Hasbro Inc (HAS, Financial), a leading toy and game company, released its financial results for the third quarter of 2023 on October 26, 2023. The company reported a 10% decline in revenue, with significant growth in the Wizards of the Coast and Digital Gaming segment unable to offset declines in the Consumer Products and Entertainment segments.
Financial Performance
Hasbro's Q3 2023 revenue was $1,503.4 million, a decrease from $1,675.9 million in Q3 2022. The company reported an operating profit loss of $169.5 million, compared to an operating profit of $194.3 million in the same period last year. The adjusted operating profit was $342.6 million, a 27% increase from $270.5 million in Q3 2022.
Segment Performance
The Wizards of the Coast and Digital Gaming segment saw a 40% increase in revenue, driven by the success of licensed digital games Baldur’s Gate III and Monopoly Go! which drove $63 million of incremental revenue in Q3. The Consumer Products segment, however, experienced an 18% decline in revenue due to exited licenses and softer category trends.
Cost Savings and Inventory Management
Hasbro is on track to deliver approximately $200 million of gross cost savings in 2023 as part of its Operational Excellence initiative. The company has also made progress in lowering inventory levels, with a 27% reduction in owned inventory, including a 34% decline in Consumer Products inventory.
Outlook
Despite the impact of broader Toy category declines on the Consumer Products segment, Hasbro is growing share in the categories where it competes and is beginning to see the benefits of its cost savings initiatives. The company is also preparing for the upcoming sale of the eOne Film and TV business, refocusing on its core business of play.
Conclusion
While Hasbro Inc (HAS, Financial) faced challenges in the third quarter of 2023, the company's strong performance in the Wizards of the Coast and Digital Gaming segment and its ongoing cost savings initiatives indicate potential for future growth. The company's focus on its core business of play, coupled with its efforts to streamline operations and reduce costs, positions it well for the future.
Explore the complete 8-K earnings release (here) from Hasbro Inc for further details.
