Hasbro (HAS)

Debbie Hancock Senior Vice President of Investor Relations
Chris Cocks Incoming Chief Executive Officer
Rich Stoddart Interim Chief Executive Officer
Deb Thomas Chief Financial Officer
Eric Nyman Incoming President and Chief Operating Officer
Steph Wissink Jefferies
Eric Handler MKM Partners
Arpine Kocharyan UBS
Drew Crum Stifel
Jaime Katz Morningstar
Gerrick Johnson BMO Capital Markets
Fred Whiteman Wolfe Research
Mike Ng Goldman Sachs
Megan Alexander JPMorgan
Linda Bolton Weiser D.A. Davidson
Alok Patel Berenberg
Call transcript
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Good morning, and welcome to the Hasbro Fourth Quarter and Full Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Today's conference is being recorded.

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

Debbie Hancock

everyone. you, and morning, good Thank

joining Deb Financial President Chris Joining with the Interim performance Nyman, Stoddart, and Rich me Chris, Eric Chief your questions. then Chief Hasbro's Cocks, Officer; Incoming Operating us providing today Officer, Company's are Rich Hasbro's and Chief for commentary will Today, will Officer. we Q&A. Executive and Deb Officer; be Executive we Incoming Thomas, begin take Chief on Hasbro's Hasbro's will

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

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

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

Chris Cocks

the the stakeholders a make later from memories and month people, outpouring and partners so our Hasbro's Hasbro and amazing around special. lifelong well that everyone, to the that is world response childhood testament communities create overwhelmed wishes in of starting into fan The I'm translate this employees, it wonderful favorites. joining cherished positive by announcement. to unique and to company thrilled ability today. brands Thanks, since CEO be this and Debbie, welcome, the as is

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be I'll CEO, with focused team priorities. working As three our long-term on

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play and spans creating age are and together people ranges, omnimedia generation entertainment to generation. that connect is along We passed

is XX% in one games growth, biggest the direct. Hasbro and $X.X and year-over-year growth At publishers world. and new Lastly, games the opportunities, of specifically billion fastest-growing

via time opportunity fans. in to give we passionate it in direct-to-consumer cutting-edge data most reinvent bring our and product to digital amazing customize market an us to for from and and investments analytics Our real learn how them

from want Goldner, our on the care, your be well as Directors, Hasbro Eric who to We'll to thank you we immense and grow value a I'm the these with drive of laser as our nearly and with returning will focus for with we extend with Cynthia Using and maintaining our to he commitment the Rich shareholders. my Brian by particular assets insights squarely cash prioritize the on insight to to allocation, and serving and sharing this time months total next Blueprint the leadership, our underpinned look our how on as from and stakeholders forward of to and these and new will as our focus results. came and natural plans years working return strong years. meantime, growth in loss Rich our assets whole come. debt, our level. to planet the our for executing helped us beloved fan come, ago will we insights in in leader investment-grade a portfolio While I a guide direct-to-consumer Hasbro, to and priorities with be paying a to of Chair fast-growing generates Rich, looking tragic on the board help on be partnering make to Blueprint us brands In business, and excellence as businesses people. Deb, sense end an learning Underlying grow of with Stoddart. Hasbro invest the deliver our Board focus shareholder capital exceptional how rating the more amazing we steady down and take on Board drive purpose strategy, of five about gaming uncommon Darren, leadership special be you Hasbro. meeting quarters after XX engagements strong will while

Rich Stoddart

and of driving XX% both foundation they growth, IP. Entertainment across Blueprint including value the provide past business, across $X.X year business. XX point Wizards the quarter Chris. fourth in in cash and delivering another Hasbro EBITDA strong, margin, our is are adjusted diversified and million team several chain delivering quarter, challenges finished growing proud a revenue in growth the operating improvement supply and our the global our growth The months. basis results the strategy to full set and for assets new I XX% The Throughout adjusted unique very you, we especially above the achieving in maximizing in in Hasbro's and over the Thank team of accomplished record levels of products XXXX fourth Brand the year Deb the operating for franchises $XXX portfolio successfully year, profit Coast, Hasbro year and of the existing flow. our navigated billion consumer all revenue strategic and profitable guidance,

building We and significant MAGIC: investing DRAGONS, DUNGEONS in talented and and & valuable including compelling THE developing the and have audiences brands, around Blueprint, capital in expanding are portfolio, global telling stories teams. GATHERING gaming more growing and powerful deeper our our to

Our is the strategic long diversified capabilities built term investments the This over and our last differentiated profitable in shareholder disciplined commitment has value. performance year. to enhance growth evident to a drive business with

combinations is was led MAGIC's by portfolio $X.X world. and billion face-to-face, Hasbro's and across platforms among THE year First, XXXX of fastest-growing digital tabletop of that profitable MAGIC: GATHERING, gaming portfolio gaming. It's and best a the gaming brands XX%, in ever. biggest, most With grew the

products world-class close years, past tabletop These position we've meaningfully to the growth our the us across are expanding years five best-in-class game to while billion high-margin for talent. and gaming. tabletop in in retaining Over $X and digital revenue investments and capabilities, XXX% invested recruiting drive growth and coming digital creating

We and MAGIC: significant continued been mobile consumer for mobile strategy mobile nine as around continued expansion and segments, Chris are more than and since settled have transitions position for the players average in team the week. a and of In very Digital MAGIC peak expanding a users to launch The relevance to orchestrated with gain. Williams compelling doubling our per has to period on giving high is Chris Cynthia growth invested business excited President month down suite joining to GATHERING their in into users, our MAGIC led engagement way to doubled and of from of favorite the our lead generating for a Gaming product launch to sustained collectability, has hours access growth XX% participate as to the testament durability consistent Wizards CEO increase our of of a digital, its by success. THE maximize at of long-term as Wizards prelaunch tremendous key our in. of fans active The on monthly players across has impressive, from growth strategy, us monthly later and to this team exciting Microsoft has worlds average this of Hasbro. Arena's Coast become

brands the begun the the gaming of capabilities only the license gaming Tabletop digital XX% represents team. gaming the grew the of at piece of revenue, grew potential the unlock of to have XX% segment revenue business, Wizards digital We and and value high-margin including digital the gaming XX% represented for the of total segment. In year. the XXXX, XX% largest of and

the to with across feature the expand toy including this Netflix to digital new marketing products. comprehensive coming & plans upcoming players XXXX, and and set DRAGONS later and tabletop reach full Blueprint. Furthermore, robust MAGIC: leverage significant for of fans. releases, GATHERING sales potential line across in a our This film. the expansive both power these our the theatrical THE special of plan brands Wizards' Hasbro edition of begins DUNGEONS licensed Brand release harness will the and current consumer card and releases a have With and fans games, our We planned to series Blueprint year; organization,

a is blueprint and first licensed PIG and years Led activation. LITTLE map than examples had accelerating in games film recognition We our animated of team leading and revenue toys growth year. PIG consumer multiyear for potential of and of in leverage point Hasbro investment Last more and road opening XX the positioned last double-digit the film in categories. we the Hasbro was these for products growth with of acquired the growth PIG growers toys digits, iconic In still in successful brand the of expertise the of leading opportunity. very brand licensed LITTLE success year share as MY which double through brand. on of weekend, a a powerful content is elevated believe In in brands. licensed game first building with and brand, was fueled merchandise and have the combined innovative year. for in our of strong consumer in Our deep PEPPA the valuable clear the games, and quarters MY PONY powerful many a Hasbro have in-sourced in place as audience through us brand by blueprint we relaunch viewership products team, to to also in reach able XX shifted years reclaim PONY number are engagement. further toy the sale fourth by first franchise New indication brand, eOne PIG a to eOne them and another and PJ to brands the a preschool with launched of we countries It brand and combination lifestyle relevance the top drove and drive come. opportunity of growth PEPPA Kid's the greater-than-XXX% value highlighting around market LITTLE in and ways position to few the its August, MASKS revenue last this was is grow one PEPPA high begin PONY versus And With one we we'll global more of revenue to driving the program, MY gained led preschool The top quarter toys. significant quarter expansive and PEPPA the feature the to this of eOne. brands we for that marked in Generation the Netflix bigger eOne earnings. ahead, the and across reporting year franchise these assets and

animated significant the we We our about brands powerful last year portfolio in with the valuable growth including products Hasbro industry. franchise, As most of the Way Spider-Man Spidey in feature products Partner of revenue entertainment and the No by X% think the Marvel the Spider-Man: brands, activating and support in Partner for Amazing Friends. some Brand film, led grew show portfolio, Brand Home new is His

maintain the quarter franchise our fourth license a We to Wars Star next the are have with product two Hasbro's the grew in celebrated Mandalorian. of extension a the the storage and connection release. with also the Indiana added of Hasbro lines of and of relationship Jones everlasting the Wars, for to season most some strong and revenue for with We Company, Indiana Avengers and with continuing theatrical strong supporting Marvel's recently Marvel, its the product Star franchises of future. new Jones market to last an excited entertainment is products, proud Walt in creator and Wars Marvel's looks Disney Spider-Man line year, year including Star despite announced forward

new in In as Brand bright partners Fortnite and the expanding and future addition, profit to diverse term. for with we to our we Partner mid- long with see as have exciting initiatives higher growth portfolio roadblocks, a

with and of revenues content Maile deliveries, segment Big today very delivering which Dog Clifford divested XXXX levels like the driving platforms. are Yellowjackets, Entertainment including Gray team across Finally, and highlighted had when while and future, return and adjusted music Summer, in business, I've Red a that we entertainment year, eOne the the the shows the during successes above Cruel amazing delivered successful XXXX, compelling several for Finch, film the brands The

on eOne market. be time. continue core, consumers, seen Hasbro across during drive entire and closing, significant with steady want at has family to and continued This business growth in past a that as Deb for especially pipeline the at our we and driving CEO and it position the for center level. honor The production my has value. made purpose have an for making shareholder important are has Blueprint. converted months. the been several been developing and such storytelling the results year's and With brands her leadership at strong incredible roles across investments from we Brand and high leadership. In to team tremendous Hasbro Hasbro pipeline that we've insights on month and will I the to and confident see lights, to releases now response XXXX, a to delivering or over I thank to Chris to started their content excited deep a these on the of Hasbro Deb. to support true over focused turn and am their Importantly, gratitude green into strong Hasbro work In focus brands, activated interim Thomas to an Eric later our Deb? capabilities, their thrive long-term call this take innovation people and growth. I'll our see new under

Deb Thomas

everyone. Good morning,

line said, as to team segments, EBITDA. doubling PEPPA several eOne, for than as Rich the digital we're gaming content an Hasbro brand Wizards proud the incredibly year turn remain This of ever, had geographies. track of growth to operating years by As its size earlier year. EBITDA integration million shareholders, with best our revenue and in achieve dividend XXXX. performance last profit, cash double-digit two X% run PJ across MASKS. Hasbro's and past revenue, hit campaigns increase on our invested today billion on and in We $XXX year end full and the in months including increasingly profitably And the X.Xx Hasbro the well in We the earnings adjusted We brand-led dividend includes and after Hasbro year next We Wizards payment over to in cost returning this the launching of business the furthered our X.Xx portfolio new outstanding anticipated. PIG for the synergies we by term track ending quarterly rate $X of to while grow debt, strengthened billion May. over of announced effective target to to balance with long a by reducing year-end we in $X across sheet, in the X.Xx, And Xx of to the paying debt-to-adjusted in-sourcing year down are grew our cash. over by year.

the and creation value and results XXXX view coming support our to current growth years. over Our year outlook

streaming led grew For for year, MY forma growth, PONY, MAGIC: year-over-year along pro GATHERING, THE the return XXXX. NERF, TRANSFORMERS revenue PIG, Marvel X% and products and year, of and XX%; phenomenal of year Coast with had portfolio production with adjusted XX% in animation. in The segment growing profit versus ending and operating the XX.X%, notably the Wizards deliveries, was a and the Entertainment profit, the PEPPA revenue, Hasbro XX%; year-over-year EBITDA TV, gaming the margin operating digital an higher XX%. by of LITTLE

DUNGEONS and tabletop THE We DRAGONS. MAGIC: by success & GATHERING gaming, digital in have and both led

to Part were product than demand help maintain disruption. freight decline our XX%, to higher our in music resulting full a chain We us business. basis drove year Adjusted the operating XX% due to the for forma have significantly adjusted Adjusted as levels, as sale Adjusted supply more of revenue operating input growth. offset levels significantly lower for expanded pro higher was invested delivered in amortization grew and Asia due operating XXXX increased America margins freight revenues this the deliveries, operating overall XXXX. continuing pricing margin to the markets challenges of year-over-year. X% time, brands incurred offsetting basis, year, a favorable in partially net take challenges costs and strategic or associated of second Family part strategic grew expansion, investing Latin and improved investment cost XXXX XX%. networks the products, costs, a due supply above related higher offset but administrative reported adjusted stock levels segment non-cash, above accelerated included at drive profit pricing, XXX and Robust operating non-operating current profit by in managed the target. year. Products quarter and increased in same have program EBITDA Consumer XX% brands COVID. scheduled in The to actions the and revenues, entertainment. like increased income than increases costs. grew other associated these To Discovery The for Consumer continuation partially at and million the linear expense product our profit content margin growth, grew input a for during profit anticipated segment EBITDA mix demand lower Products chain effect higher industry, charge team of execution higher Hasbro revenue profit point to Entertainment supply costs the segment subscribers. and behind which we price revenue and seen plan, of the on and well supply has changes the chain strong future On to and the exceeding higher adjusted and distribution cable in pandemic offset mix for a XX% pretax and with of Channel. have $XX Overall, with in operating more innovation when costs and advertising revenue

our Hasbro. merchandise programming reducing During per related more channel, over we've year. more revenue billion investment, the XX% Hasbro from XX-year than million on investment in million $XXX to XX% This for Since an to annual of life of recorded than averaging a the $X.X $XX.X million ownership or investment strong our return approximately of has XXXX, income delivered we've non-operating recorded $XXX average.

integration of rate tax. full items absent from planning. items, result of and The of the tax Turning was The and the settlements, tax was year synergies favorable lower discrete from adjusted non-GAAP eOne XX.X%. audit charges underlying to rate, XX.X% discrete

to to not rate XXXX, is an our the absent underlying to XX% approximately adjusted expected the XXXX. charges and as favorable same in For in we XX.X%, of do items with XX% discrete predict we discrete rate, expected range non-GAAP level items, had decline

The balance revenue declining receivable quality. I is business as said at year, Entertainment increased days Accounts year-end XX to days X% collections with strong. had improvement After by another high led and strong. sheet versus remain is declined inventory XX% we our growth very of days international XX Hasbro, our last DSO commercial across X markets. to As start,

year. levels, historical retail hand below on well but than last have levels and higher is inventory the aged are we Our at

to impact product amount to owned retail this of have lead increases fleet both and owned capitalized in higher taking increased in a on in inventory, about costs from These significant times Hasbro are the reflects reflects first price the a average. effect. higher have expected and inventory as on gross transit For negative margin costs. quarter Xx increase inventory China also prior

adjusted reported per $X.XX For XXXX, share. an we of EPS

As you through to I walk about want think XXXX several EPS, items.

gain This of First, reminder, year. XXXX, this comp XXXX, settlement. in a will as in and we per not QX share have a current $XX.X non-operating the quarter million from the to first of a $X.XX translated realized legal in a

would represented we operating of full revenue approximately This share the to Second, in QX the and adjusted of million first year. business sold million in eOne equate $XX.X during year. in on half music the $XX.X $X.XX XXXX, per last profit which

a following fourth the year passing, accelerated share count on for was XXX contractual an of there Finally, equity Diluted weighted to quarter. full increase million full from basis. year million the awards vesting XXX.X XXXX certain XXXX Brian's in average to expected for is approximately

achieved and look we today These innovation, powerful the of we're expect bigger, storytelling adjusted operating single operating to build XXXX. people. range ahead, around is in year $XXX brands profit Coming are XXXX, growth, expected Blueprint. in well EBITDA expansion as in low revenue for our be in line and off more $X.X operating billion in the investments million. we and the Adjusted operating the $XXX investing deliver a capabilities, and profit cash with Brand digits as in to grow As to to in million profit of flow margin in

at grow Looking digital Wizards segment XXXX, gaming segments expect in in in the digits. to our the mid-single we

term. grow We near the to continue over to business high-return and the long invest this

to with but slow the the has The we past that toy to positioned digits to to we growth an and to above-trend margins revenue targeting above single expect XX%. LITTLE growth grown key we the new plans well We decline high XXXX, compound merchandise around partner we're like we industry brand a rate in game map and continue beginning or Marvel operating MASKS, Star PEPPA well-placed the as eOne double grow at brands year Wars. of year, in term, Products blueprint growth in annual and as entertainment believe full years, road medium the a new expect great two supporting initiatives and see campaigns, can segment coming we are PONY the continued from MY acceleration PJ and remain and including through in strategic Over accelerate low content. innovative Consumer through content for and and PIG

rights of Frozen for Disney and very While The Princess our peaking and for Disney Frozen these with in the XXXX, expire Princess and revenue our year business we and relationships million Hasbro, XXXX around approximately Indiana with film. Frozen continuing has last at Marvel, about in averaged per offerings Wars the end for are Star brands. the Disney Jones $XXX excited product

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over grow operating medium digits to high more growth the double term As the low drive EBITDA adjusted expect revenue in single to content, Hasbro-branded expansion. activate in we with and we profit margin to higher

Notably, the for million and Brand accelerate operating Blueprint DRAGONS executed in to revenue and over including development & in a content that Our is content Consumer for planning in of gaming XXXX. million year $XXX DUNGEONS this initiatives feature films significant and cash to the spend are of on deliveries to profit and the expected period. expected support Entertainment, across multiyear $XXX range growth Products, Rise Transformers: Beast we're

in is on segment over on compounding But our part term XXXX, a expect value. strength growth seen the medium have digits annual greater strategy the Blueprint revenue Each of mid-single as we basis. through we its delivers Brand For that has own.

time. billion. grow the financial year-end Importantly, $X capabilities to we margin is expected XXXX, capabilities and profitable shareholder not In long-term to capabilities and built a have differentiated flow benefited combined to reach These closing, long-term enhance operating XX% only approximately investments expect over By business should investments our diversified operating exceed are and beyond, value. to to After in growth year, revenue have but our benefits profit cash track a for XXXX, in and designed high-quality drive under strong of our as brands for with capabilities expansion operating in growth XXXX leverage Brand profitable and building we and profit come. greater Blueprint investments leadership the brands delivering term years and drive to for and the across long XXXX benefit growth further greater positioned team. on a we're growth


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

Steph Wissink

strategy. regarding laid Chris, initiative I'm connect clarification. my to out. the I and from hoping Chris, DTC growth of your one really some then, remarks, just gaming Deb, your prepared Deb you, that have can a question for those question you and number is the three targets

the I think mentioned and was she double-digit low for Wizards expectation high growth. gaming, to single

us component today, of DTC And of us So at any business just much is through the maybe if that? help how remind think the all?

Chris Cocks

traditional kind extension look a historical at adventure coming our on and we digital market, like slate of our our norms, role-playing strategy. well tabletop, tabletop more Well, new business, and to which core games in XXXX both consistent we as that and we've extensions as will continued of into look at be games, is talked past, we the beyond, an robust games staff of digital growth game so with at action categories in as look games, when video

several several be them. sharing a initiatives next putting over more direct-to-consumer in of have drive that of On we and Arena those. through some run to Wizards because an digital be adjudicate significant primarily so, that example direct-to-consumer, variety Company. games the from the been quarters, growth investment means. and a the proprietary payments we expect service of business And direct-to-consumer in we'll we about initiatives significant We across own would details consider Coast those as of our and we've

Product to We on the little which also I'm significantly Nyman, for MAGIC. years we've had last half grown question the has side several to have Consumer which of turn, has Eric? second doing layer talk about going secret a who our what growth. business, also then Pulse, tremendous I can been over think, the And more bit with the over Eric Hasbro

Eric Nyman

Chris. Thanks,

I seen think our you in Pulse the but that We know XXXX. growth. great Hasbro again don't for it amount have Steph, we business, we double did So pulse, disclose

We sharing and we to with have announcements coming forward XXXX, incredible you months. in new those the some upcoming look in

Steph Wissink

Great. you Deb, have onetime go And quarters some then, items your you us won't back to also, wanted in comments help helpful. on to comparability that just I the in Very can recognizing But an in just repeat. think with through about specifically. a like, half was versus that maybe June versus think comparison second the I in half? know quarter semesters, few unusual if first the things how you'd quarters, to XXXX,

our maybe us models. year help just of through for the think this sequencing So

Deb Thomas


absolutely. So

business. me start the Let just with Entertainment

an So on right? from place, I dependent similar Entertainment XXXX you deliveries when that As the know, so standpoint. of to cadence would is take Entertainment

you June big mentioned, quarter. As was a

products initiatives as digital quarter well. was Wizards also, The some and for gaming we the Coast quarter us have big in of consumer and second a very in exciting

until as I and to are quarter. price the I we this for We've as increases difficult really about some take input that cost in standpoint effect of And first think the comps a from our quarter. cover year the capitalized freight us got second high year, costs. don't So think most mentioned, the

So as standpoint, that given think if quarter a And extra GATHERING an to cost from quarter. pressure digital We really third quarter this success about planned is really comp releases launched bit MAGIC: and third first well. standpoint, THE a the the and into and tougher some that we you had it's year, the of have going release. the be that went

table release releases We this had number we We don’t same extra XXXX. digital of have have the that just the in top year.

quarter and comps the first quarter the the comps, year. rest are than of about little third the think I as a bit So, tougher


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

Eric Handler

side if maybe bit a in dig on wonder I the the business again. entertainment Deb, little you of could

in coming animated how As business business we the can and little in going you us breakdown puts the TV maybe like for think from give takes of about growth live-action movies versus much are versus segments? of where sort catalog? And be of coming those the is from a frontline versus to Where is the XXXX, programming?

Deb Thomas

Eric. Sure,

of year anywhere of of business, had we back. the over deliveries, saw in kind a great still theatrical we to As wasn't back pre-pandemic, starting XXXX, look and come the start near it's out to come we but levels

XXXX, moving think we have be as few scheduled into a that delivered. So to deliveries about do we movies are

a be rise obviously, did the Paramount in part in move a It's part from We now. still we into will And in have right our DRAGONS we think that of DUNGEONS year couple Transformers: of one early and the on as the year with eOne later the production & of partners Beast. bigger year. at production XXXX, and we as the

Disney Marvel out be into and well a in as will our -- XXXX partner Wakanda the as our long about those Indiana of Thor; the Disney starting new with XXXX, movie Galaxy Jones and as a So from Wars movies at Star and Dr. moves from as XXXX partners later coming we're fall. in Forever Black course, So in Strange; and for the very our excited excited Spider-Man; at into all moving and then Panther:

as to action business, but have live we distribute our continue So think union. that, we Entertainment about we

We have year. throughout out coming the scripted television or unscripted streaming and

as we similar that of the the And deliveries, will as We're is delivery to think cadence have XXXX, we and LITTLE in from delivery MAGIC: an movie. earlier, continue third a But excited a of dependent GATHERING I THE coming on we about through. standpoint, kind much if we of more quarter reminder, standpoint, being PONY just last PEPPA So we fall. just said to MY And the in about which as for come animated the very why out go had from is from that -- year, the and that have well. PJ. deliveries

of quarter vast countries us. the why think the blip revenue content. done done forward, I MY just the quarter as new we've deal a past in third as PONY year distribute animation From think is, side, particular, robust in of the bit have we road majority did while I some about ahead we a third LITTLE map toughest one year. series a was will the on that library some about from coming think is the probably So a have again, probably probably from The that go standpoint, delivery library to a is of our delivery while of Nordic comp the in sales content the has -- we have library, which

Eric Handler

Gaming years. just had about stripping over that and else Is as and comparisons that is, for follow-up, segment, into think a MONOPOLY, the that's whatever see a And excellent and which last Hasbro segment we you've challenging go MAGIC brands, out the Okay. as growth probably two we'll franchise XXXX?

Chris Cocks


for So question, I Eric. think -- thanks the

a the strong gaming and look, leader. real is extraordinarily been So has portfolio

out, point billion brands at Clearly, As the gaming we growth. powerful we had a to environment. we've XX% And were pointed COVID as we demand in robust $X.X would some some there. got in has you

growing and that upside we're And business, for see very and forward. comps, tough yet business still so going the we


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

Arpine Kocharyan

was quick know what about And of be a Chris, And could more POS I working current wondering I in alluded perhaps a But talk situation? helpful. then And gaming. just inventory look if to with Hasbro. have congrats for you. would retail retail detail forward new We inventory bit sort is industry on follow-up you general you better on to the versus on hand. trends the I of role.

Chris Cocks

Maybe Arpine, the Deb inventory first. question I have will take

Deb Thomas


we and just bit an the mentioned, that capitalized up both costs that's at of as And owned freight standpoint, from inventory in our a year. end the inventory are So and retail inventory. really our that inventory input inventory, was

is in part Products for new releases business. is what's our good transit spring the Now MAGIC Consumer and our for

So, input as and think by it's slightly about being quality impacted it an though higher we costs excellent inventory. is those

Rich Stoddart

summary our presentation. of a the POS, as POS then so relates include in it And did we to opinion

low International want Eric And driver a QX. point take for you growth growth, in-stock was on So America declined. QX up portfolio. headwind in North add for clearly, levels, double-digit maybe single a may digits And games But and POS? ask to back games, full look a just Eric's please was at on year. to to that. double-digit and low the for I POS anything

Eric Nyman

think the the both Rich. some XXX% Arpine, some year. just include LITTLE highlights in double you good the that mentioned, release PONY, more QX digits Deb following MY movie Yes, maybe I'll in for stories Thanks, about Rich like include which if had of highlights. and XXXX, some we grew things than full grew

launches, XXX% Our were which than things year. Marvel QX, and were for and POS, contributed to up TRANSFORMERS' double-digit both And for Joe, in was which theatrical year. POS year. teens up propelled the up growth partnership. we like Deb the mentioned POS Spider-Man, more high how by that was the led which by Marvel for strong GI Ghostbusters had

and the of seeing half brands year in about in Play which for which PEPPA POS like increased. the second started growth shipping really PJ growth PLAY-DOH quarter. Real in talked had and fourth we addition, MASKS, Friends and we And POS started For we the PIG School, the also and In

Arpine Kocharyan

those POS Great. XXXX, do substantially full add operating my the given. for Because get quickly, to the could margin you the XXXX? business in XX% just What Where above year, clearly, was for gaming for hoping XXXX? for question. implied guidance But came that trends. some think Great. you I could color had gaming you for margins initially on business is current

Deb Thomas


expected. So we as did we absolutely, depreciation we the Arpine, launch higher games, see

that long-term talked we As about, we continue growth. for investing

people did -- overall, our margin. Hasbro cost And low-XXs said, margins. is has that. gaming being That gaming look do portfolio profit -- have in that. hiring admin And low-XXs operating high teens, to portfolio gaming reflects at higher total our you the when So our we gaming our

maintain and So And go profit growing, that grow important of that and market, segment digital Chris gaming not but to to margins of games over expected fact revenue forward. come investing as a the some profit expect despite it's segment to margins and have we're gaming as that earlier, at the Coast XXs grow continued pace that and, in we 'XX in we beyond expect we've as -- as greater is operating category our in only been we mentioned XX%. to that our to the low that's is Wizards portfolio we said overall the operating today, why


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

Drew Crum

is are your 'XX remind and the the to then 'XX reduction the this be you plans Xx mentioned aspiration can in non-cash you EBITDA? Will to get Deb, X.Xx Or the debt you just in leverage Channel what debt of the a related multiple And 'XX? to function during us down year? Family adjusted charge separately, the to improved for Discovery taken -- paying quarter.

it make changes, Given your going sense you can And the referenced, this business? cable that, forward? comment industry XX% to does the across to were commitment stake on maintain the

Deb Thomas

the Well, this pay intend down we , debt-to-EBITDA debt question year. yes, first, Thanks Drew. to

our repayment. strategy. through being allocation of as maintain our of growth a capital combination hit EBITDA X.Xx Xx That debt to well expect targets said, We we to as

talked revenue. our business. First and growth in We've how of particularly delivered portfolio, foremost, those have gaming about in XXX% we invest of and in investments, the some above

the to EBITDA debt for investment And about ago. revenue over it significant long now. $X those Company. investments We us. it it air. think, changes projections, to a that it -- Brand a It That on to LITTLE the said, But as well plan Family in XXXX. around so just the paydowns Blueprint -- Discovery how business make had our targets the cable long-term drove It given those Listen, us. in reinvented terrific in a XX It's is for It's drive growth beginning driven think It the been are hit industry. billion made a programming forward. the strategy. investment With us. Blueprint revenue now, targets over there's profitable you happening to growth. of again, continue Channel, years current that's great for We returned a right run it. amount. being of right time. the great get our in investment as combination we going was them And It's respect we'll look really the at well, that's back additional in MY a debt We listen, PONY paydown coming we've for for the allowed in

been great runs to we more a is streaming, charge over the I do things. That to to people what's for going terrific. a we see us, And investment Hasbro being and really a we looking great time. more it's investment moving But said, us we we're in continue it's people quarter. moving non-cash too, around continue with as discovery it. been as their at We'll It's network, function accounting non-op for And of the of way works, a because look what fantastic happening. on network a think it evaluating had great the had all return. different just


of Morningstar. line proceed question. Jaime Our your is next with Please the question with from Katz

Jaime Katz

update can what there see on don't working we a you But that? the capital on this And I give think spending in us that deck. was are on might any changes see you year? as thinking this about capital demand an you year information guys how

Deb Thomas

$XXX year ago. million Sure, in be to about absolutely. changed from And Jamie, from just CapEx is our a XXXX. a $XXX that expectation standpoint, would straight CapEx, it million

XXXX. -- If spend, the is tooling, think tick up XXXX, higher on and game multiyear our in we but a spent and million but from bit programming that's increase to is really in the you a recall, for digital our that's estimates where development really forward, content $XXX But expect I CapEx sit we that's $XXX mentioned majority a coming time. spend. content us to due it's increase we from is usually driven a over From as standpoint, look million

have coming including programming animated new 'XX, past of we lot So look as brands. we new a out

seeing think So year. that about this when you multiyear we're it's a that, spend in

So hopefully, that helps.

Jaime Katz

the should to Okay. I margin, operating outlook about? portfolio It been else thinking lifted Or primarily above for bit. And originally, that's think little and XXXX that Is mix coming for be are of due from? returns there where XX.X% was did. and just is the we then a something the the

Deb Thomas

that great question. see from have product brands, of And we Yes, expect us and of we beyond. to we XXXX that line, XX% a in mix XXXX, over mix and out profit TRANSFORMERS we coming the & that look and movies greater absolutely. portfolio, a DRAGONS. the of we a have No, growth nothing profit a expect on of that based and saying bit getting in think saw mix we our in to to like Indiana Wars margins mix back at And Jones gaming we see I XX%. we about When holding talked Guardians what and When the new our expect about greater been margins. and Star DUNGEONS that's operating expect we operating in franchise than


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

Gerrick Johnson

could Coast more Wizards you in of quarter. bit talk little the a hoping about the was I

gaming You if but discuss on in operating if year-over-year? and decline quarter some margin good so, gave us the to year, the or grew the XX% digital -- gaming detail

Deb Thomas


quarter, what we in of right? operating So the from as the did have depreciation. quarter. kind you're So quarter-on-quarter. seeing And every the in really quarter same, depreciation think margins had Not we margins, we digital is about that's some a

quarter. profit do And margin operating it's very said, want talk you Chris, high still about... a think and I healthy within to the

Chris Cocks


that the when as the expenses of Arena the business within and just of during had related depreciate well incremental has been we Crimson quarter quirks Arena as support to of release also scaling exceeding was So we Vale when we I and continuous mobile. quarter, expectations. capitalize the think some very our an then growth it The strong, advertising

and the to on have positive XXXX long on the it, and outlook for side very both digital side continue We a table on top term beyond.

Gerrick Johnson

was quarter, Legends? depreciation the Magic: related to Was Okay. that

Chris Cocks

done Magic: license a Legends by World. Perfect game was

invest a anything minimum a or part didn't royalties that of We we in development took So and marketing. but weren't guarantee from that.

Deb Thomas

often, digital thing but about saw side was would and depreciation The of the our people very -- don't the business. freight to by and I this input really not side, that in The about other business, games. related think the only but our so impacted just is that issues Wizards Coast the think was cost much we point out tabletop Products the also Consumer

cards business the cards the well. we card of the paperboard And printing a components print, manufacturing about that think standpoint, year from within if look right? growth at highest inventory in of as the we for overall this and components, the freight So our of and

as expect impacted an that to So in the the first other thing quarter. that And bit we impact do was a in us have of quarter well. the

Gerrick Johnson

EPS blew I mean Can away. about bit seemed ask op quick? my the real your the number, but hit taxes little Your quarter. low in your I Great. rate Okay. a tax income

So what And have taxes? did wrong did get in benefit the quarter taxes? a in you on I

Deb Thomas

We have file some we that October we typically, -- adjustments frame. quarter. as did mean, time companies I on items our had discrete do in for the tax returns most do

to items, return in quarter. the discrete the have extent to see we to tend those So provision we

that the in going we impact are As forward. than expect XXXX had of we would from through higher going integration we probably


of Wolfe is question Please the Whiteman Research. The with line with from your proceed Fred question. next

Fred Wightman

on I a could structure you new quick just management the how overview hoping forward. give was going you see

see the where responsibilities of would team to thinking relative on and after You of sort the of today. latest you COO did retirement get John's guys not have the strengths management across a love delegation sort and

Rich Stoddart

Yes, sure.

inheriting and the feel that bringing that on we're management very I board. So I'm fortunate team in both

we most and Williams of mobile most to In lead the I of of of a a the the we future digital in thinking being CEO of developers in our brings Tim recently, the their Amazon, think Amazon with board America great where we partners And in marketing. about one Fulfilled Fields. terms goes. more and who, in on along scale team to helped opportunities on experience and be doing Consumer was have that the hire helping addition a that, course, fantastic a in then, us investments. to finance she including on and production And Relations. Kabam, Fields. game been and team. his more Investor Xbox about business, planning, running who has will expanded relationships across and all about I remit, strategic Eric a our of fantastic Products to strategic Darren the our operational found taking be growing accounting think, think of business of new then lot with helping and successful continue digital global leaders, addition Eric, cloud Tim services. and course, to our great working at then Cynthia Company, by that North on driving sales think as we and of think has job business the Wizards from will COO, of will lot our I experience to opportunities then, by Deb Throop coming run And entertainment best have she of as, the direct augmented have In where business, our unit continue one Cynthia the he'll CFOs continues

We of will have who Sibley, Tarrant Head as our continue Affairs. Legal

of We have joining grow Chief Kathrin new Officer, then organization who and Purpose a talent our Officer the helping within CSR initiatives. from Naj and Atkinson, ESG and our run be this is that Chief Belliveau, we People and drive it. scale we us who have And us will lot Dell, our will have

Fred Wightman

track And on the $XXX just of synergies. clarification, a Deb, eOne were said for Super million you helpful. think you guys I

did incremental of in expecting you that of assumption? Is I think savings previously, were 'XX. those timing sort Or of $XX shift? good million still the a benefits

Deb Thomas

good license as our the our with with in we track else challenges. partners, with little track Fred, really of in-sourcing supply of a still additional the for deal But supply PEPPA forward the a I continued work XXXX. we everything amount a that challenging partners and on million and in terrific we're to some some No, product chain actually, like in-sourcing. $XXX the chain we're license move consumer bit are We PJ. of for is and on for still. we've assumption our had mean And


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

Mike Ng

next you a bit was little I about wondering and talk in of of the years. takes Wizards if the the couple more could business over some just puts

the it's I Specifically, XXXX? are new then digital things year think on to tough a what & DUNGEONS deliver next each the track I And for couple -- deliveries? the creating a Is guys was game. game key are Dark some there years? it of of comps over of Alliance. over think some And DRAGONS D&D you

Rich Stoddart

I'll Mike, this one. Yes. take

after tabletop the what the set on that six, but we our those also a of more side A business, two. of which -- year, releases big growth an you're premier is we XXXX. part So large we function had This releases, of six norm we'll extraordinary big predict call versus MAGIC historically. historical comping last have five are of year,

in the the and So it's more about user base underlying base. growth business

that a digital that owned and which bottle, original or operated older beginning shipped digital be license of then at side we we as Daybreak end -- And sorry, Alliance, by won't QX be to partners online, And an opposed which year. then trading we we've QX, -- GATHERING this model to -- of THE our of last card that the year, converted comping Dark operating the of our is so, the also trading Studios. house, On beginning our will had MAGIC: at game and had QX.

our a have the XXXX work continued expect term, create So, release, one and some least that continue in in new we business, could those foreseeable future. starting Longer to arena to every year two against. headwinds through RPG digital at will growth

in sharing we'll the likely second details the are those of be be releases XXXX. likely then in will release more back XXXX and what on future of half Our year, the half


with your question question. line next Megan comes Alexander Please Our the proceed from JPMorgan. with of

Megan Alexander

hoping you year. more the for the just about full was operating takes margin the I talk on and puts

year, effect. gross as margin the the recoup as some pressure to go pressure before think of kind the You the the of can actions of But we back to freight do you XQ unusual air in spoke ultimately into freight pricing half lap some especially expenses? you get you

Deb Thomas

Yes, absolutely.

for XXXX, it of the we do said, costs still remains just our a year. this expect XX% and reaching with operating excess play, into part coming to pricing we do challenging have margin better of the We not costs of full expect in think, freight XXXX. in we goal As continue in input expansion by but profit XXXX. We challenges environment,

increases the year, the the around play quarter into we're about in season. And out as first quarter the think come very just innovation throughout in the second excited all particular, difficult, but about and price beyond. holiday that is have but and the So new because coming the we that, launches we

Megan Alexander

lap as about in payments in that That's you Great. January? coming maybe maybe then the follow-up, your And could the March stimulus really up and payments expectations talk helpful. POS seen And how April? what inform double you've a lap in a trends bit as does just do little we stimulus

Deb Thomas

Sure, absolutely.

year payments in the has aren't global I innovation toy the because of to incredible of more much lot that's a other away, the to year, when high theater in being online inflation to these people can grow. to in be grow. today an entertainment to we be industry this all-time business see the are you expect to gaming think continue couple And it going I As have right? at a how and a always coming like even above growth ago, inflation. lot we had industry of our milk costs with expect all at is and we muting and going inflation, it, think coming content lot bit we this seeing more guys, expect That's things we industry versus as parts. believe do much mean grow game of entertainment expect things past to as That muted why overall, as of great just year, we year, trend. our gaming mentioned that payments, say really everyone why our is digital toy years, mentioned stimulus as prepared coming how we But continues drive a in and remarks this game a like the look, maybe is lot down. said, going stimulus new which hitting back demand, look earlier, the around table, and costs to we well XXXX industry and demand and a things out and industry of back I you

So that's parts advantage of in blueprint. the our think what market. a us business type And this we working our around distinct benefit that's the of of gives of all together


your Our Please next question. of the with from Weiser D.A. line question Linda is Bolton proceed Davidson. with

Linda Bolton Weiser

your How I of profitability compare at very kind then are business consumer is back longer today. beyond more thinking your what kind is segments trying it's think term. to moderately XX.X% the operating products it of I Was it don't margin peaked was we going Just have products potential higher? does of to consumer the back your And what company just of that's profitability guess where but Products about we XX% today. margin I going much margin today? overall term operating then, margin. roughly when Consumer -- the to longer So around guess higher back XXXX,

Deb Thomas

profit operating margin Sure. Well, continue expanding. to Consumer our Products expect we business

XXXX, in operating whole as a hit beyond, talked we've and about about company a that XXXX business. to expand expect we lot profit And pressures margin that we've I as a in the cost above talked our XX%. think

bit margin faster expansion profit operating in Products beyond. and a in expect Consumer We XXXX

can't I do our to to to continue go business we because many had back as will grow. it whole, XXXX, business our while that business facets So expect time, our the and it's at a

operating be operating levels XXXX, our margin time. As over excess a Products XX% and similar company those in Consumer we'll margin will to profit profit in of expand


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

Alok Patel

about ask Princess to Disney wanted license. the I

revenue it the comment contributing revenue. Wars I is coming think in Deb about portfolio? and Star the was heard contribution of million I that said peak, at the on, $XXX much Marvel Can how you from

Deb Thomas

with it's movie. term peak averaged the did Frozen over we Disney in Princess per that, of license, year say $XXX Frozen the revenue. So million XXXX the And the and of about was

partnership very Company So excited And just all Jones Star the on Disney to for we're excited for that about continue revenue and Indiana Jones. We remain I've the look and years products to Indiana a at bringing it's had out, of about and very we the Marvel continuing many fantastic. we're if with license Wars. ago. with had a opportunity think just some And our standpoint, you

So partnership Disney we're the very with excited about continuing Company. our

about operating that beyond. in those not will move we in But XXXX, say, had and total we've grow the profit to has said our profit specifically in margins. Partner margins high lines mid-single-digit past, have beyond in But as We operating talked is expectation, in low I the Brand our single, profitability would total. portfolio in double-digit XXXX past

Alok Patel


as So one? you of just compares would compare that Wars how follow-up, understanding get a to just -- to Princess purposes. I for Disney this Marvel or the an license Star kind to of changes say comparative favorably just want things the how

Deb Thomas

at into on content different it. you And goes within those each depending what a Each brands, different. license has look creation margin license is profile as

say what portfolios of our we Brand low to expect margins the parts of some single, profit Partner is I and line more of the So other operating double high would beyond, in with XXXX in digits, to our business. expand


you. Thank

the session. the reached to remarks. Hancock for turn closing have now the back end We question-and-answer Debbie over I'll of floor

Debbie Hancock

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


today's concludes conference. This

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