth we line product kids, PJ that will Peppa already again, a of fourth note that each – have we play that to product both really the experiences those products there are around Steph, at new line. in in robust developing and play those, Order will really to world. this we are for in and are that lot magnitude and licensees our of in create important we season consumers, developed of categories for valuable season probably all XX are product and PJ, it’s lines fans and really But bring also are

licensees be businesses. those to continue will there so on And

of and between time. over that team toy than combined the consumer products given products Hasbro footprint programs global had core robust and our more even consumer game Hasbro fact, building are licensees In bigger eOne some has have much

at looking in-housing major the benefit are Peppa parts this of but license entirety we PJ. really the and of for We and bringing So, the financially. of, in business not get

connectivity enable a even job better retail then the consumer around we as are our to do go to licensees driving We the products world.

the We essential this is the mass smaller remember, around because apparel the world. all and stores or reopening, those bedding backpacks have stores in the the or kids shops seen with hypermarkets footwear and license market omni-channel product at just not and type category of and sold back-to-school product

And brands also able we with particularly great I for fourth the both stores. more Last reopening and our so over quarter, were point the to has licensees for holiday, results have helped. seen out make work the reopened of coming some is PJ,

seen both in and foothold very strongly, then is build much even brands very years the great and as and preschool. where the so Peppa coming takeaway PJ but to PJ have Hasbro bigger quite over for in Peppa a out didn’t business, a a about feel have robust financial opportunity is broadly compete to we We more category good importantly

And we also so will talk about first – using storytelling. And will is immense launch you the more and working IP to new they do one? properties Deb, new expertise that want on their the it, and team also

Deb Thomas

think like went on Thanks, been going to we we has and eOne, was continue. try with able Sure. good it Steph. continue animation to could as and get morning, we they to largely Yes, what been some first up at as running But could. largely things hiccups know, Brian carry-forward and as animation all about the remote uninterrupted from where maybe has

that in seeing so So what been to-date progressing are far. actually we you have

able expect deliver gotten there small projecting get to film a live-action that be does we to spend it got on up the twice are are But content quarter, Brian the we and as we that moved we most question finish production made A saw on is made end get in in we that lot at have the in that’s mean much? to to but really that’s the during growth year very And relates and production also lot that in being of in lot track be of a we the XXXX, of that progress quarter well. to progress past all into of markets. on And comes started talked we the productions spend XXXX. as to carryover, to just done. to XXXX fourth about the has third forward the indeed and but other A other it unscripted. it’s being is running why on year. So, we going If TV. Entertainment the that it for percent you look able have as full of the and and are One brands,

So deliver in and we that we do programming will that able be ongoing XXXX finish it. expect to

Brian Goldner

add commensurate only fully we IP, new out Hasbro our way just the could expectation back branded eOne’s XXXX that XXXX revenues the the probably for has strength, business. we for to I thing you new eOne, IP, world-class at working are for given in Steph, developed for frame would to that the revenues team eOne Yes. the they certainly, and way on and year, saw historical this from growth IP probably look receptivity expect we

mix time, So Hasbro shifting expect some by easier some growth scripted we where into and followed to produce, that it’s with theatricals over and increasingly IP real good beginning unscripted television.

Steph Wissink

very Okay, thank you much.

Operator

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

Arpine Kocharyan

of but help understand, brands eOne reasonable terms Thank of in in be for range Pig under what morning. like versus XXXX? and is I to are should underlying that of good you operating incremental Peppa to year bringing business thinking sort growth. a margin, operating toy margin you and us growth, you Hasbro your toy Could this an Masks gave you we components under build know different PJ

Deb Thomas

Certainly, certainly.

that’s and – Brian So follow-up. it’s good a

like do businesses all incurring They ramp are brands as brands as cost way, for want else in that to right as component those over pressure licensees. that, really additional in that just having our and with you if time, And PJ about a as we are think costs expanding up relationship safe that the some half going was that in, we the with the things COVID-XX question launch because people is the you profitability of got near pressure and and in and what the of because see there in around they successful the is and around everything keep it year, but the and pressure. to have is some about to – are last and term. near-term we terrific add get thanks on up we near-term, brought perfect It the the that there We have when and ourselves So we well we profit, latter that. ready continued think there entertainment such things some now. to is up cost product protocols from are expense as tooling Peppa, advertising make

some that being it the you these over traditional profitable well business of able the because from and make And what profitability impacted expect game we that and time. we bit entertainment past. So, as a a we once the see to in near-term certainly the over to side incorporate Hasbro Brian earlier, profitability Hasbro toy as more initial even would range costs, sourcing are on incorporate into see but to that growing and by these of actually of more some over growing of costs the see said IP helps time time,

Arpine Kocharyan

helpful. That’s Okay.

the drivers share there in could of do item, on In year? licensing we comps. understandably, that you to is Bumblebee and the from drove was and well, entertainment that business XXXX at perhaps while this quarter going your Arena terms you out MTG and of you what offset what line of on decline breakdown could what maybe parse views it, you for quarter But as in on comment this of revenue and lot have Thank expect you terms you. see and growth are could a

Brian Goldner

Sure.

period, during business that our considerably over was If you up gaming that gaming. and Playing up gamers category, for products look quite consumer digital, year. at in the was licensing global digital digital

tailwind a it successful. lot we third-party quite As that of being are was and seeing are you know, a games new

like very Buddies to from games Yahtzee some a with that at also high Scopely. We continues perform see perennial level

that a that’s quite So, category well. done has

of in of quarter, put businesses as that selling those some products, revenues there but starting period before are consumer I major sold back against into where about talked momentum challenge smaller to during retailers those the see as reopening. children’s are And well business those the have as toy you are over clearly the we a we retailers. of the indicated fourth seeing the products, in mass-market that in are or as a closure We a at types short-term, well being XXXX, in as retailers lot children’s other apparel

opportunity products, Hasbro as an we So add we go we more XXXX. for growth forward has in believe consumer IP as certainly

products an event feature robust program Pony both Hasbro-developed building Little are about new about if I comment from a animated you consumer film, very profit the from want as are profile? forward kind march which product excited march and around of and well Deb, will further don’t we all – My as there. We that the know be very to forward we for should we

Deb Thomas

our to favorably the fairly Yes. to business got running, mentioned thing there under that retailers as coming on we’ve launching digital out that the gaming, color that I gaming forward. past. those Brian And of see we’ve around we and handle The launches you them Arena been get more able as a try the in our those on Day so this had this a the to as year and year. and few it. impacting digital is that feet size XX move a from high business. would Wizards out out as other back games at we only Coast as standpoint, few get games to earlier, on margin add profit back brand, we’ve working Investor of year, carry that as initial they’re have license costs. We come bit digital some their think give about up depreciation profitability a everyone. that’s Those that that because said, we of this profitability We’ll much Brian But seen from a wouldn’t capitalize And to

Arpine Kocharyan

Thank you.

Operator

your Capital the Berenberg questions. David Markets. next The line Beckel question is with from of Please with proceed

David Beckel

the two. for Thanks I have question. Great.

Hasbro you’re was the First hoping extremely give up. frame bit. industry pretty also nature broad-based last the I could follow-up. Brian, a guidance maybe some idiosyncratic given specific was have comment toy channels, growth around your the clearly, what for of through sort know industry to probably And of outlook put But as year, year I I just unfolds? for you place you e-commerce year for sort loath strong you what as is year, picking this here. for the one on expect hoping then took the Thanks. for and whole a of expectation which a this growth, could context I retail

Brian Goldner

Yes. Sure.

think parties. growth modest some that for are presented I think of And look look, saw should other toy the like So think expectations been they some more very from third has NPD industry and I some what growth XXXX. by robust you XXXX. the of kind sources in There reevaluating

number or able industry ahead Our toy XXXX numbers line belief should of to be is a year the we of in grow the for that reasons. for

have innovations. this year. If Brands was example, of Pony, with restating We the the great we’ve rolled for we’re how and Brands. we But that the of about XX% except out take where quarter, with Franchise at exception talked Every Franchise everywhere. XX% we all Transformers. our way My saw Franchise growth for I up grew had we our it growth one already Little the Brands have for the great We year look U.S. in in finished if business, didn’t product, product you fourth double-digit

and inventory, growing had where the was exit a in year other really we growing. major So where were the all NERF we market brands

We January, up and XX%, XXXX, have nearly our through POS Dave, entered is XX%.

Monopoly And the so we’re and it stock At it’s Scan stock. POS. games holiday growth consumer demand We of category in again, of selling Bop The Pet but Many this we It! out the games. product Operation just that mean, is tail keep couldn’t last The the game I we last in end continues in not were year in stock. and a selling and categories. couldn’t products keep in sales, toy again some that certain year, size around Child, are categories stock of year.

for inventory, of XX%. reason, the was our of into back the seeing e-comm getting e-comm clearly e-comm then POS growth capabilities again, of we’re that XX%, and and because and So I year seeing very was brick-and-mortar. because in up ahead but mean full up way last year innovation, running our robust quarter fourth our

game. ahead we’ll for industry I grow in of So and brand toy brand, think

Hasbro as I and But into we profitable beyond to depreciation marketing enabling is should Hasbro margin where us expect reward grow as the digital expands for entertainment time course, Coast, the games, of create viewed we expense. to marketing days a from launching historically over faster as have of do and with investments mix versus become over the in products some And also goes the where consumer time. entertainment. then, was products of entertainment more think we gaming The eOne of IP. get I those those sales profitable where more Wizards shift we as more early expense. And the level

at led the different think consumer I say our entertainment look So it units, with year with clear and between by business business game, and that’s Wizards we very profit obviously of And X all as with profiles digital up. setting business how really, products toy and eOne. our would revenue

David Beckel

flow the least cost. some super Thank of sort production medium-term translate you am delay without if wondering of Thanks. agree Operating might going Deb. this can And to forward, sounds for significantly learnings, higher your you relates one capital, operating that guidance. year due particularly about you. expectations That’s cash if at like But think statement? to help I as helpful. it of cash into flow, working obviously, how outperformed us It your was

Deb Thomas

my balance to team prepared Sure. as was around business I our But I in as capital. we performing, expect time cash strong moving our $XXX a that saw near-term, cash and to operating that than us revenue out are single the $XXX every capital had million with that Hasbro we proud also, XXXX. get we collect think XXXX. working do anticipate mean Well, of kind the what to able so from in in of able about again see past. I’m But do and that operating within that we a keep someplace have able as piece and – in But we remarks, it falling in range I $XXX earlier there let’s impressed $XXX the the in our what being to say, at I to than in much can. as see said to with have you get cash each costs talked our just employee well. it I And working things content to we million million don’t we and million benefit the certainly sheet we can back average over more flow flow near-term, launch about range. in in we investing as expect investing more are be to we levels bit rally

David Beckel

Great. Thank you much. so

Operator

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

Michael Ng

first that morning. for on revenue. you question sales. those good is understanding question. My sales historically, very the much toy for is Hey, royalty eOne as net Thank just were toys My kind and the

on this Hasbro the think these any As uplift big about revenue correct so, from like-for-like synergies potential if toy think executing way doesn’t basis, licenses include that you. that And a Thank appreciating brings toy account be that to – those could how Is licenses business in, revenue. I it? in like-for-like that better? wholesale Hasbro that for

Deb Thomas

let talk me the Well, Brian deal with opportunity. growth to I’ll the and Sure. mechanics, let

So XXX% you’re correct.

our we’ll costs be some against the Hasbro will like but and it against would business, will of see it as royalty additional mostly in applied seen sales impact have it revenue would gross coming through You revenue the that have past. come revenue, There cost coming in you flow that, of it. the into wholesale in the rest When and margin. like

costs. than revenue the things revenue not has opportunity? a look the through, profitability in we’ve would potential talk standpoint, growth and that to far future near-term, and the the start-up costs from like launch do some if want in margin brands. see that, we’ll additional tooling royalty that not be profitability drive off, but start-up as and as different will growth see bit you’re So In going in invested the that was you a it it about revenue we to pure have the gross coming it growth Brian,

Brian Goldner

Appreciate Deb. you, it. Thank Yes.

bear and because dozens several-fold and we’re historical we’re to of developing will the we’re as look expansive, are We’ll support, parts an core have well as expand there married consumer as as – doing global the are and that We’ll our by received products bespoke expectation consumer So bringing that Mike, well of of of that up expert eOne really our as we new items, other at Hasbro actually certain between our retailers our other actually blood they is a experts we Hasbro program of have and footprint, great distribution elements I products categories mentioned parts in. our now some are into experts we behind now business, and product expand. very a toy that’s products here. one, these Number licensees, have lines well. geographic who team already new business some that expand were business, quite

I a robust much products consumer get think program. more we

We are content. eOne also seeing new incredible

the As Deb continued COVID animation over had mentioned, the period.

distance. We’re at able to animation produce

as will that as in period, Hasbro have well consumer lot audience ties consumer time, format, the you’re every show including expressed holiday, will we in YouTube. products. so play over this holiday new fall. the holiday directly to the going where products And example are come as a of for engaging new viewed our to market as top And see that well the being for almost patterns this the that in And content is is a really, new they’re Pig our content that bringing our Peppa for on period beyond really bespoke products products

So, those both happen. of things

revenues an eOne the great few story considerable opportunity and from in talk and that around very of the growth as that a really, And Hasbro’s particularly preschool then add storytelling, preschool, and one go of fold. The beyond opportunity. beginning preschool tied was fully we And that. talk IP in eOne for several new arena altogether. saw opportunity And has about character great seeing been as then of I also the has around support will to a are we we let innovation fold a be we pieces won’t now, to began development major player is great great and opportunity, course, character we So I’ve to in should to in forward. lifestyle addition, and some we the have and And that go grow in discussed just where the storytellers dimensions these later, our that about IP across new as presence talk space. them the from will

Michael Ng

That’s that Deb all and you, Thank Brian really Great. for detail. helpful.

Operator

line the from comes Please questions. Zakaria question your of next The JPMorgan. with proceed with Tami

Tami Zakaria

so Thank for questions. Hi. much you taking my

So revenues around my could saw I is in XXXX media you think mentioned the it range question first generate eOne happened. before COVID eOne,

I’m – think if think me correct I I brands. revenues in wrong, billion, from excluding but XXXX, at So were TV-related that the time, family eOne about $X media,

is the – XXXX? for right that of think eOne terms revenues So is about in in sort to of benchmark

Brian Goldner

think and probably all deliver to they’re eOne television we for that pretty we right, into was are component. what compared get they family well yes, achieve for we what be XXXX $X.X in including for – film, well you you as brands good I So total brand at a content XXXX from as able say, looking in about you’re think a – could because XXXX, we billion. But of is marker brands as eOne $X.X we – at with look XXXX. effort, there’s the it that as took to what if And as their family expect family billion

Tami Zakaria

it. Got

that’s So well? including brands family as revenue the

Brian Goldner

get Brands, couple in Remember, content. Family we for the paid a is different comes One the revenue in, places. Correct. of

board you is get the yes, to become toy or expressed expressed will revenues business products the then Those We part of of lines an are Deb, the toy there’s within eOne game comment? the for But toy eOne’s some within that line taking lines. revenue. they So toy do want revenues. consumer and on as company.

Deb Thomas

wanted the just might forma XXXX breakdown pro it I press today’s point in helpful was Yes. release, back to that be we refer if Tami, did actually for to. have out, to

the I think last on it’s very page.

quite not might have You gotten there.

Tami Zakaria

Got it.

Deb Thomas

was a release. long release. long It a It’s

Tami Zakaria

de-leverage Got provided Thank you And much. the it some is seems the then in EBITDA guidance think margin you my second in call, the question like slight may so XXXX. bucket, see buckets I it.

much us transitory related other that comment unpack actually you on actually and of stuff, can in that COVID might get to you So back is XXXX? how help and and

Deb Thomas

Yes.

say levels. are some from continue that we the color all with costs earnings components as for with – invest bring respect about going an ongoing at of revenues but we’re some look market. hit XXXX to expect revenue see components different adjusted, see in to give Brian more also associated creating think XXXX will that there we and did we think that where to be to as grow gaming I for we adjusted play the basis that, long-term EBITDA. in and we product that, And to the on But the and in can development consumer product, ongoing development to XXXX things we We’ll us. talked product the toy innovative depreciation, comparison game with business digital

get some our in and ongoing cost expect we that. So we But haven’t bottom components that will XXXX. the more XXXX into meeting with we we basis, today growth see on in of from XX. a about do line the And detailed top talked on

Tami Zakaria

much. Super it. Got you Thank helpful. so

Operator

from proceed is your question line Fred next with Our the with Wightman Research. Please questions. of Wolfe

Fred Wightman

Good morning. Hey, guys.

corrected just the December what key wondering You some quarter? I’m had and happened remarks. that’s in in weeks we you prepared exactly whether could the first as called during if into head out challenges touch on

Brian Goldner

it observation. just Really, interesting an was Sure.

and there ton toy October, promotion incredibly time. And toy than was quarter POS all kicked around into years in game course, was had the in at third of more holiday holiday, look during strong earnings. that the we December. we’ve and probably and lots our prior And of November as intense a in holiday off orientation, a discussed we’ve had because, we orientation of As even longer October

well, into our was we of we I’ve expressed December, that of other as a X some consumer just categories As got in businesses. there before seen a saw and right products bit in this pause weeks

the on to during time. was macro products those couple did of and Monopoly the we’ve experts seen games as of of that it U.S., inventories consumer fourth enough like also was that I It!, checks the talking a bit in of coming on Bop do in period economic our on there had brands for dwindling during if we be about additional the were NERF up some some the and to quarter ahead if make fall Child the our and NERF, read full some where a few weeks grow our to the for support brands rates have was a we I fill that up growth talked The some some in key of NERF. everywhere. great Operation during going frankly, and in And really down products see waiting other were U.S. I around and think that Christmas. right and We side, NERF year saw, time of to But didn’t of NERF

you slightly against importantly, our during POS the time, told year a because you, in bit there if little a a a the most incredible Frozen a our Remember, XXXX the quarter consumer but of had you take we of see time, little lot, compilation the ago, we exclude up few. all But We down a not expect then NERF of on if that to few comp an bit again, we for just and tempering categories, the is of the comp grow largest initiatives. where the fourth from that during in NERF I a bit Frozen. few think was for success were Then a XXXX. places Hasbro, product headwind

If globally goes quarter. Frozen mid-single digits you actually the our out, to POS in during fourth growth took up

period of in that time. So that’s just, again,

seeing an we been very in we have actually why And Christmas strong. Weeks are Christmas happened January, described following is incredibly was what Then that’s week So strong. acceleration. just that.

and and as holidays, gift gifting, I we’re as people for presents lots together just and quarter. and think coming products, first as weren’t brands strong get who and people immense through the of way other we of sends consumption our cards an formats, gift other move cards amount launches the seeing Hasbro of

holiday why just and it season. some a it’s and description. I additional clearly broader, COVID longer And given say closures, openings that’s So demands

Fred Wightman

sense. last eOne I synergies, quickly the end previously million year. think the you had guys then out million that just million $XX of ‘XX. $XX The on was called That And to number makes we by $XX

target actually you about in cost or guys of savings is was just pull-forward So there past? incremental talked some a $XXX it the that million upside to have that

Deb Thomas

Brian at that that’s teams. remotely. I able things just we some were into all of faster. mentioned things target think cost get we done savings some consumer end But bit million the to of We to I licensing integrate we our working of our because look by still, products if were fully XXXX could little earlier, $XXX able – a we the XXXX. And mean, – were target accelerate you now. like right the

integrate is we haven’t groups been yet. However, fully that other able still some there to

it was of We two-thirds original – was timing. on our – But working actually coming that product We’re in in-sourcing. not from just

timing that yet. changed hasn’t So really

We beginning in-source for to are product that this season. this for holiday fall

or grow through it bit have an to that acceleration. whether but So better a we a was number progress XXXX we will not of as to insight

Brian Goldner

because, it’s XXXX. than our if again, sizable $XX that look a your – then to you probably than game far in-sourcing going much for bit more at and investor have you that’s for But begins big bigger call. size That expectation number toy And we’re our XXXX. – the the we’ll expectation It’s for products. in not that of wasn’t Yes. million XXXX, in a

Fred Wightman

Great. Thank you.

Operator

the Bank America. The line from of of your is Brisco with Please you. question questions. next Thank proceed with Devin

Devin Brisco

my Thanks for taking questions.

Just one consolidated another TV on and early platforms. and being film monetized eOne, later, industry, the and DTC are on increasingly windows across both

order Hasbro thinking begins return windowing product consumer optimize the more distribution both IP TV sort strategies ultimates and investment the on about through various of you As content in way for its utilize and can channels film continues? how as your to to eOne engine, are that you this the trend make and piece

Brian Goldner

with their for entering eOne, they that great content, own which lot and and like studios terrestrial. using for developing – open of streamers, said eOne for platforms, companies have we expert leads Well, their us looking we like seeing a broadcasters, streaming along were IP launched an Clearly, we’re people look, Yes. and IP opportunity own that platforms and be era And they’re and is IP all need we platforms, also a other as their many streaming have world-class global brands would as right group Hasbro. for linear for that. to came thought from together service we streamers business or at of world-class and

marries fact broadest So the have portfolio we to our that opportunity. directly see a business. the real It we in

gaming we that kids gaming. have families, stretch We fans and great from lifestyle certainly, stretch have also but adult and that brands into brands and

across a busy developing future places. of We’ll number we’re iterations Dungeons of have number Dragons in of dimensions. So different & a Transformers

or add We have this that I’m great or theatrical we simultaneous stream a a have see windows. Power theatrical to opportunity new the IP the – going to have let a month. opportunity team to the new go the other and later window that and storytelling talk between about through by theatrical big stewardship window multiple window. still a Hasbro creative more in We followed shorter Rangers see will streaming several a But areas.

is think expert maximize waterfall the I opportunity entertainment and will we’ll around nomenclature driving world, windows through and and as we’re the that that properties and on changing opportunities products those the initiatives. while executing the of and in speak. the able team gaming around our in the also to and consumer the shifting move eventize those of lot return and that for we the theatrically be get reflected And and patterns programming investment of at support we’re are the play windows so to of with streamers then and conversation the our all that ensuring a ubiquity story character

Devin Brisco

normalized today cadence about of production update content XXXX? should we stands for cash relative $XXX you Great. And to where on spend million in the $XXX could to provide an the And levels? million how think

Deb Thomas

and up all running. in Actually, we were production in territories territories. now Well, most Sure. are working

on up delayed Some and is things but may get what’s the everything depending running set, happening now. on

changed One asked eOne. from I’m XXXX great things before of because last had to in glad in really of year, about that’s remember, the world cadence, we March the important a about actually think hit you you

to you a open. of first when the year So drove quarter still being that of the big last theatrical about kind really think impact

little into lumpier up quarter business, toy fourth and get being made, but the the production we when just get we So it able know, be might revenue just have see you now was you at able a a what as term, than accounting at progressing I use grow my revenue. we Devin, look see eOne cadence, entertainment those this, Brian, as say and recognition favorite I could a little, throughout look the to traditional were the year? in And when and they I to know, deliveries

with near-term impact theatrical as over about Brian the said, in as distribution. in of great providing being theatrical that by content But this So take see we able like well an as of XXXX because time. excited we’re advantage something to streaming

Devin Brisco

Thank you.

Operator

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

Gerrick Johnson

I like going good Hey, morning. last.

How very Brian? do get, questions many you I thank much. So

Deb Thomas

Gerrick last, are good you certain and be wouldn’t I morning.

Gerrick Johnson

got a Okay. I be I how quite brief will I here. have can see few.

First, just the don’t that toy answer think an for before. you asked industry industry, the itself. outlook for for gave the David XXXX I

in international about U.S.? worldwide and actually – or like and two numbers, how So

Brian Goldner

shifting saw that, think that early We number didn’t number understand I as look, NPD frankly, we from well. Well, is an around.

that they’ll hoping clarify. We’re

because and my at I that in continuing interested going the too that according that consumers on seeing thought game in and we’re bit industry. back I already January And given I to fact it think to be window the what team, a kind they’re they’re think reconsidering, was low. and are number working the of relooking very toy

line content we’ve industry. year, give growth. said believe is. is toy should storytelling that combination capabilities, a a in good industry the the than tell fact you we or NPD didn’t digits line our where think to innovation for but and built different elements low, such you be business that I ahead the What the time, orchestration we in because and better of and or we robust waiting of why in that the tough is should also that’s Euromonitor be capabilities number operating and the believe over with grow all able be I’ve market I to a of we reevaluate And and because of can in e-comm kind the will mid-single that over between time they of in So our year,

Gerrick Johnson

that not earlier was was sure out that the correct? put number you’re what So NPD is

Brian Goldner

having them going early early to such estimates out not it some to robust felt I given and we’re go not my that And back that in I’m I I’m team they whether about the were the team it are, was published think let should with out year. or growth seeing they to that need – they the comment fact conversations they reevaluate. sure But because subscribers.

a as they’re think full projection I year. out for the or considering

Gerrick Johnson

January don’t I’d Regardless of What you the gift cards. planning do very year? are And of say, January, through comp Alright. this think? again, it’s a all lot you easy what a they because extrapolate I in what and for know if way

So...

Brian Goldner

Of course.

Gerrick Johnson

for planning ‘XX? are you What

Brian Goldner

and business have the our to and we we expect great have this And think in a we we’ll we innovation year believe I grow where be... Look, said, year. toy unlock, game we

Gerrick Johnson

This year?

Brian Goldner

growth. we’ll said games This be robust single-digits we of land. the on be deliver But industry again, to in year, with toys depending is and we believe able and ahead in around mid good, they should where or where I’ve line is a year

Gerrick Johnson

Okay.

Okay. enough. Fair

my XX others. entertainment do how you Moving to those product on million from incremental baked are have third-party you those to movies into here I sure plus in I entertainment, happen. XX revenue of have but movies. going for XXXX. for in model Not many $XXX

you will what’s think movies Micronauts, to this actually do happening this Ghostbusters, does There Venom, year? Eyes, Spider-Man, year? going I’d what’s Shang-Chi, Do movies anyone know Cruella, like what Snake happen what’s So like or to you big happen? to going some know ones happen Raya, are know in

Brian Goldner

they the considerations, of look, will to year. half think first the partnership Well, all looking that, Disney, will happens more be actively particularly think working our hear feel And surprising what I moviegoers people that the Having I big there’ll big where during it’s the that considerations fall are are be not with in at windowing. partners at said into back theaters. we the

you’ve see, like last think game. started to hopefully, on football I the night,

excited for Black is comes basis. and We’ve and quarter. Snake My You the and saw Eternals think now in the June. Dragon, June. Spider-Man trailer May, the coming July. in October, about In working that. in Widow I the in Shang-Chi team We’ve for Last on will great, Venom right got Window. very you got we’re fourth Pony actively September regular slated will Eyes have Ghostbusters scheduled it Raya and supporting. own be later movie, movie that then for a was our the And Little is is be we

particularly great we were be work Some that of earlier, be put of coming about those of may theatrical more and basis be can that shorter we nature the also and Marvel feel then, business. work the talked about brands strategy has streaming Gerrick, in there’s windows. up We lot I’ll fact And can front, just – the out particularly that works, talking we a with mentioned also that, on that our premeditated a robust where will the opportunity, retailers. content a

was that in you back the trailer. Star couple Winter is initiatives March, Falcon XXXX. also And And the Wars content of coming then Raya half a streaming a the come of will different WandaVision, Soldier, in a stream piece great from new and have of that so

Pony like in Snake for Eyes. And maximizing the – high we thing They programs. And great with wrap Maybe think building we’re Little and products for you we might that. Snake is around that just team year. we there’s well we given need make have. Eyes. and Hasbro the constantly understand My IP I at Little last for the of partnership where opportunity, ensure exact this that things exploitation I’m all way point sure And their up. are My been sign with our execute the that want So with want Pony full at We studio to doing will one innovative to question same they the we’re to the as frankly, working as brethren that there believe audiences be at point, getting in to have

Gerrick Johnson

in the theaters, to see can we Hopefully, Micronauts know. as Okay. looking forward you movies particularly I’m the

me bringing brands X like Steph synergies let ‘XX what the you bottom on that. to back go of something and or kind talk more, to run in-house, What’s something synergy Let’s line Peppa from in-house? one PJ. get With can have Mike on rate? those and the annual like both I an If Okay. asked those

Deb Thomas

the that from does streams – create well. Two-thirds million Peppa $XXX said more of That, that as But of we consumer cost So drive PJ doesn’t side innovative a that that. synergies, opportunity which our in-sourcing. in-house product course, we revenue we and expect product number and PJ, is around product impact we include revenue made around as from were synergies include bringing of that see and so... Peppa up other

Gerrick Johnson

Okay, to okay. guys. Alright. Thanks you Thank you. Talk later.

Deb Thomas

Thanks.

Brian Goldner

Yes.

Operator

turn now closing Hancock comments. I’ll Debbie the back call to for

Debbie Hancock

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

us for remarks February you call. on Additionally, Thank following be posted website you. prepared able event. We our will be hope virtual on to will our join investor management’s this XX

Operator

conference. This concludes today’s

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