Monopoly Maker Hasbro Inventory Falls 39% In Q3, CFO Vows To Finish 2024 With Improved Profitability

Hasbro Inc HAS reported a third-quarter sales decline of 15% year-on-year to $1.281 billion, marginally missing the analyst consensus estimate of $1.295 billion.

The revenue decline was driven primarily by the eOne film divestiture; excluding the divestiture, revenue declined by 9%.

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Segment Revenue: Consumer Products declined 10% driven by exited brands, reduced closeouts and softer than anticipated volume; declines partially offset by new product innovation and strength in consumer products licensing.

Wizards of the Coast and Digital Gaming revenue decreased 5% as growth in MAGIC: THE GATHERING was offset by expected declines in Licensed and Digital Gaming due to the launch of Baldur's Gate 3 in the third quarter 2023. Monopoly Go! contributed $30M of revenue, in line with guidance.

Entertainment segment revenues plunged 86%, impacted by the sale of eOne divestiture; absent this impact, revenue declined 17%.

Selling, distribution, and administration costs fell 15.0%. The operating margin expanded Y/Y from (11.3)% to 23.6%, and operating income for the quarter was $301.9 million compared to a $169.5 million loss last year.

Adjusted EBITDA for the quarter was $406.4 million. Adjusted EPS of $1.73 beat the analyst consensus of $1.28.

Hasbro held $1.19 billion in cash and equivalents as of September end. The operating cash flow for nine months totaled $587.6 million.

Hasbro-owned inventory was down 39% compared to the prior year, including a 40% decline in Consumer Products inventory compared to the third quarter of 2023.

The company's quarterly cash dividend of $0.70 per common share, payable on December 4, to shareholders of record at the close of business on November 20.

"We continue to execute our turnaround efforts and are poised to finish the year with improved profitability, cash flow and operational rigor," said Gina Goetter, Hasbro's Chief Financial Officer.

Outlook: Hasbro revised its fiscal 2024 Consumer Products Segment revenue outlook from down 7%–11% to down 12%–14%.

The company reiterated fiscal 2024 adjusted EBITDA guidance of $975 million—$1.025 billion. By 2025's end, Hasbro maintained gross savings of $750 million.

Price Action: HAS stock is down 0.16% at $70.22 in premarket at the last check Thursday.

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