Hasbro (HAS) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue declined 18% year-over-year to $995 million, mainly due to the eOne divestiture, but profit and EPS rose sharply on cost savings, margin gains, and strong performance in Wizards of the Coast and Digital Gaming.

• The business is undergoing a multi-year transformation, focusing on games, IP, toys, and operational efficiency, with inventory down 51% year-over-year.

• Digital initiatives and licensing, especially MONOPOLY GO! and Magic: The Gathering, drove significant upside and margin expansion.

• Cost savings of $40 million in Q2 and $90 million year-to-date were achieved through supply chain and operational improvements.

• Full-year guidance was raised, and a quarterly dividend of $0.70 per share was declared.

Financial highlights

• Q2 2024 revenue: $995 million (-18% YoY); adjusted operating profit: $249 million (+82% YoY); adjusted net earnings: $170 million; adjusted EPS: $1.22 (+$0.73 YoY); adjusted EBITDA: $314 million (+58% YoY).

• Year-to-date revenue: $1.75 billion (-21% YoY); adjusted operating profit: $397 million; adjusted net earnings: $255 million; adjusted EPS: $1.83; adjusted EBITDA: $486 million (+64% YoY).

• Q2 2024 gross margin improved to 75.3%–76.1%, up over 15 points year-over-year.

• Inventory reduced 51% year-over-year; days of supply down 48% year-over-year.

• Operating cash flow year-to-date was $365 million, a $246 million improvement year-over-year.

Outlook and guidance

• Full-year guidance raised: Wizards revenue now expected to be down 1%–3% (improved from down 3%–5%), with operating margin around 42%.

• Consumer Products revenue expected to be down 7%–11%, with adjusted operating margin 4%–6%.

• Adjusted EBITDA guidance increased to $975 million–$1.025 billion; cost savings target of $750 million gross by 2025 remains on track.

• Management expects sufficient liquidity for the next twelve months, with ongoing transformation and restructuring actions.

• Capital spending outlook maintained at ~$225 million; tax rate outlook at 24%.