Hasbro says the company is positioning to return to profitable growth by refocusing on the business of play.
Hasbro has reported financial results for the third quarter 2023.
“Our third quarter results highlight the strength of Hasbro’s diversified toy and game portfolio and the progress we have made on our transformation,” said Chris Cocks, Hasbro chief executive officer. “Wizards of the Coast and Digital Gaming delivered a standout performance across strength in Magic: The Gathering and Dungeons & Dragons, particularly the blockbuster August release of Baldur’s Gate III. We are taking action to address the tougher macro environment across Toys and Entertainment and positioning the company to return to profitable growth.”
He added: “Building on the strategy we outlined a year ago, we’re growing share behind our franchise brands in core categories, driving savings and investment capacity through operational excellence and building new growth across games, direct to consumer and licensing. With the upcoming sale of the eOne Film and TV business, we are refocusing our company on what has traditionally made us great, the business of play. We believe in the long-term growth potential of toys and are leaning in.”
The company said its plan for Q4 is to drive share over the holiday and exit the year with clean inventory, a much-improved corporate overhead and a clear runway for introducing new product innovation and go-to market support in the quarters ahead.
Q3 revenue declined 10%, with significant growth in Wizards of the Coast and Digital Gaming segment (+40%) not able to offset the declines in Consumer Products (-18%) and Entertainment (-42%).
CP revenue decline was the result of exited licences and softer category trends, although share increased across four of the five focus categories.
Hasbro said it is on track to deliver approximately $200m of gross cost savings in 2023 as part of Operational Excellence initiative, and added that the sale of its eOne Film and TV business is on track to close by year end.
“We are making good progress on our transformation and the work we have done to date has positioned us well to grow our world-class gaming portfolio and strengthen our toy business,” added Gina Goetter, Hasbro chief financial officer. “We continue to make progress in lowering inventory levels and are on track to meet our long-term gross cost savings goals earlier than expected. Although the impact of the broader Toy category declines has changed our consumer products and total Hasbro outlook, we are growing share in the categories where we compete and beginning to see the benefits of our cost savings initiatives play through the P&L. Resetting our cost base and removing complexity will help ensure we are well positioned as we sharpen our innovation pipeline for 2024 and 2025.”
