Hasbro (HAS) Morgan Stanley Global Consumer & Retail Conference summary

Business overview and transformation

• Company defines itself as a modern play company, with toys, games, and licensing each representing significant revenue streams.

• Games and toys each account for about 40% of revenue, with licensing making up the remainder.

• The business is simultaneously undergoing transformation in games and a turnaround in toys, focusing on innovation and operational fundamentals.

• Divestiture of the entertainment business and SKU reductions have simplified the portfolio and improved focus.

• Investments in self-published video games and digital experiences are expected to drive future growth.

Operational improvements and innovation

• SKU count in toys reduced by 80%, and inventory levels have been significantly lowered.

• Innovation pipeline is being reshaped to focus on fewer, bigger, better launches, with faster go-to-market processes.

• Design and development now report directly to leadership, accelerating decision-making and product launches.

• Organizational streamlining has combined global brands and commercial teams for efficiency.

• Early signs of improvement are expected to be visible in 2025.

Financial performance and guidance

• Toy business down 20% in the first half, mainly due to SKU reductions and lower closeout volumes.

• Closeout volume reduction created a $100 million top-line headwind but improved margins by $20 million.

• Guidance for 2024 was revised to a 12-14% decline, with expectations for stabilization and improvement in 2025.

• Inventory management and tight retail positions are expected to support margin and profitability.