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Hasbro, Inc. (HAS - Free Report) reported fourth-quarter fiscal 2022 results, with earnings and revenues beating the Zacks Consensus Estimate.
Earnings & Revenues
In the fiscal fourth quarter, the company reported adjusted earnings per share (EPS) of $1.31, beating the Zacks Consensus Estimate of $1.30. In the prior-year quarter, it reported an adjusted EPS of $1.21.
Net revenues of $1,678.5 million beat the Zacks Consensus Estimate of $1,675 million but declined 17% on a year-over-year basis. Dismal performances of Franchise Brands, Partner Brands and Emerging Brands affected the top line.
Chris Cocks, Hasbro chief executive officer, said, “For 2023, we have a focused plan to grow share in our key categories and further improve our margins. We are capitalizing on a fantastic entertainment slate, including Dungeons & Dragons: Honor Among Thieves in March and exciting new product launches, while facing a challenging consumer discretionary environment and approximately $300 million in revenue headwinds from exited licenses, brands and markets as well as foreign exchange.”
Brand Performances
In the fiscal fourth quarter, Franchise Brands reported revenues of $729.5 million, down 12% year over year. Partner Brands’ revenues declined 30% year over year to $276.2 million.
Revenues at Hasbro Gaming amounted to $262.6 million, down 8% from the prior-year quarter’s level. The total gaming category revenues rose 5% year over year to $581.8 million. Emerging Brands’ revenues decreased 30% year over year to $110.3 million.
Revenues from TV/Film/Entertainment dropped 13% year over year to $299.9 million mainly due to the absence of comparable film releases in the reported quarter.
Hasbro has three reportable operating segments — Consumer Products, Wizards of the Coast and Digital Gaming, and Entertainment.
In the fiscal fourth quarter, net revenues from Consumer Products decreased 26% year over year to $1,004.7 million. The adjusted operating margin was 10.2% compared with 10.4% in the prior-year quarter. Adjusted EBITDA was $165.7 million compared with $182 million in the prior-year quarter.
The Wizards of the Coast and Digital Gaming segment’s revenues totaled $339 million, up 22% from $277.9 million reported in the year-ago quarter. The adjusted operating margin was 30.7% compared with 30.5% in the year-ago quarter. Adjusted EBITDA was $115.9 million compared with $107 million in the prior-year quarter.
Entertainment’s revenues declined 12% year over year to $334.8 million. The adjusted operating margin was 9.8% compared with 2.2% in the prior-year quarter. Adjusted EBITDA was $45.9 million compared with $20.9 million in the prior-year quarter.
Operating Highlights
In the fiscal fourth quarter, Hasbro's cost of sales, and selling, distribution and administration expenses (as percentages of net revenues) came in at 34.6% and 39.7% compared with 33.9% and 21.3% reported in the prior-year quarter, respectively.
HAS reported an adjusted EBITDA of $327.2 million compared with $306.5 million reported in the prior-year quarter.
Balance Sheet
Cash and cash equivalents as of Dec 25, 2022, were $513.1 million compared with $1,019.2 million as of Dec 26, 2021. At the reported-quarter end, inventories totaled $676.8 million compared with $552.1 million in the year-ago period. As of Dec 25, 2022, long-term debt was $3,711.2 million compared with $3,824.2 million as of Dec 26, 2021.
The company’s board of directors announced a dividend of 70 cents per common share, payable May 15, to shareholders of record at the close of business as of May 1. In fourth-quarter fiscal 2023, the company paid out cash dividends worth $96.7 million.
2023 Outlook
For fiscal 2023, the company expects revenues to decline in the low-single digits. The adjusted operating profit margin is expected to expand 50-70 basis points (bps). The company anticipates adjusted earnings per share of $4.45-$4.55.
Adjusted EBITDA is expected to be flat year over year. Operating cash flow is projected to be $600-$700 million.
Segment wise, the company anticipates revenues in Consumer Products to decline year over year (at cc) in the mid-single digits, with an adjusted operating profit margin improvement of 150-200 bps from the adjusted 7.6% reported in 2022.
In the Wizards of the Coast and Digital Gaming segment, the company expects revenues to grow in the mid-single digits. The operating profit margin is expected to be in the high-30% range.
The company projects Entertainment revenues to increase in the low-single digits. The adjusted operating margin is expected to increase marginally from 8.6% reported in 2022.
Long-term Outlook
By 2027, the company expects revenues to increase in the mid-single digits. It anticipates to achieve an operating cash flow of $1 billion annually by 2025. It projects annualized run-rate cost savings of $250-$300 million by 2025 end.
Zacks Rank & Stocks to Consider
Hasbro currently has a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the Zacks Consumer Discretionary sector are OneSpaWorld Holdings Limited. (OSW - Free Report) , Las Vegas Sands Corp. (LVS - Free Report) and Playa Hotels & Resorts N.V. (PLYA - Free Report) . While OneSpaWorld and Las Vegas Sands sport a Zacks Rank #1 (Strong Buy) at present, Playa Hotels carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
OneSpaWorld has a trailing four-quarter earnings surprise of 84.2%, on average. Shares of the company have gained 2.9% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates increases of 24.2% and 91%, respectively, from the year-ago period’s reported levels.
Las Vegas Sands has a long-term earnings growth rate of 4.9%. The stock has gained 18.8% in the past year.
The Zacks Consensus Estimate for LVS’ 2023 sales and EPS indicates improvements of 100.8% and 217.5%, respectively, from the year-ago period’s reported levels.
Playa Hotels has a trailing four-quarter earnings surprise of 19.4%, on average. Shares of the company have declined 8.3% in the past year.
The Zacks Consensus Estimate for PLYA’s 2023 sales and EPS indicate increases of 7.9% and 26.3%, respectively, from the year-ago reported levels.
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Hasbro (HAS) Q4 Earnings & Revenues Beat Estimates, Dip Y/Y
Hasbro, Inc. (HAS - Free Report) reported fourth-quarter fiscal 2022 results, with earnings and revenues beating the Zacks Consensus Estimate.
Earnings & Revenues
In the fiscal fourth quarter, the company reported adjusted earnings per share (EPS) of $1.31, beating the Zacks Consensus Estimate of $1.30. In the prior-year quarter, it reported an adjusted EPS of $1.21.
Net revenues of $1,678.5 million beat the Zacks Consensus Estimate of $1,675 million but declined 17% on a year-over-year basis. Dismal performances of Franchise Brands, Partner Brands and Emerging Brands affected the top line.
Chris Cocks, Hasbro chief executive officer, said, “For 2023, we have a focused plan to grow share in our key categories and further improve our margins. We are capitalizing on a fantastic entertainment slate, including Dungeons & Dragons: Honor Among Thieves in March and exciting new product launches, while facing a challenging consumer discretionary environment and approximately $300 million in revenue headwinds from exited licenses, brands and markets as well as foreign exchange.”
Brand Performances
In the fiscal fourth quarter, Franchise Brands reported revenues of $729.5 million, down 12% year over year. Partner Brands’ revenues declined 30% year over year to $276.2 million.
Revenues at Hasbro Gaming amounted to $262.6 million, down 8% from the prior-year quarter’s level. The total gaming category revenues rose 5% year over year to $581.8 million. Emerging Brands’ revenues decreased 30% year over year to $110.3 million.
Revenues from TV/Film/Entertainment dropped 13% year over year to $299.9 million mainly due to the absence of comparable film releases in the reported quarter.
Hasbro, Inc. Price, Consensus and EPS Surprise
Hasbro, Inc. price-consensus-eps-surprise-chart | Hasbro, Inc. Quote
Segmental Revenues
Hasbro has three reportable operating segments — Consumer Products, Wizards of the Coast and Digital Gaming, and Entertainment.
In the fiscal fourth quarter, net revenues from Consumer Products decreased 26% year over year to $1,004.7 million. The adjusted operating margin was 10.2% compared with 10.4% in the prior-year quarter. Adjusted EBITDA was $165.7 million compared with $182 million in the prior-year quarter.
The Wizards of the Coast and Digital Gaming segment’s revenues totaled $339 million, up 22% from $277.9 million reported in the year-ago quarter. The adjusted operating margin was 30.7% compared with 30.5% in the year-ago quarter. Adjusted EBITDA was $115.9 million compared with $107 million in the prior-year quarter.
Entertainment’s revenues declined 12% year over year to $334.8 million. The adjusted operating margin was 9.8% compared with 2.2% in the prior-year quarter. Adjusted EBITDA was $45.9 million compared with $20.9 million in the prior-year quarter.
Operating Highlights
In the fiscal fourth quarter, Hasbro's cost of sales, and selling, distribution and administration expenses (as percentages of net revenues) came in at 34.6% and 39.7% compared with 33.9% and 21.3% reported in the prior-year quarter, respectively.
HAS reported an adjusted EBITDA of $327.2 million compared with $306.5 million reported in the prior-year quarter.
Balance Sheet
Cash and cash equivalents as of Dec 25, 2022, were $513.1 million compared with $1,019.2 million as of Dec 26, 2021. At the reported-quarter end, inventories totaled $676.8 million compared with $552.1 million in the year-ago period. As of Dec 25, 2022, long-term debt was $3,711.2 million compared with $3,824.2 million as of Dec 26, 2021.
The company’s board of directors announced a dividend of 70 cents per common share, payable May 15, to shareholders of record at the close of business as of May 1. In fourth-quarter fiscal 2023, the company paid out cash dividends worth $96.7 million.
2023 Outlook
For fiscal 2023, the company expects revenues to decline in the low-single digits. The adjusted operating profit margin is expected to expand 50-70 basis points (bps). The company anticipates adjusted earnings per share of $4.45-$4.55.
Adjusted EBITDA is expected to be flat year over year. Operating cash flow is projected to be $600-$700 million.
Segment wise, the company anticipates revenues in Consumer Products to decline year over year (at cc) in the mid-single digits, with an adjusted operating profit margin improvement of 150-200 bps from the adjusted 7.6% reported in 2022.
In the Wizards of the Coast and Digital Gaming segment, the company expects revenues to grow in the mid-single digits. The operating profit margin is expected to be in the high-30% range.
The company projects Entertainment revenues to increase in the low-single digits. The adjusted operating margin is expected to increase marginally from 8.6% reported in 2022.
Long-term Outlook
By 2027, the company expects revenues to increase in the mid-single digits. It anticipates to achieve an operating cash flow of $1 billion annually by 2025. It projects annualized run-rate cost savings of $250-$300 million by 2025 end.
Zacks Rank & Stocks to Consider
Hasbro currently has a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the Zacks Consumer Discretionary sector are OneSpaWorld Holdings Limited. (OSW - Free Report) , Las Vegas Sands Corp. (LVS - Free Report) and Playa Hotels & Resorts N.V. (PLYA - Free Report) . While OneSpaWorld and Las Vegas Sands sport a Zacks Rank #1 (Strong Buy) at present, Playa Hotels carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
OneSpaWorld has a trailing four-quarter earnings surprise of 84.2%, on average. Shares of the company have gained 2.9% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates increases of 24.2% and 91%, respectively, from the year-ago period’s reported levels.
Las Vegas Sands has a long-term earnings growth rate of 4.9%. The stock has gained 18.8% in the past year.
The Zacks Consensus Estimate for LVS’ 2023 sales and EPS indicates improvements of 100.8% and 217.5%, respectively, from the year-ago period’s reported levels.
Playa Hotels has a trailing four-quarter earnings surprise of 19.4%, on average. Shares of the company have declined 8.3% in the past year.
The Zacks Consensus Estimate for PLYA’s 2023 sales and EPS indicate increases of 7.9% and 26.3%, respectively, from the year-ago reported levels.