Hasbro (HAS)

Debbie Hancock Senior Vice President, Investor Relations
Chris Cocks Chief Executive Officer
Deb Thomas Chief Financial Officer
Cynthia Williams President, Wizards of the Coast in Digital Gaming
Darren Throop President & Chief Executive Officer, eOne
Eric Nyman President & Chief Operating Officer
Eric Handler MKM Partners
Arpiné Kocharyan UBS
Mike Ng Goldman Sachs
Megan Alexander JPMorgan
Drew Crum Stifel
Steph Wissink Jefferies
Jaime Katz Morningstar
Fred Wightman Wolfe Research
Gerrick Johnson BMO Capital Markets
Alok Patel Berenberg Capital Markets
Call transcript
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Good morning and welcome to the Hasbro First Quarter 2022 Earnings Conference Call. At this time, all parties will be listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Today’s conference is being recorded.

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

Debbie Hancock

Thank you and good morning everyone.

are Hasbro’s Today, we will Joining and commentary on Chris today Chris your performance, Chief providing Hasbro’s me then company’s Executive and Deb Deb Thomas, will questions. Chief we Officer. take the Financial for begin with Cocks, Cynthia Darren Nyman, CEO join and and Eric Q&A Throop, Hasbro's Officer Williams, and the of President Operating of Wizards the of the of President Coast in Digital Chief President call. Gaming; portion eOne; will Officer;

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

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

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

Chris Cocks

of about the to and leadership business share are undertaking you first the to assess Good our business, our discuss joining QX. year-over-year year $X.XX will growth to team QX, that of we Deb segment. In speak quarterly X% our beginning at direction today music I'm Hasbro. morning. our billion, in performance sold each efforts teams happy view well, year. Thomas revenue Hasbro's the supports last Revenues our grew detail executed for to a and be strategic absent X% which quarter results increase growing the and Hasbro in shortly of

THE our One by Dynasty prior the which year standout set MAGIC: beating set for of is Neon GATHERING is and to the time, ever. fifth Dynasty, our all the largest of XX%. million our set Kamigawa: best-selling $XXX quarter set the is in performers Neon was latest third winner release, of excess generate MAGIC

grew and would Our overall X% Games have even stronger. portfolio been

supply to our chain However, to MAGIC keep we the demand Infinity business. with release, March September help robust moved to for MAGIC up base our

one revenue drove on Dino deliveries from Our And Fury, buoyed the PEPPA on or week; watched LITTLE drove million XX X; Marvel BotBots, top most was Season of entertainment TRANSFORMERS Netflix picked of kids which animated was of consumer which top TV, first excluding markets of last of products kids launched. XX segment Power X% Wars. industry-leading Rangers was up portfolio The shows including the revenue by increase music the and our Rookie, a Star XX%, PONY, the capabilities MY products Hasbro PIG premier all and just growth, series also and a for showed $XX.X growth, in in for which content it film Netflix also year. its and

previously at communicated behind in Digital the Wizards double project continued which growing Gaming now continue single range potential our low to mid-single upper-end we in and we low growth For reach of business, of digits. highly see the full digits strength with growth to our the digits, year, topline profitable the

absent Russia. to growth million and Combined digits, scale, a $XXX CEO, has mid-single continue more would segment on grow over and shareholder drive and a bottom-line of to we fewer, consumer Music the be are Products Entertainment review X, return. we enhanced approximate but we continued a those We'll an to as headwind Games update On profit drive effort business. projected an related basis, in scaling taking with this our segment, the strong Investor with theme absent focusing the to to products reinvestment major in commenced opportunities low expect Day, fulsome team for on mid-single since strategy are We A growth operations. across particularly focus our bigger is are and digits, strategy at when comprehensive opportunities the with in our share profitable single-digit operating of already seeing coupled Consumer identifying scheduling business. enhanced October company, the demand this growth

pleased solid profitable XXXX. outlook based QX, $XX increasing we and report, adjusted starting program operating to range million in meaningful our For XX%, margins we repurchase investment in year's with $XXX a fundamentals will last the the million our resume I'm stock operating are on in XX.X%. for the company, see we target across year, also to profit versus profit a of anticipate improvement our

profit & a $XXX portfolio will a become see end-to-end just brings more cornerstone OP including week, million CAGR DUNGEONS opportunities TV, growing D&D may portfolio, once a of Multi-generational vectors among play Much fan Hasbro, a Hasbro a age the to tie-ins. of a brand We XX% and digital in AAA and brands our with be we our products one & play this which invest of business unlock one enhance consumers growth future of more Last profits of as strategically as consumer powerful operating majority generating rapidly and in asset deal our DRAGONS, also DUNGEONS fastest-growing Beyond as games over addition for see XX%. see that XX The are partnerships. an of important our for play us margin profitable, direct-to-consumer embracing plan significant Hasbro for D&D excess of areas X-year brands. new the a partner Fandom business a XXXX, the work portfolio and XX% year-over-year, nearly D&D D&D games, we collectibles bright In most these play growth generated hub and marketing DRAGONS. billion co-brands. projected to play key growing many brand of As announced our blockbuster blueprint in our new our and the entertainment adds Beyond. across Hasbro push and digital and XX% generates $X.X Hasbro, only streaming is time and part this partner gaming opportunity films company. major It international And an margin connected through the for for the including opportunity business. games & to premier part DUNGEONS we with we million. focus & The DUNGEONS Beyond for direct-to-digital over significant platform review, growing we Brand Blueprint of of big XX. will than the over but in acquire by a and among own in and Beyond important economy, with DRAGONS entertainment IP for great games, of by will our is that multigenerational content It surprise enhanced with expansion, into of DRAGONS, combined video content gaming physical accounts a family excess gaming market value is of agelessness highly digital for growth powerful We exclusive a experiences, us. tie-ins, all digital brand a and new businesses. as and was accelerate.

unlock license this profitable go enhance Our forward further opportunity. will partnerships and

near As fans this Lineup. of product to of ages appeal all sports a Starting fast-growing to approach, are a all sought-after excited and of most of more many Fortnite, and and us come the Warhammer of world, gives of beloved to Jones Starting collectible the including future. partnership line Lineup an to a the time, with Lord the XX,XXX. most in Indiana Fantasy relaunch the in some The example Juggernauts, of Star Wars brands the brands collection announce Marvel, category Starting one exciting collectors Rings the new Disney's of return announcements joins Lineup of in we

supported Our will combines and Hasbro owned to approach by onto evergreen multigenerational strong businesses a they with our partnerships lucrative D&D margin Beyond and launch & also Fanatics a across Hasbro. online operated entertainment our and network of and Combined, growing in platform by Starting engaged of Starting players some and Pulse, Lineup our on profiles opportunity superior the direct-to-consumer and and growth games and investments direct-to-consumer fall, our platform DUNGEONS compelling AAA important both fans. DRAGONS capabilities. most collection represent this enhance D&D blockbuster terrific new Beyond outlook. insights the into appeal, brings to Lineup exclusively largest a great represent IP brand

previous and my Gaming, in his senior days Hasbro's for we of Before closing, repurchase as by been I review Shane focus our multigenerational continued Officer forward announcement new strategy years, the and is we entertainment share focus top joining beginning. opportunities back-end welcome out team in to business drive turn like Supply to COO. which in to and excited our over the and Chain Wizards enhance end January, with across XXXX It's our business, project a Beyond, XXXX. on and same Wizards We platforms including value and Digital growing but enhancing solid continued first and for these Global streamline for SVP operations Officer, expand growth strategic build the these in supply will us Chief have investments games new President invest Azzi of and investments in Lineup and and quarter profitability management to six direct play growth, hope energy and see us in Supply only experience May, chain XXX we reporting pursued the want and a is our our my scale, the Shane's expert opportunities Shane capabilities. Starting Eric CPG our our particularly it at executive leadership and our program. over I'm view the caliber executed and quarters. shareholder a help Hasbro's in Kimberly-Clark we our business little Hasbro our Global D&D Powerhouse, discipline direct past of business, and Nyman, team. our to just In you to new over the since join new consumers games look as only and Chain capabilities a ongoing strength as to coming member clear contributions at Deb, guidance like see punctuated collectible our I was modernize Chief

October. outlook focus our more Our and for to long-term to for scale our The structure, quarter this ahead. our to presentation year shareholder I first like strategy brand and will I'd now comprehensive, the approach our plans management position where the forward to performance to we Hasbro turn and sharing team at in are evaluating details cost be our need about strategy capital and allocation to Deb our review to share and more our priorities, about the Investor over our return. looking success superior Day

Cynthia, up this join follow the where Darren Deb? Eric call. We with and a on Deb and Q&A session I will will

Deb Thomas

good did the Coming a more Chris have disciplined he sharing to delivered fresh everyone. with strong a off the Hasbro start forward Hasbro year solid the opportunities and view XXXX, We're look with of as team Coast, in with by build to year. bolstered morning, and on foundation strengths, a our Chris, as Day. in on to the he's our you at Investor approach to progresses place. and Thanks, rich We looking board, Wizards the a excited at October and to good

categories revenue growth. quarter XX% and currency revenue had flat brand constant portfolio Each grew grew entertainment but on and The was X% and basis. music. TV, film a First X% absent segment grew

grown total games. versus reflecting X% Our the the has last of XX year XX quarters, to connecting in gaming gaming multigenerational of grew power quarter first the last $XXX category through Total million.

XXXX, year category games OP revenue was of excess $X in with an our the in For XX%. margin billion over full total

exchange current in continue capabilities revenue grow full gaming rates, single to the At We digits. investing expect year low leadership. our and we growth

to increased As mid-single cost, we digits growth we've growing scale XX% and focus our our profitable most and fixed our games we building on around tightly can manage largest profit brands, OP and operating guidance achieve portfolio our margin. adjusted believe

Pony and the this gaming flat absent America Pig Europe. due impact costs the of business up. in impact XX% grew inventory $XXX.X and deliveries Little Brands we Marvel in had freight, to in input from in Wars; and by European not FX XXXX were significant with growth. markets. Adjusted profit and a Americas, of cost freight mid-XXXX. operating higher and revenue the sale with the million. the FX. grew partner reflects and a these declined good decreased Adjusted impact revenues X%, and distribution. Rangers in Consumer cost quarter negative high, Latin the Geographically, ship and Star product growth. Due were million declined costs emerging grew freight The down mix and and segment in higher Freight revenues or to brands, a primarily quarter Peppa closures primarily expense. on and product of led input PJ year to Masks, anticipated impacting Absent My experienced due inability and profit COVID-related Franchise in for to. FX guided X% Canada posting negative pressures retail costs and sales product, capitalized of constant FX, declined entertainment and the of primarily of brands, cost the operating Hasbro impact Pacific of Asia FX gross to US, music declined remain $XX.X the including first revenues Higher having a ago slightly Power The million. currency year-end $XX.X and segment profit Products margin. Strength both was XX.X%, revenues

to have Duel price profit of higher as discussed, revenues and Masters digits operating offset increases costs quarter, segment as view in low single we grew and growing in and to X% adjusted support As take margin. our Dragons GATHERING and MAGIC: THE revenue to the effect Gaming contributed quarter the help Coast & improving growth. previously the Digital Wizards Dungeons well second

have the a reflects as exchange Kamigawa grew continued and Gaming & difficult million growth have MAGIC of & Dragons. revenues increased negative $X.X impact. in of launches comparisons more XXXX. We similar launches. Digital and strength do year's on had in last for Dungeons not growth Dungeons This Dragons Tabletop Foreign as the year $X Digital remainder revenues will this well by million.

to over last week, card business, business, XX.X%. increased for X% is freight profit this both deeper we the mentioned, activation, Chris although but XXXX, to acquisition Due from of ongoing investment product costs, costs digital of the including significantly slightly with support in the to costs the and and costs, dilutive a tabletop consumer provides implement advance mid-year. order to acquisition Operating near is associated investments growing Beyond D&D Dungeons announced in March growing to & count our This XXXX or expected This As product coming we brand's $X.X higher term. to in years. and Fandom. business the plans. a platform both increases for segment time, feature to and mitigate input significant head EPS, in stock accretive expect In million long be due higher product transaction future by and to development immaterial, price film printing, Dragons declined

second television, due programming. XXXX. in revenues the increases of slightly to We year, XX.X% full the These to the but offset from first live largely sales increased adjusted margin potentially content expect revenue low double-digit of to from of unscripted mid-single-digit related and and continue scripted X%, operating growth Entertainment million be which the expect by quarter in animated to segment $XX.X now shows revenue resumption touring music in primarily year largest XXXX. were to was higher increased the business, deliveries and quarter the declining

quarter. impact XXXX, Absent reminder, will a grew the As also in the business second XX%. segment comparison XXXX. Negative was sold the music revenue music revenue midyear

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

operating For this million business half in declined business. million Approximately year, the mid-single-digits. and music music revenue over profit XXXX Adjusted by excluding in full segment growth continue the the expect the we $XX.X to absent subsidies deliveries, of remainder due XXXX, the of in and cost to business. this film the COVID-related due decline mix first in was is received particularly of scripted television to the profit the operating quarter $XX.X in lower-margin and

second slightly expected increase the operating quarter, profits profit to to planned period. is the the For in based revenue adjusted is deliveries, on XXXX period music decline to due and expected margin comparable over

the profit be For to year, operating expected high adjusted in the margin is single-digits. full

of P&L, of sales with in revenues gross was overall including program the of margin, XX.X% Hasbro XX.X% Looking and XXXX. net quarter cost compared at first our amortization,

also cost of revenue place, of deliveries, the to year As costs deliveries percentage a revenue lower and in our drove with cost higher percentage consumer on XXXX. point ensures demand and inventory it's mix slightly so have owned with setting in in higher amortization discussed that with best X.X rates, QX, improve of while sales that in can lower amortization. with percentage increase issues slightly ensure the high product at versus XXXX on is mix percent as in year this timing not than a increase than of season on drove Based full the be revenue the segments, available periods. of program a price To QX increases taking X.X a stocks we we we increased full to goods we're hand. percentage holiday and and increased currently in in second full do expected than sold, times of Based freight as of us lets a in as last, be of input advancing expect XXXX to year items of the percentage the slightly program level levels take expected advantage This business line key expected entertainment point our in a of be but QX XXXX. deliveries quarter shipping inventory

demand Additionally, growth hand Historically, and ensure we've behind games right to purchases business, timeframe. XXXX, for product. to the paper December to year-end strong these supply on which we the stock in is Higher and and high-margin have inventory the we continue inventory purchased our growing strategic to have driver we'll acceleration ensure brands. in in investments XX% reflected Gaming in the peaked in paper in in peak XX% we to line. purchases time In inventory July than cost first quarter are expect August our occur this an approximately higher is May XXXX. a balance,

Arena on by expect or have in than Wizards lower as higher business, with both driven water Digital Advertising lower warehousing. of and costs We entertainment the organizations, for sale SG&A our to associated support quarter commercial of music in and of hand and declines increasing with part and on Gaming higher Mobile and the higher and and brand marketing ALLIANCE salary in includes benefits the DARK were XXXX. the launch earlier travel year spend well the freight levels historically. and for sales in in costs as the spend administrative

settlement. income income included year, other In as we a gain was slightly million percentage $X.X million. from gain, full $X.XX a be or quarter to lower XXXX. Other Absent revenue the to a net year-over-year. For of similar first share legal that per the XXXX, $XX.X expect was SG&A

not At balance rate our in the with enacted billion and events due first Based nonrecurring XX% decreased legal The $X.XX the to of and the was earnings which XX% smallest of year, was year $X.XX tax QX, law, supply tax The of In adjusted shift included $X.XX, rate income, continue to a adjusted in XXXX a billion. chain billion continued quarter, year-over-year due to quarter end QX be release. currently compared we to $X.XX historically our in on XX.X% range. balance per combination other MAGIC consistently our full of to first was cash XXXX a the adjusted have to expect share of income. of headwinds, quarter in year-end and low the the impact. settlement of XXXX did the tax rate

months, the than $X of $XXX the shareholders Over dividends. down in million last XX our more in we form paid to and returned billion debt

gross million Given remain our to Hasbro EBITDA achieve of debt half target X.Xx business we sooner. cash adjusted to plan XXXX position X in to We shares $XX million the $XXX of repurchase of on-track and year. this to outlook, second to our or

advanced quarter Our spoke operating accounts the flows I cash revenue. to of Entertainment in and receivable earlier the for reflect inventory related business first our purchasing, to $XXX increase an million

days only were with XX Our COVID QX, entertainment production XXXX, after starting XX DSO in when just was shutdowns. compared to days resume we deliveries

facility, in carries cash was quarter. production of on Our $XXX delivered our of cash largely which the the and costs than which interest and for the was short-term those million financing the and use through is quarter administrative spend flows. past team good lower of funded proceeds included the a first new production Overall,

in on gaming, full slate areas reach strategic growth profit focus our low growth of a single-digit our XX%. revenue guidance in product adjusted for and like momentum for operating expectation coupled give maintaining us confidence margin increasing to the Our robust innovation, discipline, year a strong cost while with entertainment

now questions. happy are take your We to


session Instructions] [Operator time, we be you. a question-and-answer Thank conducting At Thank will you. this

from your MKM Please Partners. will coming line questions. the be Our Handler first question proceed of with Eric with

Eric Handler

for Wonder if thanks chain and of morning bit the little you about question. talk supply could some Good a the issues.

dock -- outside the Shanghai. Specifically, ships right there's talk if container enough there could that's lot there your to with product? you And in is any a how getting views. Wonder ships, about risk just waiting now impacting of of

Chris Cocks

through supply year. situation you for we at in this outlook what to Good for the morning, who first of overall can the to the chain balance I'm Hey, quarter we and have over Eric. that the is this Chris. the going Eric, Eric? turn one look take

Eric Nyman

think, to into We in end quarter at the position start, feel inventories Hey, talk Chris. pivot good about one. the good of because question. where shape our really heading that's, our are the at heart your Eric, of the our year. I'll Thanks, Hasbro balance the about I At inventories of are

Deb knowing good is also of regard in noted good Chris US, chain, about Our as of in the in We a that noted, new strongest Pony bit of pretty Shane retail head our for coming as upfronts, good, like Kimberly-Clark. pretty remind We're the our have noted. as our there. this Obi-Wan up Transformers: joining And with world-class the shape we're are and shape well. point animation as the events Little good Spider-Verse, year. Quality May also going inventories at you in just into in we planning into the Wakanda Hasbro Across inventories supply Wars, My Eric, feel things we're leader Forever, I'll I'd them, back and coming streaming to on half. is Disney+, some from Kenobi, Hasbro note EarthSpark And and in on a their and joining excited Azzi as to Star balance Spider-Man:

Eric Handler

renewed a is a and process? possible. follow-up Hulu, of in just then so but wondering if season. should maybe sell And a XXX give know which the end -- you're close market That for syndication, about are syndication syndicated TV. that up I shaping you to for good market Rookie some position Darren, that next could you on with where year, for how you getting talk off-network episodes if at the to quick congratulations Great. fifth the Darren, on put us should into

Darren Throop

Thanks. Thanks, Yes. sure. Yes, Eric.

There's in really X and resell of The turns to the right get format. trend them get demand viewed news now, really to got of syndication, go back it on market packaged an we've well well. kinds The -- and show to continues Rookie. broadcaster, opportunity into great a from back So when episodes we Really Eric. those all season

course, of some streamers buyers the our biggest as are Of now well. the in right networks

and real a again to for with opportunity well-loved show. go market it's back the group a tap the good So

it's season So good X. see to

Eric Handler

you. Thank Okay.


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

Arpiné Kocharyan

have much. quick ones. Hi. you Thank very two I

supply outlook your you margin outlook everything talk if than like overall, which seems better wondering margin, lower. impressive to know is is going slightly could margin better communicated, was profit on. what is that's it such like is kind operating for offset and higher Wizard It that about So given of, is that seems we what about I overall previously better? chain

Chris Cocks

Well, a Arpiné. mix in positive we continue shift our overall to see revenue mix,

storytelling has is going we our high segment as And a operating our profile. games with range, think, to end that the doing across on top profit we great fantastic cost operating more profit the that can product rate. when profit targeted for of potentially couple double-digit very nice lineup grow year. Our we with we're Wizards, the like that as traditional lineup, growth entertainment of that outlook along talked Eric -- about, adjusted feel some savings organization, the we and raise operating the

Debbie Hancock

Just to as add a bit more detail, Arpiné, just well.

Actually, to in that later year. for well quarter. we'll sets as costs we CP cost this as the in in our hit we increases As our those second start you those THE increase to look GATHERING, they've said and certain quarter, did. would and higher in at come we pressures offset margins see first started, the some in already price of business the first and pressures, gross MAGIC: the cost have Price

balances that high costs we're will So out increased us Chris business as get some well that it focus said, growth as as gaming margin. and to that seeing all of that help covering the

Arpiné Kocharyan

was week And the have inventory of handy? end a adjusted then could I one if given that super a POS you that April. Easter of at include on down And are not curious two if Easter share, That's year-to-date I mentioned POS helpful. it, retail have, do shift. weeks you you numbers in just you first Thank know quick then which at for quarter surprising QX, is you. at while we POS.

Chris Cocks

smallest the POS a traditionally, first quarter. our of still a is we early say quarters. on little it's the for What is, QX Well, readout can full one

the We trends with a see lineup what goes. year following in a POS on quarter like upswing. as the are the that along and fantastic lineup. coming We positive quarters, we have entertainment up improving the great we with exited And

Arpiné Kocharyan

Thank you.


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

Mike Ng

And thanks disclosures about longer growth the to you little separately, digital about a could execute low talk and if term I was you you. little top Hey, Wizards. line just just Wizards? bit double-digit that? to wondering bit the was to versus then, this the factors increased when question are you the talk for potentially achieve mix and against of tabletop I year if swing around for what wondering Thank for could need a reach

Chris Cocks

I'll combination Cynthia MAGIC, our Sure. the President and both I And we will and then segment. strength at a Wizards Williams, year, of we give we and to and at D&D across over those. rest and of it answer, our tabletop balance throughout digital of turn look Wizards, in a very look new When the and see of portfolio. each of the the QX, digital quick

what at in revenues continue And actually the of invest we digital. look pretty our at to buoyant we see looking being and kind heavily we're expectations, mix. as tabletop We so that's above and our growing

video rate. comping last into kind successful kind a mentioned in digital growth late not during game more We're have as we a had those. that out of of in to And also terms of year, her Alliance, we new a year. going D&D last comps. which Dark was on a had for of be upfront, of mature June a of Arena settled came said, couple release has Mobile that Now which very Deb headwinds We

commentary it add. be on two, Cynthia, think on little color going bit growth our to muted. where when segment more balance, to I'll the we we or we look further a going. turn But Wizard is the digital at to over you feel any about good So is

Cynthia Williams

Thanks, Chris. Yes.

I year. Two to sets few quarter, which say have this going our still in we're those be I'd we think, biggest be year. be a is, six things the releasing additional the of of will will quarter second

Beyond you'll as likely we've initiatives, identify new into Streets of customer see which system. the will the of to setting MAGIC. expanding that continue the by families. brings New Capenna, which of beyond one of MAGIC for reach from MAGIC urban New seen demon golden Universes new IP Play release age Capenna, And of outside five formats us You've play a mob with announced segments Players number is and the our of Streets and expand

summer We first starting excited in also Forgotten will saw take Realm, with in summer thing we're in set the July. a Adventures card Beyond, time sets success on quite long given which we which record. about select on release that the MAGIC, Universes the a mentioned taking last increase our Deb set effect are D&D price

Chris Cocks

signal being also and And certainly set Kamigawa: Dynasty best-selling be it winter of set XX% the winter's a time. is bullish that us. set I'd best-selling quite all last say And time Neon noted, was of for should the up year-over-year winter all

your If upon a it's of could possible, Mike, us? you had record second half So question. it record. you rearticulate for

Mike Ng

where to of view that get had of the and increasing wondering to key Yes. be? you. just part on mix be you whether becoming you if the see was What tabletop a are drivers long-term want I Thank digital to going mix. mix you versus the it an digital to

Chris Cocks


for growing Wizards growth percentage segments Digital goal with margin don't year, the last year, around We it to digital given specific time. higher say have than be. that see a highly tabletop profitable and both mix we for we would over mix robust stable actually digital, portion the not And that of as should term, slightly mix, see gross I mid being we was some long are of if a table segments. in comps over Both and a what the a fairly mix our So this have. segment

so, And both. growth in we like

Mike Ng

Cynthia. Excellent. Thanks, Thanks, Chris.


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

Megan Alexander

Hi. Thanks much. very

good this the Has Are Just do inventories? in are on in US. where constrained with retail this you at point? you you they're mentioned spring you at still up they inventories. that been bit shape, a about comfortable think channel at point? set of POS a later know follow-up product. arrival I all by know, And I talked all is

Chris Cocks

ahead executed plan. would of I actually Well, QX, in our say, we

that a color it's eOne, like the further lot we great And maintaining great and mentioned, our think and good performance headwinds to Eric year. fantastic despite QX, in partners is just And think feel well to half pretty going of We products. whole about us are execution, with inventory license and the our we at execution is believe as into seeing. which partners we're great products, this a great why any of to so, entertainment going Eric, have from we path growth and story-based market add? QX we're some great our through has second that where and both filled market which as and industry the -- that QX, is superior Disney, lineup guidance, stacked for of we as

Eric Nyman

Megan. Yes. and Thanks Chris

think I have our innovative Spark the including TRANSFORMERS, year. new our Animation the new we bears half year as like a that launching Earth tremendous we're brands for mentioned, support products, where Hasbro it of this retail in of our amount action Chris Megan, support later second Transformer of repeating

which fans. LITTLE a PONY of planned PEPPA And games back Xth. PIG, industry-leading launch that announced is entertainment for as the noted. big about well. consciousness bringing Starting event the we and pop-culture in to have best we're We portfolio Lineup, have And repeating the September for yesterday, Nerf bear which Chris the addition, MY we all thrilled

this Wars Kenobi on have coming Disney+. Star launch big Obi-Wan with up We

Across Love great the all we slate, Thunder, mentioned DUNGEONS Spider-Verse; of Forever, I have DRAGONS of of where and Rise Beast. XXXX, the Thor: Transformers: prior, a inclusive and & lead Spiderman: and As into which Wakanda

I our why think like position. inventory know buildup, that's are we And that that. feel good a So, to for as ready inventories we we're continue our we have in

Megan Alexander

And really just maybe quick helpful. That's one a Deb. for

the modeling. a little for those better Street advertising. was You bit saw in Both should on about where in than we think two came royalties year? the some full lines leverage How and XQ nice

Deb Thomas

royalty PONY year-on-year. mentioned, later expect to standpoint, advertising year. be as a in things that and as all-important on From about more growth terrific always, we down entertainment D&D we the and from holiday LITTLE are But advertising we royalties think I the have, products, in in season. an Eric MAGIC seen growth the -- with our we standpoint, excited happening about we've as the slightly talked MY Hasbro-owned some we is to focused -- on mix

the for during some a say launches one due However, balance of LITTLE to earlier the QX, have earlier that in we year, a Digital The Gaming have that bit different the MY was the and had XXXX advertising we higher it talked launch. thing would entertainment. PONY also I higher we launches about movie because we

launch, of would comp So, we of advertising as higher the in that QX a I slightly been year expect that for based toughest just as that in percent expect on But revenue have well. certainly, we down we the and overall, entertainment, mix the because segment think as be that would to for advertising to for movie quarter think about line year.

Megan Alexander

Thank you. Awesome.


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

Drew Crum

to just looking Hey margin suggested question. thanks. year, morning. guys, good the you Okay, was your recently XX%-plus You Maybe I goal. to on there? expectations the want comment ahead can to go back next

year, Given that then you're year? there I And follow-up. next for view targeting change XX% to a is this any your have

Chris Cocks

midterm a the to always our more year, XX%, you certainly, long-term see outlook. I'm to that and Deb and this bit we're targeting see let goal through little we take where is rise. Well, going for

Deb Thomas

gaming, our multigenerational said we to to believe on the cost guidance absolutely. year. No, our asked could that that that and this question at back detail. constantly. and – in we that And get we great with Sure. at reiterate looking We and play get – year-end, on focus focus scale, XX%. And – we entertainment we'll XX% are really as get We very

we're coming people the We will have that beyond. I we acquisition early coming. a play as Rise are at all DUNGEONS & We XXXX number haven't mean particularly base Beast we In we we of guidance, about year, in Beyond. -- beyond, which and movie excited our we acquisition, that particular, That growth the great said have into but a as coming which who from in TRANSFORMERS: partner look the entertainment and D&D of expect well. that's have us the all and out to that look when expand just what coming. you at XXXX very in Beyond set accretive head the we're level player and we D&D the and would about. base there excited movie It's gives of out be DRAGONS

us. entertainment So, look total and beyond, XXXX ahead excited as for of what about gaming at very have we all we're and we portfolio our have the we

Drew Crum

clarify, potential just mentioned Got you suggesting Russia. relates Are it. you from the million follow-up, potentially in Europe I for terms to Russia changed want view And then Russia, of So, I year? has approximately you understand could of Europe, Thanks. view way? And any it my as risk to to the change excluding later that ship that. want to outlook in Thanks. of your just in is any $XXX year? this this

Deb Thomas

remainder that people shipments paused into we're of on So been size exactly asked Eric, of is to the so our want and that past, we doing. do comment and to And we the quantify the have Russia you we've what for wanted Europe? in business

Eric Nyman


in again, As week-by-week. day-by-day that all we situation all regards think for the in continuing We into shape. rest about a continue in Russia. is of the paused to -- continuing and to quarter specifically, we and clarify improve. we've as to we're Europe, specifically, Deb With good grow to mentioned, for evaluate shipments were just our forward European to that business POS That's and to look Russia business Europe up

Deb Thomas

would is that that – one was The FX. only Euro. would really our currency significantly item just in there's add have impacted two very the I absent And strong year-on-year. business the one out, thing, the this to -- European the currencies we mean, One I us saw quarter, is I point it

just for But impacts down for against I the for impact last have just And dollar business. the is X% more about business stronger the is Coast constant currency other exchange average the a which then rate on could rates, But of basis, Wizards So, I yen significantly one, look from an our well. very our think it's euro, Europe, the us. doing at a year.

Drew Crum

Got it.

Okay. Thanks.


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

Steph Wissink

together. and and We two quick Wizards this Chris everyone. morning, wanted to Deb maybe is for ask ones Good you. on real Thank

through just – margins going the the on QX lower be expected. you the through us have then been sequencing, question margins But incremental QX have difficult on cadence? thinking same the the the quarter. And revenue compare. mentioned to bit side. a largest help has we would is The Just investment costs than think a

think expect just wanted to some and the of you timing investments the through those? you. I to the benefits of when Thank So, of realize

Chris Cocks


it because moving be So to expect out quarter well. the it we've our a quarter be Wizards, QX, release that biggest quarter as better-than-expected we be a even good turned and had was biggest QX quarter despite ever last QX, in Wizards for for to good we to a expect September.

just and of based also think based just that on we comping number on formats that that quality on But to have the we the QX, will releases then the it and favorably the flat be be business a year-over-year well, So for types QX, releases we And another type based down. we significant have. quarter. of comping nature we releasing, the that have. of we to again, expect just and formats will quarter growth likely expect be as of

Deb Thomas

invested as over the past, Gaming we've $X we the and of it's grown look billion in Digital the with business, Wizards over Coast over then respect And XXX%. and investments, to the

We continue long-term about to those talked in talent. make the investments. We've being investments

and Wizards able very continue many, to the great new on us we've to to and that those a that been one Cynthia we with to talent, of She's profitable opportunity, growth. we're the bring Coast, We to of will long-term make today. investments just call excited have have the drive

Steph Wissink

the just guidance that Is correct? acquisition. does Okay. Deb, Wizards D&D well, if include for I clarification not as the could, for

Deb Thomas

D&D Beyond our that is within -- is guidance. acquisition with

partner before. ours a good were they recall, you As of

have from did them. we licensing revenue So

greater an the well. with the to look even we talent our we be that we group. have them came that acquisition as into as future, that as to benefit we And brought However, expect great

Chris Cocks

close acquisition the mid- to in to late expect We QX.

of incorporate into would -- a loaded back guidance XXXX. or integration integration our So And lot and QX. QX would be half then the meaningful

Steph Wissink

you helpful. Thank it. That’s much. Got very


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

Jaime Katz

Thanks morning. good for question. Hi, taking my

learned penetrate total on market broader insight what give First, utilize can of us D&D you of acquisition addressable that to some part a Arena? the Beyond with process in you you your the and might how diligence due

Chris Cocks

when XXXX. Well, in XXXX, D&D Beyond we looked distributor were D&D They acquisition, licensor were the been for late back the were digital exclusive -- we've us. Beyond a since with partnered were they at they founded and we

So platform, we insight base of of value that platform had the the user and a that into it. of lot of growth unique nature on the the

in quarters we've great discussions had in some think we Fandom of discussions. many I into so terms been Wizards family. D&D And for with bringing the Beyond And

had under to a that content vectors the Beyond of Wizards’ We universes a of a a a There's we can to potential are creation MAGIC in accelerating we growth physical exclusive can only new lot well, synergies. MAGIC, really outside D&D brands be can compelling that which system. partnership have thinking tie-ins talked play and And for system we value about think a paired as a the platform primary bringing think see as a content D&D ownership. hub direct for lot or in content IP We've asset. is play of international that into asset platform. team I with lot potential lot and where mutually that. outside lot opportunities about deal of see with then in actual for both our team, of working beyond e-commerce concept of this And a do. and see we Hasbro sides digital Pulse that we Having lot biggest the there's There's in value we got do. our digital with unique

And I important for customers an combination segmentation the like So years, really increasingly of that play connection this upside that over tight think our all approach the couple and to customers million to with last who is think of of learning to getting coming part platform, those opportunity great DRAGONS. March can they it's D&D, important play opportunities film better. who part cap and of want XX on then which fantastic the been with a an as MAGIC a approach become business of purchase great actively going a very -- customers. relationship have where a and XXXX, incremental platform point, what playing your make with well. opportunity we we're in to out our products And with our for our to of and to do how and, I people we've seen us how our understand & XXXX to segmentation business blockbuster product us we are D&D and fantastic learning off, it's going this build It's development DUNGEONS what similar games, Arena, that's the for majority

top team consumer of push that of We Entertainment, then lot have is continue. got anniversary products Products that eOne a the entertainment will XXXX, on a that Consumer & We've in XXth planning. And of XXXX. we'll big streaming tap DRAGONS add gaming and DUNGEONS on our for where momentum

a Beyond vectors we growth So platform see that. for lifts the with and being lot of a to lot of D&D central D&D

Jaime Katz

be And Okay. share there's don't to us, you'd it? That's sure like anything I'm you but comment, I'd curious hear then any Thanks. guys to if about Fox with helpful. have Alta

Debbie Hancock

and on very We're our we're earnings, on to here that. focused comment No.

not Fox on commenting will We be today. Alta

Jaime Katz

Perfect. you Thank guys.


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

Fred Wightman

have the guys, any full updated you slow had growth the decline. outlook? Hey even on industry good expectation quarter, or that year wondering US potentially about if would rate you talked I'm morning. Last the thoughts

Chris Cocks


goes inflation lot Regardless, the in channel coupling fantastic that heck flat, great market licensing view up there's our consumers' geopolitical pocket and of Our focus if partners with books. Having pinching is of there's though, partners a on factors There's execution. innovation, or uncertainty in marketplace of market believe that the headwinds, that's product is out supply with chain right general lot of we overall. continued just and at and the our down or executing the and is There's a now. storytelling scaled play.

can what overall grow market any for underlies believe we year. And in our that so context, we the and that's guidance

Fred Wightman

it in from change cadence? shake getting an in forward revenue the pulled on that gave on balance out that's the actually of see perspective Is or to having retailers, is some Okay. that how we could a perspective and sequencing think bit with a cadence just for potentially little from of the year-over-year basis? conversations inventory do going And based then But that similar year. a detail you us you just you're

Debbie Hancock

I as retailers, selling direct to Eric as year-over-year. think look earlier, directly the very our and we We the mentioned our into coming pattern. have, at that's from similar did as cadence a a retailers business, certainly, their well. really They've water more bit import on is it's got order

they products all that, about be we earlier, last issues to at be the make think sure we and holiday inventory, don't We have bit similar in around held year. great to they may in coming to very this we own very entertainment our year. out-of-stock end season pulling so up but this a a cadence expect want and have having all-important As we

Fred Wightman

sense. guys. Makes Thanks


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

Gerrick Johnson

are good about over positioning. that license with Hey, primary and morning. bear brand going Princess your Getting the the me. Chris, please portfolio. cold, license to talk I Trolls evaluating partner so mentioned competitor. Disney you your want to you're And

licenses? you decision strategic concentrate if about should your that's miss we how Or out? to wondering other your Just a And it IP. on did on partner own think bid to commitment and

Chris Cocks

to opportunities brands, to mix. don't we In or they partner. see co-brands, like about will think as on continued about what great will as our themes Particularly comment those. as dedicated of the any multigenerational license them can in important partner can term investment collectible and lines, think But, call play general, games, of And as be those systems. an play lot bring gaming think part mix. important I'll brands we any systems. we that we line But play of our areas. be and as think that I into specific part a increasingly big we important. or be co-brands those see direct-to-consumer systems as we specific partners across today, our be a about entertainment also you investing continue of play be our in Well, partner we'll particular, Partner And on

think I particularly historically. Monopoly business at and our adept Nerf have our business that been

a the world. sports think platform -- has the a starting I is huge fantastic partnerships for lineup announcement across

on Hasbro of offer I we'll portfolio, we and our And a lineup D&D, focus action fantastic into do area figures collectibles think lot for relationships. gaming with continue to particularly co-branding how a and Pulse lean that. our being that MAGIC across real

partners about games, think so mix. for profit that we -- think see And we that direct, a And, as well. play we we a margin in kind multigenerational growth our when importantly, in see lot of of superior perspective, associated opportunities operating with

Gerrick Johnson

you And Deb, great. Okay, early, mentioned of price you demand increases Thanks. of elasticity but It the be started. already from are seeing have in what might terms consumer?

Deb Thomas

as on we've lot that been what They increased. we now. about about POS cover price and Well, our we product, take don't just we But of thoughtful started, really, And cost. spoke early. increases looking have to the those and just we're it's a very data to

if continue the give lower we product a about now, -- few to and can -- continue value and to price, to paper to stock sure we're change take I'm try that. do We read at you've better card a to consumer Gerrick, allocations. the we engineer Right we it, if allocations things facing can

all have Masters we very in hurt well. product consumer of as have through trying also the of impacting of some not look it, and Duel the very, as Wizards not with acquire to we've business been about Group. don't Coast that we that to But, issues So to price we're and It's and just an the our ourselves, It's thoughtful elasticity MAGIC our not lines. CP D&D taking issue. to so increases

Gerrick Johnson

Sure. All right. you. Thank

Chris Cocks

Feel Gerrick. better,


Thank you.

with Capital Patel Our from Markets. final today of line Berenberg is Alok the question

Alok Patel

price Hey, favorable sales built shift question. or the in headwinds improvement target? cost guys. measures What's to Is driven ask XX% mix? I for the the outweighing margin into target. about that the being a operating Thanks wanted by

Chris Cocks

And then as investments. evaluating that superior we result a operating we're savings seen we've and see cost definitely outlook we're general structure, reinvestment go Well, direct into you opportunities business, back of evaluating our are margin up the games, the some lot everyone on to evaluating to sales entertainment I making opportunities margin our type businesses that. of are And we products think give in for. the I'll driving. A is multigenerational but also play leaning call, a things where I'll themes we're profit and of again, I'll mix, this and thematic. higher it And and open in of that

So, gives the -- when year. we you confidence factors outlook our for take operating those two adjusted play, into us for raising margins profit it in our

And ultimately terms bill costs, of pricing of materials. the both In really to to up most of is at of well point pricing as freight pricing, retailer in of as is cover the terms sale. our outlook

Alok Patel

Got sense. makes you. That

segments Consumer that coast economic an a of becoming the Products? a are quick entertainment, downturn bringing kind company, historically Hasbro? more does another is recessionary, of to how and alter those Just digitalized I compared the it resilient gaming-oriented resilient how guess, in nature way, of which

Chris Cocks

think, spurt out for, And years. XX Coast last XXXX. has that XXXX, the Well, Wizards XX I of grown in growth the started of

as see we being speaking, as we pretty industry toy So, to resilient see headwinds. the resilient. economically a games economic industry generally proven economically And

Alok Patel

that’s had. I okay, you. you. all Thank Got

Chris Cocks



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

Debbie Hancock

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

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


This today's conference. will conclude

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