PAWTUCKET – Hasbro Inc. on Thursday reported a loss of $22.1 million in the first quarter of 2023 compared with a profit of $61.2 million a year ago.
That amounts to a 16-cent loss per diluted share. In the same period in 2022, Hasbro made a profit of 44 cents per diluted share.
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Despite the loss for the quarter, Hasbro CEO Chris Cocks said in a statement Thursday that the results were ahead of the company’s expectations. While acknowledging it is forecasting a “flat to declining toy and game market in 2023,” Hasbro said it still expects to meet its targets for the full year.
“The year has started on plan as we reduce retail inventory levels and remain positioned to drive continued margin expansion. As we work through our inventory, we continue to invest in our growth priorities, reduce costs, and return cash to shareholders,” said Deborah Thomas, Hasbro chief financial officer. “The first quarter is the smallest quarter of the year, and there is a lot of the year ahead of us.”
Company revenue totaled $1 billion, a decrease of 14% year over year:
- The company’s franchise brands portfolio, including Magic the Gathering, Play-Doh and Nerf, logged revenue of $613 million in the quarter, a decline of 6% year over year. The company noted top brand performances included Magic: The Gathering, My Little Pony and Peppa Pig.
- Partner brands portfolio revenue, including products for Star Wars, Marvel’s Spider Man and Marvel Studios content, totaled $132 million, a decline of 36% year over year. The portfolio was led by the Spider-Man franchise, including products in support of Marvel Studios’ “Spider-Man: No Way Home” and the new animated show Marvel’s “Spidey and His Amazing Friends,” plus Avengers franchise support with the upcoming Marvel Studios’ “Doctor Strange in the Multiverse of Madness.”
- Hasbro gaming revenue totaled $386.6 million, an increase of 2% year over year.
- TV/film/entertainment revenue totaled $163 million, a decrease of 16% year over year.
Cocks said the company has made progress in implementing its Blueprint 2.0 strategy, including heightening the company’s focus on high-growth, high-profit categories while improving its cost structure; and adding talented executives to our leadership team.
“First quarter results came in ahead of our expectations and position Hasbro to meet our full-year financial targets,” Cocks said. “The global Hasbro team continues to execute our strategy to unlock the value of our rich IP library across our growth priorities including in gaming, direct-to-consumer and licensing.”
Hasbro announced on April 24 that it has entered into a multiyear licensing agreement with Mattel to create co-branded toys and games to coincide with the summer movie season.
Hasbro will create Barbie-branded Monopoly games launching in fall 2023. Mattel will produce Transformers-branded UNO games slated for release later this year and Transformers-branded Hot Wheels vehicles set to debut in early 2024.
The new collaboration is being launched against the backdrop of two theatrical releases this summer – Hasbro’s “Transformers: Rise of the Beasts” from Paramount Pictures Corp. on June 9 and Mattel’s “Barbie” from Warner Bros. on July 21.
On April 15, Hasbro appointed Gina Goetter to succeed Thomas as chief financial officer. Thomas announced in November that she was retiring after 24 years with Hasbro.
On Jan. 26, Hasbro announced that it was eliminating 1,000 jobs, about 15% of its global workforce. A “small percentage” of those layoffs will occur in Rhode Island, Hasbro said.
Cocks was compensated more than $9.4 million in 2022 despite the company reporting a loss for the year, the company reported in its proxy statement released on April 3.
On Jan. 26, Hasbro announced that it was eliminating 1,000 jobs, about 15% of its global workforce, saying at the time a “small percentage” of those layoffs will occur in Rhode Island.
Hasbro unveiled Blueprint 2.0 on Oct. 4 when it cut its full-year revenue forecast. The initiative focused investment on its most valuable franchises across toys, games, entertainment and licensing. The toy company plans to significantly increase strategic investment in key brands, focusing on gaming, direct to consumer, franchise brands and licensing. Priority brands for merchandise investment include Peppa Pig, Transformers, Dungeons & Dragons, Magic: The Gathering, and My Little Pony.
On Nov. 17, Hasbro announced it was selling part of its film and TV production and distribution unit, Entertainment One.
Hasbro bought Entertainment One for about $4 billion in 2019 to expand into the infant and preschool market by gaining access to popular TV shows such as “Peppa Pig” and “PJ Masks.”
In June 2022, Hasbro shareholders reelected all of the company’s 13 directors to its board, rejecting a slate of three nominees from activist investor Alta Fox Capital Management, which had waged a contentious, monthslong proxy battle for more influence over the company.
