Hasbro (HAS)

Debbie Hancock Senior Vice President of Investor Relations
Rich Stoddart Interim Chief Executive Officer
Deb Thomas Chief Financial Officer
Chris Cocks President and Chief Operating Officer, Wizards of the Coast & Digital Gaming
Eric Nyman Chief Consumer Officer and Chief Operating Officer, Hasbro Consumer Products
Darren Throop Chief Executive Officer, eOne
Steph Wissink Jefferies
Eric Handler MKM Partners
Arpine Kocharyan UBS
Jaime Katz Morningstar
Fred Whiteman Wolf Research
Gerrick Johnson BMO Capital Markets
Michael Ng Goldman Sachs
Drew Crum Stifel
Alok Patel Berenberg
Call transcript
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Good morning. Welcome to the Hasbro Third Quarter 2021 Earnings Conference Call. At this time, all parties will be in listen-only mode. [Operator Instructions] Today's conference is being recorded.

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

Debbie Hancock

Thank you. Good morning, everyone.

Joining Hasbro's Today, Stoddart, and Rich take me Hasbro's Interim we performance, commentary your providing Chief Rich today on will Executive and the Deb Deb Chief will we Thomas, Officer. Financial begin with questions. then are company's Officer;

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

will measures Our measures, release exclude in today adjusted call discuss of which press these certain reconciliation A GAAP the and non-GAAP is adjustments. presentation. to non-GAAP included

that Our share. EPS, results, to eOne whenever which earnings diluted discussion per with we adjusted earnings our the per on acquisition associated be will exclude outlined are several note release referring we share, based discuss or items in Please today.

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

Rich Stoddart

us and Debbie everyone to Interim Stoddart, you, Thank CEO at Hasbro. today. I'm joining Rich welcome

part even on story, of its true He has potential architected Hasbro on of on share Goldner. for proud eOne it the and a sadness future the in know on many for his our passing moment take to a Brian for today, begin you seeing and potential in was to compelling I strategy, officially leader for a had of now and friend, we who power in years, the into XXX-year-old most seven so company, power Before the work Brian was a and only want Director. untimely an as but Board, beyond the as company where toy an passing. I global growth and felt Lead play believed storytelling I but reflect powerful serve the of game Blueprint last call Independent his road a built an so remarks beloved completely. our recently be team not omnichannel almost in the game content and visionary of with He together changed Brian and transformed He the with more entertainment Hasbro. was the integrated to the CEO, the accomplished the company privilege Hasbro's Brand map and Hasbro, impact taken can family. well he brands. leading

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supply are holiday. the with chain this ensure will products filled expertly managing Hasbro We the be shelves to

year we revenue profit of line three quarter XX%. a believe and segments, double-digit through the margins range adjusted of fourth in will to operating of along approximately with we As the our full in growth with combination result, rate XX% adjusted business deliver in the year's XX%, revenue last grow

on to want CEO. call to touch briefly the a plan the for turning permanent Deb, Before naming I

well-underway. roles. our Our Until provides for group outstanding and leader I of strong working other senior foundation the is individuals management always been of engaged long-term has a up planning actively senior Board am a Hasbro and is team. talented This the for closely in with time, CEO that the executive work making succession naming new for and

Q&A to In the joining Nyman, and portion, me Wizards Eric Throop, of Gaming; of Hasbro Coast and of Chief Deb, President Officer Digital we CEO and for addition Consumer Chris Products; Darren Cocks, COO have today Consumer eOne. COO the of and

Deb. call to Deb? I'll the over turn Now

Deb Thomas

of Brian for of us. Brian positive us, for team the our him. our we employees model everyone. your third these Rich our couple our thank morning, They Brian's of interactions and past strength gaming. Wizards globally, and empowered for tabletop been On many heard shareholders to of behalf with and weeks stepping and Board, in Thank run with like you doing me business all sharing Hasbro's Hasbro The he unique growth impact difficult time unmistakable. together and Good personal would at was up made company. with Hasbro I results. but from and proud that. are, the quarter we'll us Hasbro. memories of of and for you remarking so in on at both have leadership missed, showcased at to Entertainment Brian digital continue executive the We is this is

investing Our results to quarter disruptions as year. and for unlock value full also and Brian of through our strength shareholders. potential believed position create we expertly in Hasbro's global chain manage for growth supply to teams us fourth they and our in the the as for grow do the show

as priorities are sheet and those our total of $XXX.X focus debt, $XXX bringing remain repaid against highlighted Our million million The de-levering an executing quarter we to retired. year-to-date additional on our same of long-term our the we priorities. balance debt

toward we throughout returning following and cash been and the and half was two At goal also billion to hand times paid maintaining which the has eOne two maintained quarter acquisition EBITDA to the We end, our $X.X pandemic. of of our debt our investment-grade target to a on and dividend, rating.

in segment include Entertainment versus were delivered projects loss adjusted for $XX.X well us including full million million PJ the ABC. Netflix, business and PIG, last way of animated content. Dead on with MY $XXX Entertainment last million for year. live scripted and approximately million. the XXX markets; properties XXXX our the continue versus to Showtime; over a in XX% reach spend well the TV, globally Walking full operating of and quarter, in This revenues XX the to action XXXX. coming Fear music development the Apple further over half forma excluding from September, Away The segment the content These MASKS in rookie second for $X.X year, and revenue Hasbro Generation margin, for the film supported the gaining has PEPPA operating THE performance anticipate TV, across grew $XXX years. to for invested revenue quarter, for significant as through range Year-to-date GATHERING, Entertainment developing adjusted MY levels Come PONY, unscripted XX.X% We're year by A X% pro over we've brands the Yellowjackets profit and of MAGIC: or of XX%, international and content $XXX grew an for among gains from profit of PONY: million year. as film, up largest and LITTLE year revenue For animated Finch LITTLE deliveries. New television, for

and Gaming by XXXX, and Yellowjackets, increased For the of our great Goes the Dog Dragons the had the Wizards' the first the became XXXX largest doubling Sand’s deliver business in revenues history goal program expect fourth Rookie plan. end in quarter Dragons revenues. revenue deliveries Gathering the & Realms, and second of our selling Among gains Dungeons gaming of and both releases to quarter, quarter, embrace we only years the launched Magic led additional our with to third growth, the Paris. be Wizards for few adventures Wizards this it's premier premier and and years, quarter Magic co-branded Red films quarter segment all the behind Forgotten and of in this a we and Coast The Harris track its both release set product, July both & episodes quarter, two and tabletop best set. Magic: Big of from of scripted new including summer of to XX%, was on over Clifford: Digital ahead past Mrs. year. XX, its and digital planned of QX the Netflix; in Male, the The Grey Dungeons in and the have a third and It time. significant

It's Arena Importantly, Magic: game. our revenue by are and driving continues were of a new our the Mobile source digital meaningful growth. bolstered releases players, investments their Gathering The in to grow. engagement

Operating Our volume licensed deliver single the support ever month. game Digital in And quarter. higher the the increased gaming most the today, September, for shipped In as shipped well Gaming in approximately business also our and future investments delivered Including year. new increased what X%. reduced brands, unable middle is in challenges strong launches orders global growth these the in development revenues, accomplished digital declined domestically game is of supply the we've in profit during achievement we quarter. products on operating revenue segment through from but the had it last was of increased for we million globe. margin shipments, chain X%. a fulfill we in There as the to revenue profit would we Consumer have $XXX strong third quarter. mix a demand didn't product were the depreciation, majority remarkable of across This with pandemic, of given unprecedented

to took where and ports customers we expanding provide shipping steps working and last closely to capacity, shared continues early to air work an to team amazing and including US, ensure supply declined instances point-of-sale non-stop. activating we risk, we needs, delivery. has The As mid-single digits. China the and inventory in can, certain in on quarter, alternate support our based job mitigate prioritize Global freight with done and using customer

the led increase toy our Transformers and Emerging Rich of in Peppa this revenue grew significant In game the quarter. see Trilogy, driving War auto Within we our improve was Brands July generation fueled significant expect launched effects The our across in-stock Gaming the quarter, demand by of by Netflix, well Masks. spoke continued launches vile we brands, and in levels revenue advertising products, Little on and and product. [ph] revenues our in the As us our gaming Pig franchise a the for of the up, of of chapter portfolio increased in and final My how already improvement. PJ execution, relaunch consumer positions Pony, XX brand. spend to success Cybertron the in demand Hasbro and fan

release We for also Spidey Transformers production RISE Legends base, grew, when including Brand Partner OF partnership Metro Paramount, In BEAST land. and on revenue the theatrical launch Beijing, Marvel Transformers milestone Studios, first-ever celebrated a Transformers for Amazing His THE line supporting with the Marvel and franchise, new summer. products the opened new for themed Universal TRANSFORMERS: Hasbro product next declined, continues Friends. but pre-school portfolio the

support new Rings. of and went million, and Products expenses XXth. toy decreased Operating August in for GHOSTBUSTERS: the in to feature quarter. Studios the increased We and Marvel Price lower release Shang-Chi into higher will Consumer and increases Theater's be film revenue incremental fully The shipping November revenue profit coming the Studios, theatrical for freight expense and mitigate Pictures for launch and also Marvel Ten primary introduced most of the of $XX.X markets the costs. in Blockbusters Disney+ related segment for fourth the with effect August, implemented input The reflecting in from to the products AFTERLIFE line Legend the Series, Sony to costs

sales of gross overall including of amortization, reflected basis Looking XXX program and essentially our declined P&L, This dollars. Hasbro cost cost sales at margin, flat points.

to program points. increased in XXX a an growth of million, amortization and tabletop Wizards promotional expense of of in launches. Given future and LITTLE $XX basis movie of ongoing activity across in game business. entertainment at percent games declined Product development associated digital drove The including $XX revenue. investments robust PONY our favorable and revenue support MY Wizards XXX Advertising innovation commitment advertising mix led cost incremental increased new by and behind million, and sales increase entertainment, the the growth

aggressive for into We more holiday advertising to season, the point-of-sale. drive this quarter this dollars have fourth shifting plans year

higher higher marketing We million, pre-COVID games digital with increased Adjusted freight associated this Despite in for expenses higher a compensation. increased tax flat match SG&A income. capitalized rate as adjusted these depreciation to costs, SG&A expense returns revenue. expenses, year increased as and closely This XX.X% incremental $XX will, reflect of quarter business to mainly change inventory a the the expense; and mix of to includes The continues remained driven compared a by XX.X% availability. with percentage however, underlying rate and sales was is The ago. the levels.

to underlying rate the year at approximately remain continue expect We to full XX%.

Our is sheet balance strong.

a hand as to have And on days end, across In late lower finished to typical year-over-year DSOs days and both compared of are our and reduction XXXX, levels. general, FX. the in position we a volume product addition declined large lanes, revenue and pre-pandemic quarter Inventory but higher in-transit total days, much quarter. were have five than increased to reflecting doubled as transit cash collections lessened XX lanes. times shipping nearly good on absent longer At XX compared In certain debt, slightly goods significantly inventory. of QX times despite transit more all

revenue performance of us we operating our of quarter has third now to and full are to margin in strong Our XX% maintaining growth, approximately double-digit track the expecting year guidance the XX%. for which range on year-to-date adjusted XX% an for and meet

which orders the team. business, range revenue proud our and the factors our results how our I ability upside. chain together out has the could of this showcase high incredibly Despite our of of to obstacles, there to strategy, achieve are supply of the fully end impact come have organization am our year. support many the growth control, We our but strength

to team take questions. Our leadership your happy now is


with we'll Thank is question. your with session. Please question our be line Steph proceed question-and-answer you. this from Thank first conducting Jefferies. of a you. the time, [Operator At coming And Instructions] Wissink

Steph Wissink

by you. of this on call, side saying for really Brian's morning those his Good today. absence us I to has everyone. just voice of Thank start in want the felt

to all a is, terms bit sympathies share question in and really So, you who a can it now, the a from to with his Thank It's characteristics, next think most for the are as you. company? know you. you question the individual we're little privilege and background about him, family. is our about is of type getting of Blueprint, you're that stakeholders search more Rich, which my you for was right the the guide of looking

Rich Stoddart

say Thanks Hasbro, so to touch Brian Steph and lot the thank in he just And have world. for a how much sentiments. people I of appreciate we your you touched didn't that. --

for that and for that doing, it's my underway. the a long-term search remarks, new is always and the the succession provides is as brand about work a greater not will well ever So, Board the go commitment as than CEO, strong to very as Blueprint strategy The is is has naming Board of of is that I in they've the foundation matter is the it say been. that think, been beginning something been forward for permanent think said and responsibility now. belief course, a just CEO Hasbro a process I through. thinking in And of I the

of the a itself in sorry, arrival world. the This point a this use for I departure, you a for not point of of drive to not the -- just what guess saw in this point Hasbro Blueprint say beginning is beginning Blueprint to forward. is departure is -- right of of a is out but not of the arrival potential proving this the right? -- the a point Brian the think company Hasbro, of point -- of say now I it's or quarter I'll

and b, a to and blueprint can who this I fantastic vision forward continue forward. of A, expand drive this think that it on culture leader to leader the the so characteristics are, take someone company a and and believes in who And team this

Steph Wissink

guidance. what's from Deb, put you did operating perspective I'm your the the you a follow-up to as pricing similarly you fourth just on question out for and into few e-mails quarter? this guidance? cost Have taken on conservative I sales the a built a getting morning in could margin a approach target

Deb Thomas

Thanks, Yes. question. appreciate I Steph. the

Now day shelf end our go toys hand I'm thing for meet like, top everything guidance of the got empty. just on of revenue, okay, the Hasbro freight. to And other in the for and absolutely, which fell there for another I'm I'll the pressures as on now. to range is that season. but of feeling we not the place, said, was and brand. going we've we of orders But the be so we're cost with put rest industry have that is some feeling. shelves now. pressures we grocery process this is lot air a in The holiday the supply the place, includes team games It's facing rest has the to will feeling And also are chain the I that went world funny, right store the of the buy something at important

Our expense be quarter in this third fourth don't air and additional intend do typically in to is, to it the take year. higher the price freight increases expect than we it quarter. was We much higher

in what is cover what there is we So to our built have costs.

at double-digit XX% are we guidance firm we our XX%. growth belief can in So overall, still revenue of to hit that

for achieve well. full the end, operating as line profit will And levels be with things We we have orders beyond year can we last but our year that the for in some high believe control.

Steph Wissink

very much. Thank you


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

Eric Handler

about insight able for sort and been is play Good of the on, we Gathering, up impact say, morning. us if that a a balance users Magic: daily question. curious between little bit time maybe a of the little to mobile physical wonder give Thanks The the bit? now let's into you'd had little ramp average to could What's and has play. be revenue I digital -- talk if

Rich Stoddart

Yes. Thanks for question, the Eric.

think reiterate team in know question supports gaming you've is which want the past, neither that tabletop separate. So I I I the what and is really past. that nor ecosystem has to the digital at this an saying gaming been mutually mobile They a been -- these are And cannibalistic in are it. and the poking

So the new I experience. Arena. continuing grow power The omnichannel mobile is we at Magic I'll just increasing of further you users that Maybe And think same a is for to . Magic tabletop is to platform Eric's want what expanded of time, though, source you're And critical on are comment if any as Chris, Arena. the seeing question? ask well. you

Chris Cocks

crossover on mobile to and players tabletop likewise, play, on for who who that. for Rich. a the By tabletop, of contributor XXXX. in strong play it and to users very this come already Magic Thanks, who was Hi, a all had XXXX, overall, board Yes, the magic which in the Sure. migrate to a Magic was business of Mobile year we both healthy in a strong has users has year and see been QX, than more between very had a end source Eric. Arena fact, new very PC. a a terrific want brand, digitally, us. and is record is bigger of major

think of done And has with the and an factors in job our combination user so user. excellent average plus we've segmentation of our per growing the I our those base, engagement been enhancing revenue fans, business our in driving driving terms overall

Eric Handler

know I in-store fully during rebound e-commerce curious that was physical are stores all? follow-up. pandemic, stores sets. a now beneficial an seeing a with sets as are at just you We're number more I'm were Hobby the starting tournaments, reopened. And see closed, oversized Hobby Great. for to physical selling of the

Rich Stoddart

that? take to want you do Chris,

Chris Cocks

prior realities were with only rallied with they the impressed very Hobby sure. Hobby Yes, XX% channel and Yes, about our we of XXXX, how April Great. to the of our partners of pandemic have of stores XX the or XX% online and over side over And offered curb them a months, wares kind of as their we curbside solution. solution now offering any online solution. last

overall our similar Hobby stayed has the so remarkably And mix of overall has grown. business during pandemic. actually

to underlying testament D&D also ability mass of e-commerce different as strong and and foundation Our channel our mixes. grown, is kind partner I those that and have And as business all partners with partners our the MAGIC have business a it's across well grown. the partners both the online like think to

Eric Handler

you very Thank Great. much.


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

Arpine Kocharyan

Thanks our Please were follow-up by very end XX% accept profit less perhaps passing. much. imply saddened be He QX guidance We much top than To Brian's condolences. will question, earlier operating for very on margin. of you. heartfelt missed. Thank would even very

some takes? cadence. chunk card Deb, correct? know, us, sort and it of of But good moving be going my a perhaps quick of But and And are And minutes parts would release Thank few Prime puts already. comps know sort there kind I over answered size a you for could follow-up. could MAGIC spend of I it calculation First, is you like you. a great. if have I that Day

Deb Thomas

Well, inventory, Sure. that we you million quarter at about product just balance was end And retail never that's transit. QX to the at and that XX% as a $XXX inventory, deliver talked lot in been our of the we if delivered. matter QX, most of the mind already inventory look fact, our the about we in talked have from fact, of of a shifted into

we ship can now, here and that. that's So,

So, opportunity. excited about very we're the

have plenty water. things of on the We

continue said, team will and full toys to being the advertising. and going we've talked That actually of about terrific of takes freight sure making are shelves done bit and that products, the very a season. bit the comes We job, air have that for It's games costs more holiday some we the product. to important away use Hasbro that a a also quarter, has consumer that for and

reaching an that effort the well. that sure higher So, the there is will advertising in expense we're the consumer as quarter make POS have in to

which our side, of as the but Entertainment on XXXX have the our because products we Wizards on deliveries the side well. business, good also puts of expect from the we the of costs excellent cost overall the takes, that consumer why XXXX are some more with be to the our than forma of higher some a be in and which bit margin line -- XXXX will we So, going business, some is pressures does Coast mix pro believe gross said

of and our the brought strategy. our advanced all those beauty So of portfolio which things business together, is

line in being said, going businesses three profit also is just that as year there a That And dealing no operating margins have to that XX%. together inherent rest guidance believe our can't that. dealing well in about achieve that world short-term allow are revenue medium-term of us have why we managing reason with we're We're profit operating and that that We ago on our over are that to with work are well. we the way at margins to issues with the growth XX%. some

Arpine Kocharyan

you. volume through problem. Right. you. able Thank what your If you Right. share imports Thank to percentage expect you QX? not, no Are of direct in to go

Deb Thomas

the shelves around we ensure will expect product they ago. with the supply at to we've will business, that our that import them be have is it direct they with say closely I do our chain on immune overall, to issues And well. So need working right similar to world the facing, year a very levels time. as customers the been aren't

a As can example. they partnering them, if fact, can't, containers of get and for we with matter

think down I business different. be in but So from tick import a may a significantly ago, direct not our year overall overall, line,

Arpine Kocharyan

Thank you much. very


of Jaime coming question. the of Morningstar. question line Please Next with Katz from your proceed is

Jaime Katz

get Hi. investment-grade to to three four capital the Good planned, allocation, Thanks. sent you the an back ability condolences the originally than hoping the on investment that of comment and particularly continued can that already to grade. echo But And I'm reduction back to target years? to want have debt there walk now faster to Is been that morning. just team.

Deb Thomas

Thanks, Yes. Jaime.

really company, rating and very along us, worked with the investment-grade of very important It's stepping and know to we've acquisition we're and eOne. our closely after status way. even our maintained So investment-grade an we're the plans agencies that the sure been we've how make proud we're to they

priorities capital same. the are Our allocation really

our own First we and foremost, business. invest in

see Entertainment that in the in You quarter. growth, this

in You in Wizards. the see it growth

innovation consumer You our see it behind all in products the wonderful business.

first. ourselves in believe So investing we do in

for to Hasbro return then committed times lets us getting back excess for cash now, our the And that Beyond trajectory growth right us. and we continuing X keep thirdly, that We investing to has we the believe that on. are to is been the Right to will shareholders. the debt-to-EBITDA. future X.X place that,

We well. of Board have our maintained eOne. maintained even as and We important had the us throughout the to dividend after to our acquisition dividend our That's pandemic.

our to to are been past. it's the So proud we to consistent continue And have way allocation strategy the investment-grade company. be capital we with in be an

Jaime Katz

on you. -- be for cadence sorry, should next aware how target few be then we misspoke. help might any spend through of of there can I grade. that that metric I'm And the us over we Thank programming rather are change? could than think I say meant to cost the leverage idiosyncrasies the quarters investment

Deb Thomas

full the And spend translate probably to still future if year, where from bit the So, spend revenue a high and closer the year know, to this will million you that we're sitting to expect as standpoint, between end, at in year. $XXX a look years. million $XXX for we little this you be

fourth planned a -- and planned And well. as what quarter. for We've year some the bit and you of So, could got some this have we XXXX? about deliveries the Darren, talk little for deliveries great maybe,

Darren Throop

season Yes, Big Yes. November. PEPPA was theaters Moonshine Yellowjackets got Dog X. We've got got coming more The Thanks. the X. coming quarter, product through mentioned, second quarter. PIG Sure, children's Deb. as this We've fourth We've lots to delivery. Rookie of Season in the Clifford: We've for the we've got delivery, deliveries Season animation of Red through deliveries got

activity throughout of we've delivering a producing year. lot that lot of got So, the this we've programming been a

Obviously, content. strong we've Hasbro we we hard on continued production, cadence returning but really working been As roll also on acquisition, since the new see on of XXXX, series, series. into both

and against for I content that also programs brands. there's got the TRANSFORMERS. development, you'll and some portfolio. instance, call, over was TRANSFORMERS, think planned before brands those other developed animated regards, across Hasbro in streams entire it And multiple We've Meaning for film production. coming the got in for entertainment mentioned there's like see feature XX being in a in we've

XXXX deliveries, and strong said, the those year spend see planned but lot a in through as that XXXX. fourth XXXX as supporting coming for investment quarter, And content well. So, Deb looks very to be you'll a very,

Jaime Katz

Thank you.


Fred of Research. Next line with from your Whiteman Please question Wolf question. with proceed the is

Fred Wightman

as more morning. for on viewing to need look in to over about commentary price what your that margin getting just you've follow-up this at dealt trajectory of a shake does wanted good what you few years the a of forward? for back structural? all little How going to guy, far I as year are do the that? we offset And transitory When you medium-term how those Hey think terms Could you over going costs, pricing lot bit with next operating XX%. the to that versus out margin forward? that means input

Deb Thomas

morning Good Fred.

right bit input right, short have world, up I seen last everyone good -- in now. costs whole going We've lately. the been them down period. You're seeing Trends the is think, coming a

the However, line beauty that Consumer -- every product a product our new lot line is of Products is year. single of

continue time. is we to certain our inflation we've seen going engineer for period that can do to the there's believe we cost being So, price product going hit that That to points. said, be of a

That's all a of, could we matter the But expensive, majority our most inflation, And ensure what's components we'll for product line I do -- market that are to made make facing the then think, way right line do industries the we at priced with grocery shelves we and appropriately find a it's we'll in now. the partners it's therefore, product the the of out reinvent our again, right on to opportunity it important. to manufacturing have the most right? store very places. our can more of and of year, ensure Looking it. closely right the was product in I working the this have We've they've bit and that. I'll as go well. -- So, inflationary back got we're to as take what at just every And dealing been cost markets

Fred Wightman

price then fourth in And August, when I consumer specifically if the guess the timing how the be specifically sense. thinking think Makes quarter? in about we product those about margins quarter, of on should hit the we fourth increases

Deb Thomas

the place. escalating when costs fourth we see continue for increases quarter, in we So to price our put from

freight, margins. put about which think that the everyone about just we does chain ocean some cost pressure in you get cost and has of what's some of talked near-term holiday, air and cost right, for and to cost will just place supply additional have. freight the acquiring shipping, So the of channels, the transport and on -- of But

amortization, we line more which of diversified That's we've digital quarter. as side still our business, we deliveries seen margins effect Coast grow. total well the Wizards of overall, XXXX is our will the And of representative think be will believe which business as fourth which price well our includes of gross gross program Entertainment our our than on business as us model full the increases that our But really in margin, impact why our with the the XXXX. Our -- take lets in say, side, XXXX.

Fred Whiteman

Great. Thank you.


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

Gerrick Johnson

in Thank Great. to I and sparing the was definitely you my be he'll morning. you. so Brian missed. toy want of, my Peppa those partner, did Good I'd about well. What Pig like ask profit revenue Goat express as Deb, favorite of condolences and say, a gain net operating net team's PJ and products. Thank to those Masks, bringing the quarter? in-house in terms you. those by in-sourcing gain contribute

Deb Thomas

Gerrick, as sparing for Well, you and been sentiments. favorites you thank appreciate your but everyone's may have you, thank We Brian's well. partner

appreciate So of we much, comments really all all very you. your

started and -- Masks. the we're so thank and Peppa and our here. you, So all meant you us everyone We nice products shipping to you the Peppa Pig thank The sent PJ and and third line about quarter. for for that Peppa that PK Pig excited to world for notes in the

standpoint, on see just a are in shipping Some quarter. to we and now, of here impact in this the supply From But impact the they the expect bigger we those challenges so had third quarter lines. we started did the fourth quarter, way.

have operating that the together And the impact brands. Peppa year the very As we're PJ we've that million, margins would franchise profit and think impact $XX similar said, think for year. full $XX be the total I to on said, our for for and million we we track to for

So you profit margins. low think high XXs teens, operating

that We fully that through great as well. So continue We'll take are next now. ourselves products some brands, business we're licensees doing the licensing lines Because beyond integrated partners we about on external that. really there have our to we and lines. excited year, that are that the consumer have won't

of So PJ and that business. part we're and family. integrated of XXXX, more that are in Peppa most the of integrated we've the successfully excited Hasbro continue We'll really business seeing

Gerrick Johnson

Great. Thank Deb. you,


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

Michael Ng

Thank you question. the for

very or Brian's wondering to condolences the set our rest I for loss. releases team growth? their express if comment outlook for more and like THE was how cadence revenue MAGIC: Hasbro you Coast for my also for bit year, of friends the of talk GATHERING broadly? the on XXXX that impact gaming have of one Thank of the for just could Chris a you Wizards I content And just just you might card question also Deb. and then and on behalf I'd family, to First, and the could little about much.

Rich Stoddart

that? take you don't why Chris,

Chris Cocks

thing. Sure

set seven six in XXXX to we from releases in in XXXX. So, our expanded major number XXXX, of

Midnight upfront Our next QX, is the part in that Crimson Innistrad: Hunt composition. vampire QX. be mentioned set of That's Vow, big theme a based just which and expect we set. timing that twofer but will on we first Innistrad: in Deb growth we in the remarks, will the called release moderated released the QX, as in be And in continued releases think part

taking we returning expect and the Those good on vary comping fan major feel responding gangster set had. segments MAGIC number set quality in the Universes we've play an for Adventures early very Realms, from called in received the a slightly fans continuing like and QX, of release with outside those to set of and new did everything to sets consumers XXXX, the which themes, seven include is that going are they was the expand War about our reactions timing with also including Beyond us IP Capana after, and then how we XXXX. like a it of the bringing D&D the record spring For But MAGIC summer to of theme New classics Forgotten to and for releases Dominaria in which Streets system set in the them. the to releases and of Commagawua old for biggest will initiative, composition. have into based and releases. Brothers our like expansion we've of the formats ever we're It in our summer terms And and we MAGIC exploring QX

good So, reactions balance to our we we feel of the good the XXXX very feel about about initial and year, set the release schedule.

Michael Ng

thoughts Thank all the you for Chris.


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

Drew Crum

Thanks. Hasbro the And and our condolences to team. Brian's family

So, my question guidance. is on the sales

With can for Products were the specifically, forecasting still year, language more mid-single-digits up level? offer at segment is something achievable? you guess for that XX% you the any precision Consumer there more to I XX% the see previously you this is year, is growth

Deb Thomas

this the being place do by really And in our have on impacted segments able get are all in for That that quarter. ports. about things industry shelves to on of That lot our a fourth about mean being some increased put said, ships beyond outside of ports. are we've of talk So, don't side expect why little to all ensure bit holiday? be a the we floating what actually supply Eric, there we product being every you for control. we'll growth that I read the we've said, chain overall,

Eric Nyman

ports to around meet capacity to We We've the of ocean just added mitigation, to highlighting that With warehouses products we're Deb already the do Sure. expanded want contracts We've demand saw customers up headline in world, phasing proud of happening to that's move with QX. around some orders well, the a lost we million are activated China several as Hasbro as that to of our is world. earlier mitigate headwind QX And about our sales. holidays. toys the in the peak much And there carrier increase I to multiple think shifting as our for we majority lost US. want and shipments year. the an be which $XXX to took already as or issue plans the of we which steps trucker QX here We stress. We've peak for from possible shipped games helps of feel to regards and the And during new teams. We the of challenges highlight, to that ready mentioned, I confident deliver over all talked will the lined capacity world. plenty the has to both really not is issue, this that season.

ready appreciate So we're I question. feel go, to we and the

Drew Crum

you. Thank


from is with Alok line proceed question next with your Please of Berenberg. Patel Our the question.

Alok Patel

guys Thanks effect a consumers versus can to the materialized price that of expectations? Hi. some bit the be taking room an question. and little supposed they on some were if there my you was And retailers? in of increases comment for the strong, QX? cost more How to with to on I is wondering pass the up have POS

Rich Stoddart


pricing. say But thing So set the first effect went did August. price we in into right, just -- those the I'd retailers increases is to remember,

the And pricing of so seeing we're that impact in full really QX.

that? add to have I Deb, anything if you So to know don't

Deb Thomas

Yes. agree Rich. I you,

we I think hit it the sets the you don't. The to retailer on actually consumer, price head. the

cost as if season this something as increases retailers running well we to very be disruptive think price our have That in want for to won't the of well. would to their a point we is you difficult, that partners further right? as be XXXX. predictability at like So retail taking about our very So implement company

ultimate there'll consumer holiday games season. the However, and price this buy to consumer, plenty be and they the for toys set the of Hasbro to

Alok Patel

That’s I have. Thanks. Got all you.


the At I'll Thank Hancock we've you. to over our this turn remarks. end call session. question-and-answer for Debbie the closing time, reached of

Debbie Hancock

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

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


concludes conference. today's you. Thank This

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