PAWTUCKET – Hasbro Inc. lowered its annual revenue forecast and unveiled a new corporate strategy on Tuesday during its first investor day under the leadership of new CEO Chris Cocks.
The toymaker lowered its annual revenue forecast to between flat and slightly down on a constant currency basis from its prior expectation of low single-digit revenue growth. Hasbro also reported it expects third-quarter revenue to decline approximately 15% on a reported basis and approximately 12% at constant currency, with operating profit affected more significantly due to the mix of revenue being different than last year.
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However, the company aims to increase profit by 50% over the next three years, with plans to expand margins to 20% by 2027 as it focuses on selling more toys and games such as Peppa Pig and Nerf Guns directly to consumers and via online channels. Hasbro also forecasts it will report annual revenue of $8.5 billion or greater by 2027.
Also Tuesday, Hasbro unveiled its new corporate strategy Blueprint 2.0, in which it will focus investment on its most-valuable franchises across toys, games entertainment and licensing. The company is also implementing an Operational Excellence program designed to deliver $250 million-$300 million in run-rate cost savings over the next three years, with $150 million expected in run-rate savings by year end 2023.
“This strategic approach is core to how we’ll continue to bring our strong brands to life for consumers of all ages, and how we’ll manage the business to monetize our intellectual property, drive investments, deliver profitable growth and create shareholder value,” Cocks said.
The Blueprint 2.0 concept was the result of a nine-month strategic review that focused on creating near-term, meaningful change that is expected to deliver positive financial impact as early as the fourth quarter of this year.
Highlights include:
- Direct to consumer and digital platform anchored by Hasbro Pulse and D&D Beyond is projected to become a $1 billion business with more than 50 million active accounts by 2027.
- Licensing expansion with Basic Fun on Littlest Pet Shop and Lego on Transformers, plus an expanded portfolio of content across Hasbro’s 100-year IP vault.
- A multiyear, $100 million-plus investment into a Brand Insights Platform to enable data-based decisions, deliver superior consumer insights and speed innovation.
- Magic The Gathering, which is on track to become its first billion-dollar brand, will have collaborations with Final Fantasy and Assassin’s Creed and a new blockbuster 30th Anniversary Edition collectible series.
- Dungeons & Dragons will be a major growth priority, including a feature film, “D&D: Honor Among Thieves,” a new AAA video game, “Baldur’s Gate III,” and a host of new collectibles, toys and games paired with the movie in 2023.
- Transformers will receive a new entertainment lineup, including an animated kids show, “Transformers: EarthSpark,” a new film release in June 2023, “Transformers: Rise of the Beasts,” and an upcoming CGI film in summer 2024.
- Action-figure portfolio growth is expected behind six movies in 2023, including Marvel Studios’ “Ant-Man and the Wasp: Quantumania,” Marvel Studios’ “Guardians of the Galaxy: Vol 3,” Sony’s “Spider-Man: Across the Spider-Verse,” Lucasfilm’s “Indiana Jones,” and two yet-to-be-named titles.
- Preschool growth will be anchored by Peppa Pig Play-Doh, Marvel’s “Spidey and His Amazing Friends” and Lucasfilm’s “Star Wars: Young Jedi Adventures.”
- NERF will expand into new categories, including the its inaugural NERFBALL tournament in 2023.
