It has been about a month since the last earnings report for Hasbro (HAS Quick QuoteHAS - Free Report) . Shares have lost about 4.6% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Hasbro due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Hasbro Q4 Earnings & Revenues Beat Estimates

Hasbro reported impressive fourth-quarter fiscal 2021 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The bottom line outpaced the consensus mark for the sixth straight quarter, while the top line beat the same for the third consecutive quarter.

The company reported adjusted earnings of $1.21 per share, beating the Zacks Consensus Estimate of 89 cents. In the prior-year quarter, the company had reported adjusted earnings of $1.27 per share.

In the quarter under review, net revenues of $2,013.4 million beat the consensus mark of $1,867 million. The top line rose 17% on a year-over-year basis.

Brand Performances

During the fiscal fourth quarter, the Franchise Brand reported revenues of $769.3 million, up 9% year over year. During the quarter, Partner Brands’ revenues increased 13% year over year to $394.3 million. Revenues at Hasbro Gaming amounted to $286.1 million, declining 4% from the prior-year quarter’s levels. However, the figures increased 11% from the pre-pandemic levels of 2019. Its total gaming category revenues declined 1% year over year to $555.7 million. Emerging Brands’ revenues during the fiscal fourth quarter increased 41% year over year to $218.4 million. Revenues from TV/Film/Entertainment surged 61% year over year to $345.3 million. The segment’s revenues benefited from increased deliveries in scripted, unscripted as well as animated television and film.

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 the Consumer Products segments increased 9% year over year to $1,355.8 million. Adjusted operating margin came in at 10.4% compared with 11% reported in the prior-year quarter. During the quarter under review, the Wizards of the Coast and Digital Gaming segment’s revenues totaled $277.9 million, up 18% from $236 million reported in the year-ago quarter. The segment benefited from robust performance of MAGIC: THE GATHERING and DUNGEONS & DRAGONS as well as licensed digital gaming. The segment’s adjusted operating margin came in at 30.5% compared with 46.1% reported in the year-ago quarter. Revenues in the Entertainment segment increased 54% year over year to $379.7 million. The segment’s adjusted operating margin came in at 2.2% compared with 10.2% reported in the prior-year quarter.

Operating Highlights

During the fiscal fourth quarter, Hasbro's cost of sales (as a percentage of net revenues) came in at 33.9% compared with 34.4% in the prior-year quarter. Selling, distribution and administration expenses — as a percentage of net revenues — were 21.3%, in line with the prior-year quarter’s levels.

Balance Sheet

Cash and cash equivalents as of Dec 26, 2021, were $1,019.2 million compared with $1,449.7 million on Dec 27, 2020. At the end of the reported quarter, inventories totaled $552.1 million compared with $395.6 million in the year-ago period. As of Dec 26, 2021, long-term debt came in at $3,824.2 million compared with $4,660 million as of Dec 27, 2020.

Meanwhile, the company announced a hike in its quarterly dividend payout. The company raised its quarterly dividend by 3%, which indicates its intention to utilize free cash for boosting shareholders’ returns. The company raised the quarterly dividend to 70 cents per share (or $2.80 annually) from the previous payout of 68 cents (or $2.72 annually). The hiked dividend will be paid out on May 16, 2022, to shareholders on record as of May 2, 2022. During fourth-quarter fiscal 2021, the company paid out cash dividends worth $93.8 million.

2021 Highlights

Net revenues in 2021 came in at $6,420.4 million compared with $5,465.4 million in 2020. Adjusted operating profit in 2021 came in at $995.2 million compared with $826.7 million in 2020. In 2021, adjusted diluted EPS came in at $5.23 per share compared with $3.74 reported in the previous year.

Outlook

For fiscal 2022, the company anticipates revenue and operating profit growth at a low-single-digit rate. Operating cash flow is anticipated in the range of $700 to $800 million. For fiscal 2023, the company anticipates operating profit margin to be more than 16%. Operating cash flow is anticipated at approximately $1 billion. For fiscal 2024, the company expects revenue growth in the mid-single digits on a compound-annual basis. Consumer Products are estimated to grow in mid-single digit. Wizards of the Coast and Digital Gaming segment as well as Entertainment Segment is expected to rise in the range of high single to low double-digits.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -16.77% due to these changes.

VGM Scores

Currently, Hasbro has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Hasbro has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.