Hasbro (HAS) Q4 2023 earnings summary

Executive summary

• FY 2023 revenue was $5.003B, down 15%; adjusted operating profit was $477M, adjusted net earnings $349M and adjusted diluted EPS $2.51.

• Wizards of the Coast and Digital Gaming growth, including Baldur’s Gate III and Monopoly Go!, was outweighed by declines in Consumer Products and Entertainment; strategy emphasized fewer, bigger brands and inventory reset.

Financial highlights

• Q4 revenue was $1.289B, down 23%; reported operating loss was $1.199B and net loss attributable to Hasbro was $1.061B, including non-cash charges.

• Q4 adjusted operating loss was $50M, adjusted net earnings $52M, adjusted diluted EPS $0.38 and adjusted EBITDA $11M.

• FY reported operating loss was $1.539B and net loss attributable to Hasbro was $1.489B; adjusted EBITDA was $709M.

• FY operating cash flow was $726M versus $373M in 2022; working capital improved $350M, primarily from inventory reduction.

Outlook and guidance

• 2024 revenue outlook: Wizards of the Coast & Digital Gaming down 3%–5%, with 38%–40% operating margin; Consumer Products down 7%–12%, with 4%–6% margin.

• 2024 adjusted EBITDA guidance is $925M–$1B, assuming a 24% tax rate; guidance excludes the announced sale of select entertainment assets.

• Pro forma Entertainment revenue expected to decline $15M; adjusted operating margin expected at ~60%.

• Mid-term gross cost-savings target rose to $750M by year-end 2025; ~50% expected to flow to the bottom line, with a 20% adjusted operating profit margin target by 2027.