HISSTANK Coverage Of Hasbro Q4 And Full Year 2022 Financial Call

Hasbro held its Q4 & Full Year 2022 Financial Call and made several announcements regarding the company’s current situation and future plans.

Hasbro’s new strategic plan, Blueprint 2.0, focuses on fewer, bigger, and more profitable brands, a sharpened focus on key categories, and growth initiatives in digital games, content, direct-to-consumer, and licensing. The company made progress in improving its bottom line despite a disappointing Q4, with $50 million in run-rate cost savings identified in 2022 and an anticipated $150 million in run-rate savings in 2023. Hasbro’s Direct Business and Wizards of the Coast, and Digital Gaming saw growth, with Magic: The Gathering reaching a billion-dollar brand milestone. However, there were challenges, including supply chain disruptions, pricing assumptions, and misfiring in updating the Open Game License. Hasbro’s licensing business was up 5%, with success in preschool, creativity, and action categories. The company is focused on growing market share and content centered around Hasbro IP. In 2023, Hasbro anticipates revenue to be down low-single digits, but progress in cost savings, operational excellence, and key brand initiatives is expected to drive continued operating margin expansion.

CEO Chris Cocks stated:

“In October, we laid out our new strategic plan for Hasbro, Blueprint 2.0, built on fewer, bigger, more profitable brands; a sharpened focus on the categories where Hasbro can be best in class; an Operational Excellence program to speed our agility and improve our cost competitiveness; and growth initiatives in digital games, Hasbro content, direct to consumer and licensing. While Q4 proved to be a disappointment, particularly in our traditional Toys and Games segment, we made progress under the hood that meaningfully improved our bottom line and sets us up for margin expansion in 2023 despite what we anticipate will be a continued challenging consumer environment.”

You can check out our full report, after the jump.

Mr. Cocks also elaborated on their entertainment plans:

“In Action, we have one of our strongest content lineups in a decade including 6 blockbuster films, a host of new streaming series, and some of the strongest new product innovations for TRANSFORMERS in years set against the launch of the Rise of the Beasts feature film in June. In Preschool, we are excited by the continued global appeal of PEPPA PIG and our new line based on the upcoming hit series, Star Wars: Young Jedi Adventures from Lucasfilm. In Creativity, PLAY-DOH is growing share and we are adding new compounds like Nickelodeon Slime and bringing best-selling innovations like our PLAY-DOH Ice Cream Truck into the new year. And in Games, we are adding all-new innovation like the casual AR game TWISTER AIR, building on the best-selling CLUE escape room series, extending our audiences in MAGIC with our newest Universes Beyond set based on JRR Tolkien’s Lord of the Rings series, Tales Of Middle Earth, growing our distribution for Magic Arena with our upcoming launch on Steam, and reaching all-new, global audience scale for D&D with our new blockbuster movie, Dungeons & Dragons: Honor Among Thieves, and AAA video game, Baldur’s Gate III, from our partners at Larian later this year.”

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“Our focus on content is centering around Hasbro IP for the long-term. Our sales process for the majority of eOne Film & TV is well underway with strong interest in these valuable assets. We expect to have an update in the second quarter. Our content pipeline for Hasbro IP is set for growth in 2023 with the upcoming release of the feature films, Dungeons & Dragons: Honor Among Thieves and Transformers: Rise of the Beasts, and a host of new and continuing preschool and kids shows from Transformers: Earthspark to the next seasons of My Little Pony and Peppa Pig to the new Kiya and the Kimoja Heroes on Disney Jr. and Disney+. Looking ahead, we are excited about the recently announced D&D Live Action series and, for next year, the animated TRANSFORMERS feature film with our partners at Paramount.”

Deb Thomas, Chief Financial Officer:

“We spent less on advertising last year, aligned with our focus on fewer brands, and lower film advertising in our entertainment segment as we comped the My Little Pony movie in 2021 and supported fewer film releases in 2022. The team plans to increase advertising support of our key brands and categories in 2023, increasing the overall spend but with a much more targeted approach.”

She also stated that Hasbro will be transitioning several Hasbro brands from in-house to [master] license models.

During the Q&A Session, Hasbro stated that they will be exiting the Sesame Street, Disney Princesses, and Trolls businesses this year.

Also, the company will be announcing more brands that they will be converting from in-house to master licenses where other companies will produce toys instead of Hasbro.

You can check out the presentation slides attached with this news post.