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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
Mike Ng Goldman Sachs
Eric Handler MKM Partners
Steph Wissink Jefferies
David Beckel Berenberg Capital
Arpine Kocharyan UBS
Tami Zakaria JPMorgan
Drew Crum Stifel
Gerrick Johnson BMO Capital Markets
Fred Wightman Wolfe Research
Devin Brisco Bank of America
Shawn Collins Citigroup
Call transcript
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Operator

Greetings. Welcome to Hasbro’s First Quarter 2021 Earnings Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] Please note that this conference is being recorded.

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

Debbie Hancock

Thank you and good morning everyone.

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

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

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

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

Brian Goldner

joining everyone you for Good and Debbie. us morning you, Thank thank today.

world track our in segment; the and excellent double-digit Products the our generation. growth and on we’re an in Entertainment. momentum, in Consumer cash growth quarter and driving we want I deliver through who of was to both to the segment; Wizards such for to able year sale start and a high-quality and to a growth full Coast work Digital of expected to quarter the improvement revenue in profit Gaming engagement robust continue gamers and thank revenue first from with strong point recognize around sell remain with year, deliver The employees the Hasbro pandemic

with clearer This drivers view a the of quarter and structure, revenues, margin marked provides first profit, reporting new of our the which generation. Hasbro cash segment

event games; Products, create Digital drives our in As as drives a but we Wizards Brand plan and we that Entertainment. growth across from February, Blueprint Each investor the including value toys Coast of shared growth Consumer has also that Hasbro segment, businesses; at succeeds and and our our Hasbro. three Gaming;

expanding digital gaming Consumer quarter are to these in up bigger a With pre-COVID. Wizards entertainment but Gaming toys growth spans of and and Coast includes company. games, speak capabilities of the invest in portfolio our the while segment will growth and of unique brands are generative performance detail more us full quarterly enabling much bigger, businesses that build nearly both brands Deb and and from across also capabilities revenues. teams potential to and long-term, sustainable we Our and cash the is It brands driving the our profitable year-over-year double-digit unlock first shortly. XX% Digital universe to clear and is better Products XXXX,

have impressive $XXX dollars added the profit in of growth operating segments. the two this as Importantly, we million quality is between

X.X MAGIC: by ALIVE. regions high-single in line does including Franchise with and gains BABY and PLAYDOH, increased and MAGIC: and growth led nearly of Dinosquad, continued digit Brands POS and revenue all sale X% our XX%, which Hasbro line, We or March games. not set continue Rival DUNGEONS globally of most fully yet as NERF this is TRANSFORMERS which of launch high-performance reflect PIG to see Hasbro’s increased does not have Ultra our Europe. in the U.S. GATHERING March, of the Hasbro all in released toys sale Innovation point in the Fortnite the with around consumers point growth, reflect ages increase PEPPA brands in strength XX% NERF, by driving PJ and of THE U.S. and evidenced Shot. now THE Curve DRAGONS and of Elite revenue GATHERING, business for consumers choosing the & the MASKS This licensed world,

hours. and continues Ecomm shift investments the content Roblox of shift fans XX% behaviors by less have much supported Fest accelerating in XX slated by sale the growth world Hasbro in the gains Hasbro delivering Pulse driving month, TRANSFORMERS this during central XXXX. side next QX. on top expanding and newly the more franchise continued popular shopping Auto-Converting XX%. with the will the through performance. quarter Netflix War point was Fan with partnership and, Pacific, for brand with our pure in play and Optimus increased delivered drove and the In ecomm kept a quarter. partnership and HasLab consumer feature global team to X and Prime The Hasbro, is to services Robot, in massively for game. the be the TRANSFORMERS We and our this digital December reach we first theatrical the pickup. like We for innovation which than entertainment brand retailers, momentum TRANSFORMERS for U.S. as and products nearly in by that the of in first retailers the class $XXX coming quarter’s airing COVID our are latest be Pulse NERF up the brand storytelling relevance to anticipated in in performer start summer Hyper War of Innovation across announced sold supported in Cybertron revenue led Chapter the partnership to eOne and earlier Unicron. technologies curb Robosen, the TRANSFORMERS demographics. line with For revenues unveiled new Cybertron out on NERF omni-channel to Asia platforms was XX their pre-sale Paramount, is

at slowed. For MAGIC the than comparison, Despite up gaming XX% underlying and the of focal in point is as game continued XX%. than players, year, and XX more tough gaming week X% week same Throughout we into of drove our last a year. gaming Once this including in U.S. began segment, for of the increased sale of revenue point robust retailers. In MONOPOLY quarter, growth. of Products Consumer we around consumers high levels. revenue is last the be category If and demand demand look point was point than to more XXXX total year hit surge demand pre-COVID heading the point sale this sale XX, healthy that higher games sale week and

and the as demand. this and games play spring and for Within classic and the on year. exceptionally both and is the growth to Arena the THE more including of game digital products Wizards good strength licensed Wars revenue year. double-digit both Hasbro new as unveiled and revenue continued Wizards products buzz. both animation, and first slated development in Winter business, also increases. Hasbro team our higher, gaming new of the posted as many of have in continued projects Digital Partner we receiving June eOne DUNGEONS fully is Marvel Soldier segments the as strong mobile. to positive that DRAGONS digital. The timing, early for DUNGEONS XX Dark in expansion Mandalorian; this Brand Gaming, quarter. end for across for grew the Based Alliance behind MAGIC has physical was games The this release continue well XXX second MAGIC: against tabletop second a Falcon Fueling TV, Coast first revenues growth We is more featuring release consumer in quarter Entertainment as momentum by well Marvel the increased. all & our growth to for strength in biggest and led up across meeting distributed in team’s X%, and number DRAGONS revenue expect than shipment be as in film GATHERING Studios’ to quarter and for Star holiday continue will levels availability well gaming high in was the and an on also IPs. than MAGIC late at products release be Spider-Man Shifting last quarter The quarter & franchise

quarter had revenues closures. theatrical we earlier first this the not year, in to this COVID-related year As but last due do year, to we spoke

engagement fans partners TV of set We planning film of at versus LITTLE Life, with We CG networks, remain XX Eyes team through the and including and the With with television revenue is continues are PONY demand movie relaunch drive year product eOne for levels Pulse the new and The broadcast to Pony XXXX shepherding and the July this September. the with is our also target on be now across on to JOE initiatives. later this MY year. also team digital content GI and to release brand events deliveries Netflix our Animated this and release last. track Snake for Film Paramount, our for reach

talented release We an with are cast live-action XXXX & amazingly March new of currently feature, in Dungeons crew. X, date the a pre-production for Dragons and and

and Arthur unscripted, we $XXX productions. business Freeform production principal the to completed the and week the Canada, U.S., with on on and continued yesterday and in are of of two agreement in last The quarter XX premiered million. a the Knives for an films, post-production of All than filming Rookie. announced the Season King, TV, music and During robust UK eOne We we shows In deliveries Old slate wrapped the X sell both. the team In underway, Cruel Summer scripted currently have active more on

our a and focus as to of Brand strategic the elements continue company. Blueprint entertainment on We core play

and acquisition several its music his plan net we with including to of the for talented general for countless them various corporate team partners. and artists to team primary Chris Taylor, music working working and well driver recognize proceeds plan This to for We will grow exploitation transaction rights future. group the the unlock to projects the with and sale the to value their allow eOne. across dedicated use music our purposes. supervision forward and the was accelerate brands, many deleveraging continue continue and on the the want music I of look leadership organization. into not to to of from thank contributions We investing them While entire

toward The our and dividend are our reducing profit first of The a revenue growth growth, job good team generation, debt excellent this our did target quarter’s paying year. delivering achieving an start cash results double-digit strong profile.

as details turn the this innovation Deb. progresses. coming have over We look I’ll call forward year to now year more to and Deb? tremendous we content and sharing the

Deb Thomas

to Thank focus to our XXXX We a goal XX%; driving and quarter, which debt X%, stated of our $X. and strength half to demonstrates good and good including portfolio, were first positive increased commitment as remains two Revenue profit our sheet toward $XX growth everyone. EBITDA. balance per XX%; million exchange. very to earnings on you, grew profitable strengthening our progress operating revenue from Brian two times Adjusted morning a began EBITDA with our return of and our foreign a adjusted share the target grew to adjusted impact

off collections very as was evident. paying on $XXX quarter the absent operating X% our a which $XXX decreasing cash, was days and healthy receivables ended versus flow dividend. in focus quality Inventory grow. in and $X.XX last was cash debt, DSO remain improved. in billion also generated position XX capital May the of we was improved working of million with in continued with FX. quarterly year. paying and invest profitably after million Our declined due to We financial down, Receivables XX We

performance. led Pacific have the Latin Retail this for of products and with MAGIC just new the difficult is down the mentioned, including growth Revenue Europe, U.S. versus each under Licensed declined Hasbro Consumer in we and the with grew Asia our good. Latin year’s Franchise Brian demand last inventories quality strong quarter the Gaming, was and by Brands with Brands, Emerging markets, is and also in inventory in increased consumer segments. revenues operating As grew Products U.S. reported MONOPOLY, America, excluding region, revenue growth quarter the comparison our brands. strong segment in XX% behind slightly geographic along and Brands. first in America. and Partner most

the freight and favorable in a with Coast $X as throughout to costs. royalties segment for revenues revenue segment, had and exchange Profit America segment. improvements. Wizards advertising major DRAGONS and gained the DUNGEONS the North Digital America, increased segment on Operating brands growth. increases Europe by and impact million Foreign Both profit & XX% to million MAGIC: GATHERING $XX somewhat in was offset on in of Gaming segment, well the the the most higher Latin as the THE contributing higher profit quarter. up contributed

and launch exchange digital margin a advertising we which cadence grew Entertainment being Foreign as quarters well game expect business. profit with support million of now had primarily capitalized Operating TV was XX%, Alliance. Film Arena impact segment and the spend to Dark revenues the Magic to higher favorable expensed, declined launch profit product of offset as expense was by essentially impact. mobile due but upcoming more $X flat, the future Operating to significantly. previously partially development, is higher as increased development the revenue,

$X exchange had favorable a the impact in Foreign quarter. million

we with in theaters was challenging. you and earlier open to year, last discussed when Brian the shared year comparison were As the

timing, Given second but of lower growth deliver the quarter-to-quarter, entertainment Operating plan profit our lower amortization margin for profit to the double-digit to quarter. on growth revenue we’ll segment, advertising higher segment. delivery program operating declined with remains nature but full-year in in and beginning the contributed revenue, variances have the

$XXX scripted In Our for million cash and animated the to range planned be spent approximately live we the that content film across million first is the spend $XXX on of of TV year. and million full in $XXX plan. quarter, to action, unscripted

a XX and very expensive and to basis more improvement Cost This freight revenue, impact gross of in including out markets. of growth our percent at as program as amortization from across Wizards cost fewer increased points. and program sales margin, Looking and amortization, revenue, of spoke we close this continues P&L, sales. capacity be reduction of earlier Hasbro higher increased resulted Freight as a dollars a the year. sales in both to limited including of favorable in percentage all costs overall

initial to We includes more have higher transportation our at managing freight This plan. been a using the impact. minimize actively than air cost

freight addition metal material In resin, packaging companies, significant prices. to have most costs, higher seen and increases other in we, like

such in trends are recent but accelerated vendors, cost We our pressures the with have months. proactively mitigating

at bonus with increased Products due declines warehousing at were along increased segment. compensation cost from We advertising spending higher Consumer lower initiatives. spend of XX Advertising in gaming theatrical investments. recently ongoing on driven for included but several costs. to in digital customers’ points increases reflecting by declines have launches We by promotional our the advertising and products toy partially to support games to release of further scheduled integration higher this offset savings additional game in costs input covered was Product and the quarter. this gaming and freight Hasbro higher this for development Wizards of release the year-to-date, increase communicated for help and stock mobile increased price lack future Arena year, basis mitigate first phased periods. SD&A with and eOne releases digital slated Magic games expense,

quarter, approximately business we a value pre-tax expected This anticipate to During second from music loss million transaction million to non-cash, recording at allocated $XXX on amount costs. sale. $XXX the the purchase, eOne of the includes the based

that This $X.XX excluding first Adjusting tax million tax income was tax be approximately gain, law, gain, legal realized from or slightly the currently year. first was the net lower The million. of was we $XX.X year-over-year. the eOne $XX.X this in Other slightly settlement for quarter quarter higher, underlying other income, of share, includes a rate per or enacted a our XX% for and expect intangible. underlying based XX.X% acquisition to XXXX rate on amortization

the the the how deliver health, plan with well-being us of strong positions deliver to the quality and continued We The are our pandemic very of for of team first has impacts results managing the employees. the while it business year. ongoing quarter safety for to our the to pleased navigate and

compelling I stories, our to continue to bring your and and continue innovating, drive take to experiences happy continue in are XXXX the are now beyond. business together in creating questions. people place plans telling Our that and Brian

Operator

And from with our line Sachs. Instructions] you. of your [Operator proceed Goldman first question you. Please Ng Mike question. with Thank comes Thank the

Mike Ng

for two. morning. have I Great. Thank much just you the very and good question,

expectations First, at your sense in bit very a EBIT TV major about the for you shows that you Thank deliveries are half? the could talk much. quarter, full little for the of contributors could then about current that the happening margin you more the second be margins bigger And Any eOne revenue? should in second, year? given to performance talk strong

Brian Goldner

Mike. morning, Good Sure.

for that first we’re throughout Summer, as of just question, deliveries prepared about a The series and On beginning talked are remarks. TV films. that launched seeing including the as array deliveries, we an We of production in Rookie, a which our we’re Freeform, increasing of those eOne well couple on Cruel number on the year. really And films television

we fact, same, And for growth the grow year expect In should on to in film by that revenue digits television to is levels we’ve talking been and remains XXXX. return that back saw in the we expectation full which see our QX, revenues the and double Entertainment business the the about.

take that, in As seeing long-term beyond we the we term, the hold. really clearly IP longer believe the at Hasbro continued of eOne’s and move we we’re look over business plans, growth begin as to

We’ve In film, RANGERS, Netflix. shortly. we’ll film have going comes very that series about to TV both LITTLE a PONY. out feature animated and fact, This months the in production planned few MY talk film on got CG & preproduction platform we September in both and we’re TRANSFORMERS right DUNGEONS next now, D&D, the film. on with the already on television of a launch DRAGONS POWER

will future brand on creative coming be also period. some great in We like a a that have Risk stewards

under continue better. protocols and XXXX do very in we We for developed as being So use continues we those feel situation the and believe business well Hasbro IPs to and films the good dissipate about are get production. the right now, television the beyond. actively But to COVID will Entertainment

Deb Thomas

And point, outlook. smaller we don’t quarter as our the I a see that first is mean, generally changes far margins, this EBIT quarter. At full-year anything as our

Gaming Our entertainment. Consumer Brian it’s talked in have whether and been demand in positive trends and and Digital about just strong, Products has we business,

But that us can growth it, So, level price of but and pronounced months. and support has we’re our half into increases our can has double-digit well helped past We that, with around year’s we’re freight And can those continue February, margins the costs, segment for that year. cost operating together. impact line help over to we’re suppliers plans in for said year, become including deliver Demand several the second and we deliver the – we in it do working in last confident targeting all as XX%. have input of the of revenue actively as and been strong mitigate to the for place customers. vendors, more increases with adjusted

So this we level show in be of line adjusted plans should that full margins for with to XX%. last year’s around operating year, continue our

Mike Ng

you, Thank Deb. Thank Great. Brian. you,

Brian Goldner

Thanks.

Operator

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

Eric Handler

business, NFT then what of you color sense representation downloads game a it’s product secondly, mobile it of very many particularly you the is like good launch. could occurred, the there maybe have much you and have you And the moment, little And just looks could – bit little talk NFTs. Arena about new the players? potentially the lot business? video about talk you consumer a there about if that the business might global hot funnel much thought Thank bit GATHERING a of how and give given collectible in expanding THE MAGIC: out Maybe Wonder make how at morning. much

Brian Goldner

Sure.

bit and talking by start Wizards me about and Gaming, Arena. begin with we’ll Let Digital a Magic

full gameplay the up versus The XX% an March seen acceleration the on both to end Android really hour a at at back is to launch. It’s about nine just first billion in now mobile quarter of the beginning week per week. in XX. the per Magic ago, have now collectively year for Arena and X.X We of average at available since seen is We trending quarter. launch the and Arena where played iOS, the we’ve hours and use games went

launching are As a around great you Kaldheim. and card the know, MAGIC that And also saw array of sets simultaneously analog whole quarter in success we first we’re digital. for really

the that In Spiral winter quarter, of successful. February biggest was that which very set early was Time is launch, for all the in and fact, MAGIC, time was also and also

we up fact, in THE world brand-new we’ll just Magic then forward GATHERING; lot the QX’s around is on business, brand. quarter, launching of that big iOS release really Arena Android, another June, in XXrd, now second and As be entering MAGIC: on excitement now in there’s will move we come which the card will a for Strixhaven, for April, with release by Horizons, coming a new that. July, the Modern and have drive both And

of So, seeing acceleration really downloads. we’re an

it’s translated better to enjoying or for as at a it’s we’ll and good monitor play, look MAGIC us. continue to format, had NFT The the even fact, what is business. than to and the mobile real accelerating opportunity appears In are anticipated. well be People team very an the really

it’s brands, operate team multiple And know, demographic effort leading Coast. TRANSFORMERS levels, brands or the we have out West you and on so our we D&D whether brands MAGIC that many of As that’s G.I. Joe. the have really a like

that around do move we and arms it as about and multiple as our we see hear But have NFT and We you’ll are see here, our actively side, more opportunity we the this forward. developing substantial. opportunities on

Eric Handler

very you Thank much.

Operator

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

Steph Wissink

everyone. you. Thank Good morning,

Brian Goldner

morning. Good

Steph Wissink

you. for of I one Deb, just had a questions. this couple housekeeping is

your expense be QX quarter. is Wizards going mentioned and, more quarters to future that remarks to going Brian, you was biggest you significantly think the cadence some think, mentioned impact in I on I

And us we’re pro think or of comment can of help XXXX year, be QX quarter? business about make to balance Just can help on the Wizards to cadence us sure you. level through and as about business. QX and then, to kind on puts think I versus going the for growing QX? and want Brian, takes by lower that just Thank that if we the quarters Entertainment the there and higher rata through wondering you is hoping you thinking up the back – expenses the your some in the think year revenues

Brian Goldner

Sure.

I’ll So, Deb I’ll question. start, then and let your comment on

So, in. the look throughout said our to and at we we’re come see deliveries as we year, eOne really QX, we’ve seeing expect growth,

multiple very double-digit across us the gets platforms mix. we think that And shows whether productions. QX, year, I growth, come mention that executed for we’ll in for in then will or and The QX, of IP in accelerate But of place the under see increasingly, Hasbro first how full the number many but have didn’t quarter that also QX get are XXXX. additional Hasbro comes delivered episodes unscripted deliveries sales. into a again, robust a and IP There’s revenue we teams way. certain plan

And feel all we business. be a that were about quarter to against we And Day that QX had those the receiving revenues, that us. revenues as given also Investor just it ago, of and still up big our theatrical a call. very that so be conference in in for we very And this as had happened along first would said year. timing we in mentioned good our quarter well closures, clearly, theatrical We year

that entertaining movies array a excellent upcoming very in and an developing Hasbro really job shows and doing engaged the of the whole for again, marketplace. team are IP So delivering is

Deb Thomas

cadence the of quarter us an does As Wizards, you’re current the of will quarter the this our far set the the impact Wizards. the that it’s nature year year-over-year expectation biggest expectation varying Steph, release cadence second gives as right, for of be it’s the for really the year, releases year trends. the shipments And of anyway,

timing QX QX forward logistical spring strength the and last releases. of last well because there very in of issues, pulled – is The be they the set of of year. obviously, had avoid QX this year to of year but they comp some revenues momentum will So, versus COVID

don’t So second second side, that, have the with game gives of incremental the digital other of quarter the us higher in that’s on comp being which the some kind launches quarters. what quarter, belief than the a

And depreciation on we time. so time to we as ramps, that fluctuates that can business, it back and that see the goes if that from with And the digital will look revenue, have that.

to – year expense XX.X% have we that see Arena be operating a continue to have for we of Arena, developed. why while digital levels started that believe with that line mobile, to the bit we profit full year. being to ramping is in the in And quarter, some the first started the more that’s expected those last XXXX margin than segment had So you’ll more year full games of versus XX.X% with we

Steph Wissink

Very helpful. you. Thank

Operator

question. Our with line next question with your comes from the of David Beckel Berenberg Capital. proceed Please

David Beckel

I a I questions. lot thanks if could. have two, the Hey, for

growth MAGIC growth, in of quarter. or you I’m capable impressive holistic I guess obviously, picture of from sets in Arena you if have do the and question. Arena a first base, expand that the curious, the That’s market – mobile on whether if you or not further just my tabletop of to really the specifically is one, general, player of more expect market actually the giving curious or I’m expense First coming data you’re expanding your base. base? at

Brian Goldner

Yes. Sure.

in been expanding. The So right. effort. accelerating It’s in Arena Magic had that you’re fact, historically

their incredibly play well. gaming shops in incredibly favorite shops remind has let can’t tabletop get to and you performed the local local together or performing is the game. locally tabletop hobby people while fact, well And business the analog In me analog that

hobby curbside we about would begin But people this be expect do to and together those see enabling tailwind In the begin global that if a foster that’s as kind capability and sets either on to ago, today, can fact, capabilities additional shops, get we’ve you and when about an of of really business participate. local to fulfill hobby and for back XX%, would XX% have to shops that And year shops looked and building reopen or releases to you over starting tried some markets card to help we’re analog again. had seen well at hobby the e-com. some pickup

able with major to gamers so along also to the how to gamer’s And to learn passion individual time. being new MAGIC obviously people a opportunity contributor People the an that’s to invited game. get to and come share all play continue is and to play the

people expansive. Magic not yes, reconnect in fact, Arena never or and then allowing at it’s there And is distance be who been be able play no So No, neighborhood. family to is friends cannibalization. their able had before with a just in to necessarily

a net all positive. So

David Beckel

And question a Can on from that just a you and proceed benefit. will helpful. the – a the a Can realize And amount really more maybe housekeeping be us you I for there’s of impact what divestiture for deal? – at full like the nature. the That’s year tax also was net give it sold in deal. basis? financial on Music loss the then

Brian Goldner

Yes.

in sold was paid a fact, what it. far fact, the sold for the had multiple business So we business in a at over loss. We, not on basis

eOne, was the as – to values in So late and television, certain music, business, film, back XXXX. before goodwill, of we were we we certain assigned or that acquiring obviously, elements other

want we for good a loss, basis, don’t book result very from acquisition, a Deb. was, proceeds I comes far sale. it if of we but a there’s what book the to of that that just loss the paid comment, feel you it. ahead multiple know as received so the we a And true-up about And on

Deb Thomas

on as As not to the full it’s material. be expected far year, impact the

to million would – in point to material we and expect $XX $XX approximately of XXXX. close revenues As it that or the million reduce profit, expect so the second the early the million by not late we in to operating said, in in quarter. quarter second maybe third $XX $XX We million half would quarter, the at second deal in

David Beckel

so Thanks much. Great.

Operator

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

Arpine Kocharyan

COVID helped sort into do if board, could quick year? thanks what morning by now QX POS. boost doing was question. I last on But was POS and the on tough from we’re Good taking across that for somewhat very strong is then have you of a And April, comment pretty comping follow-up. color my – have wondering you any comparisons I Easter.

Brian Goldner

if accelerated we hit what bit the we’ve business, games COVID and our was is obviously, games at up so Obviously, then the finished ago, I really a quarter described And week business until look year X% you XX games remarks, continued a up this minus seen and where XX%. POS. strength. Well, Sure. the in in at

However, versus XXXX the underlying pre-COVID still XX% period this POS during up is level.

seeing we’re demand. So, robust still that gaming

has up incredibly Secondly, this digits and our – been POS post toy through period QX. strong for business double

Massachusetts time The being this retailers can actually had a from where for supply to weeks. ago, year is games Ireland we POS important that’s other of been whereas was really in had as the thing that our and note product factories generated hand eight period a is on inventories closed

coming from demand. We now was it able So, to And a more be than ability product supply weren’t supply disruptions strong to on good during unable to POS, were able chain us QX we year. really inventories our supply to replenish. to Despite similarly, supply had year hand ago. last caused

So, we’re shipments demand comment early up well our from shape on, from And seeing perspective. perspective. also I’ll a quite QX

Franchise continued seeing in North has strength really really around franchise around the America, the our product are QX In Brands grew XX%. categories. We in Growth world. been robust brands

several first and our strong numbers in whole in for of We’re was our e-com up Partner continuing seeing Brands innovative even the that’s array was with incredibly new a as Princess Disney up the with more brands. really XX% POS team launched POS grow, XX% quarter than first higher products. quarter, has the

in going on year the ago, a So a is very ability that. executing evident, be bit QX of comparison again, POS product and we’re compared demand to to supply it’s but against as real on strange to a

Arpine Kocharyan

changed Thank vertically just helpful. a the the second you. super integrate your quick year? Have expectations follow-up. all then And Peppa what volume at and of of sort PJ half you could That’s for under in

Brian Goldner

No.

in say confident. don’t the line In the coming, product a an with confident global inventive and Season and I selling proceeding. cute new all of working of give of inventive. and of we’re play an fact, and I just including whole done to it’s fans, that And around our family so as anything really States new a to United have even content or teams away product. more trip the but array X There’s is lot really would and the patterns. want job Peppa retailers a really The of to for incredible

PJ So around and Peppa no, SKUs as have products accelerate year each holiday XX in good. this well. very we in that feel to new have both will we’ll continue and then as XXXX coming we

Arpine Kocharyan

you very Thank much.

Operator

with is JPMorgan. with of line your Please from proceed Zakaria question Tami question. the next Our

Tami Zakaria

my thank for question. so taking Hi, much you first

about be advertising question first year, line we how And quarter my the still X.X% year? rest the So do you expect light? think for to first was is, given X% should to the for of the expense this

Deb Thomas

Tami. morning, good Hi,

of year was those I and to because Digital level. had X% promoting theatrical expect because we in segments. of Products X% were was that in the out we had be to advertising and It those do light quarter, not entertainment Gaming think the revenue having because ago and increased advertising we not launches first Wizards of a particular around really still Consumer lines. It that when we right

why that’s a of X% basis, X% we for expect impact. range. full you’re the really But to in be to So year revenue that seeing still

Tami Zakaria

given along lines, the to Got production in helpful. about or have consumers? be And lower got continue rest – the your amortization, trend year of same first for clients quarter. cost of points very think price deleverage Do XXX you X% you of cost it. it. your That’s should excluding I X%, basis to the expect increases to sales, announced saw then it that the

Deb Thomas

Yes.

well And as our they the correct, seeing as to So the increase and that in you’re to the absorb but become costs, have mitigate able do quarter. in more we’ve today, pronounced. increases see first addition been But product we freight to prices. in that did have you’re there impact, we efforts,

in the help of those to mitigate second rising year costs. half In the fact,

do those be of present. able So increases we now, mitigate that as blending we right at all with should of expect that, to together,

Tami Zakaria

it. Got

headwind is sort probably be first and year. better the we the really about So Is highest quarter you of of get should saw, the it it? throughout the thinking trough. that That’s should rest how the

Deb Thomas

but pressures, to the I of the second continued half price we increases year. mitigate think plans in have with seeing we’re

Tami Zakaria

it. Got

very That’s you much. helpful. Okay. Thank so

Operator

Thank you.

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

Drew Crum

then relates as insight around season this on consumer this to year? a in anticipating press Okay. separately Deb, Brian, retailers? seemed the you a little into deleveraging return of of Music any much Thanks. last year Thanks. behavior Are or you have It detail more that? Good similar how morning, retailers part products, release holiday accelerate last night, for with to the it sale start guys. do are we shape pre-COVID-XX earlier business. plans the the you And mentioned year. do you to to the shopping give planning Can

Brian Goldner

– demand strong around we’re U.S. in the Consumer What to in Sure. around seeing the see return a America and and region really great to in it’s including every world, we to very growth the in growth Latin business, were Pacific in for world the real Products the the in growth Asia Europe, addition

across important robust clear we As are increases important to we’re that and consumer. important that our again this – retail. to look growth plans, categories The our business sales these really retailers’ are increasingly the seeing it’s at are

see, and summertime. promotional already to that windows those and will few windows we then going in at lining A a of the kinds up around beginning QX. big occur we’re of occurring our is promotional of big believe, of what plans the So, very opportunities retailers, additional number major

say the and would we’re begin at QX, retailers. that major but from several big also for I so windows that it’s multiple seeing really during different early of categories promotional continue So And will and period. best holiday accelerate our retailing

Deb Thomas

the we the to said, we the third late early in perhaps as the close quarter to net the and far as de-lever. And in anticipate quarter, Right. deal second using proceeds, as expect proceeds do we

prepay As we will – likely you of or structured expectation could thereafter. we no the you around with shortly at that we recall, something it the is so our eOne frame debt deal, time penalties. components that several will see And

Drew Crum

Got guys. it. Thanks,

Operator

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

Gerrick Johnson

be Good morning. have two promise I quick. Thank to questions. you. I

Where is down inventory much follow-up, mentioned And I up, that retail and in why? most was a markets. by then First, and you it have please. how

Brian Goldner

year we bit have increasing inventory Sure. or a slightly demand line is where it’s But And ago these business. say, very of Retail a inventory sales. overall, below. either small a increases. it’s kind games little very, our bit little with is business, are and and in Wizards our up would up in I just with

Gerrick Johnson

revenue, were said that grow Okay. Got three still adjusted to just last time it. and adjusted you case? clarify, that segments And to income, all Is operating the expected EBITDA.

Brian Goldner

is. It

team performance execute the us makes quarter in in fact, a to our is very even a more performing at very and In high confident the good first ability level. year, the

provided this about year. confident guidance very feel we yes, So that earlier we the had

Gerrick Johnson

All right. Fantastic. Thank you, Brian.

Operator

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

Fred Wightman

are just result a as I Are overall Brian’s restocking channel in are inventories today follow way of you retail to or comfortable where inventories? you wanted morning. with any Good comments. on seeing up guys. Hey, POS constrained

Brian Goldner

No.

continue the about about sales, e-com inventories. drive think being fact, the weak and I And in good in That’s quarter. will in pretty reflect I the it to – mix omni and up on just that supply feeling XX% think margin. of talked bit we’re little should shift of it a we inventory

continue And year. a of new the throughout so techniques omni while to strong and and continued as lining fulfilling using how us for hone possible use our And and we demand. up in QX, retailers demand flex our efficient just be warehouse channel, lot good space really coming you’re inventories – against still the restock we’re initiatives continuing fact, as online seeing in for to the in

number We initiatives In brands. Joe, coming around across about of gamut couple new Little the new just excited fact, run some films, action really here we talked of year the have our initiatives that and initiatives in of remainder of we’re new Pony. G.I. the of multitude for My new the about coming a the NERF the

And up so lining for major again, inventories initiatives. those those we’re

Fred Wightman

that there change? growth just the could as then a games Is the on And good to we something cause move XXXX year? through that is rate POS, two-year versus XX% expectation that

Brian Goldner

really Yes, got an of are coming. new games the array team’s that

have plans. We really robust

new game really fact, is which well NPD, according the to we have it’s in been already and In the the one year-to-date, received. number marketplace Foosketball,

new in and games number Monopoly several We well. coming of as original games have a new

for XX-week like So during and a a on POS. this the very flip strong games demand of the plans year for good. in eight-, we remains QX really year said, look I bit and for underlying quite have period, plans as obviously, strong the But

Fred Wightman

Great. you. Thank

Operator

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

Devin Brisco

could still and in you Thanks and revenue comps tough like Falcon Partner Disney+ despite through line you given takes you’re given just increased grow talk the puts Could year, grow core for quarter? the – adoption business segment new more Soldier? in with Could to that for the the the Winter and The able Brands, question. your for series full

Brian Goldner

we’ll has as earlier, but Venom. have Chengxi. up. Disney lined very of Princess, be has in Star incredible Well, shipments with also comes we’re in for We’ll growth us. launch I of number business, films to year, to array really the product of in more lot began end it’s well you’re The There’s growth as initiatives from the for Wars now the the Spider-Man in and right. mentioned the QX Soldier Disney+ Eternals, Winter partnership this which later a QX, an increase a a in POS. And year, strong than excitement but Disney and ship a And is of initiative. including XX% and strong product incredible major initiative Company. seeing really some And Marvel then Clearly, Black going Widow new for coming Walt major content Falcon around POS.

the of So, then comes at the year. again the end movie Spider-Man that – and

for driving film we’re a as certainly So against initiatives and three well both major of Disney+ innovation product lot brands, those initiatives. the as

Devin Brisco

Netflix in on how that is get just implications deals deal Sony know deals terms business the and you just in signed Disney, And $X hoping with that and of were and But in combined, to Thanks. billion thoughts was output recently with That’s I eOne, the signed about I Ireland recently deals helpful. related eOne, UK And in investment you’re for to Sky. in really unprecedented. more output thinking future. the which your for potential

Brian Goldner

content Yes. what’s and to incredible to platforms, are that we an across organization partners, a from selling Apple in to risk-mitigated Netflix Well, of the that’s great has in relationships way look, very eOne board any OTT great Amazon been is to building historically with effective been where about number the others.

broadcasters, We the terrestrial have these then, and shows different with around of course, on outlets all and air as of well with the satellite world.

market. look strong how for demand IP great We of continue a to at world-class the in Hasbro it. very There’s put has IP, array we and Hasbro

mentioned, a as developing then audiences TV expect be brand with Rangers a And you’ll brands after of a content it, the to Transformers, multitude partnership year platforms; that be to like been platform. about in Little will but on Paramount. able in on we’ve for working, film around talked that, streaming going we the see I go shortly coming Power more on about on talk and the number another of next will brand, we’re that to We’re starting Netflix new which and our and have the new hear is brands, September; about, series traction My Pony, we

unprecedented spending and our the right, unprecedented era of opportunities. there’s an So a at good with and these eOne an for where brands is at you’re and all that. for look great again, great very position But content expert we company, story, entered desire an really we’ve on

Devin Brisco

you. Thank

Operator

Thank you.

your Our question. Shawn Collins with comes proceed with Citigroup. from line final Please question the of

Shawn Collins

Hi, Thanks. morning. and Deb. Brian Good Great.

Brian Goldner

morning. Good

Deb Thomas

Good morning.

Shawn Collins

more sale on is or XXXX? a Any color acquisition in of given planned that was was business. Music be the deal on had you of healthy sale this multiple, wondering, market? You summer the got eOne an very X.X times I’m opportunistic the the question alternative eOne revenue, would interesting? of just certainly healthy a My this deal before an

Brian Goldner

in Look, the a I’ll we interest Deb we comment from early received business. very on, comment. and of Well, lot let –

team a really that some business if process. robust lot some well, the think music opportunity. labels a number ultimately, positioned we it these a headlines brands they really process. The our for wasn’t really it of interest a interest. they XX are to several number We the in the And As ran well and to supervision the for it during more We’ll music the you from do. all of but than of music them of remember continue had a contemplating this conversation partnership. so different interested as juxtapose around soon was found And we the beginning. sale, of were with with years parties robust our what parties, was work brands, we we right It because of is on good buyer had the and we And very announced, a that eOne again, as a and lot at very had was and process.

Deb Thomas

And Brian for how get company really we focus fit to to driving to the results as Right. Blueprint it’s like elements that this about continue acquisition double-digit continuing expect – said, we the they just on for the us, into our Brand revenue our core year. and strategic of growth

company. is forward look team, we So a to great and and working we place. that go continue business them, a they’re our look growing with music great great a Hasbro We forward in to entertainment as forward, play think

Shawn Collins

you helpful. That’s Great. Thank very much.

Operator

closing I’ll time, to turn back Debbie floor this At for the Hancock you. Thank remarks.

Debbie Hancock

available also the on joining you. website today. The everyone, Thank be our our will Management’s for and following two call prepared you, this approximately remarks be thank call. Thank will hours. posted you, website Rob, on replay in