Shares of Hasbro, Inc. (NASDAQ: HAS) stayed green on Monday. The stock has gained 11% over the past one month. The toy company saw revenues decline double-digits in the second quarter of 2024, mainly due to the eOne divestiture. Adjusted earnings, meanwhile, more than doubled year-over-year, helped by favorable business mix and improved operations.
In the second quarter, double-digit revenue growth in the Wizards of the Coast and Digital Gaming segment was offset by revenue declines in the Consumer Products, and Entertainment segments. Here’s a look at the company’s expectations for its key segments in the near term:
Consumer Products
Revenue in the Consumer Products segment declined 20% in Q2 2024, due to shifts in entertainment timing, planned business exits and reduced closeouts. However, the segment benefited from gains in FURBY, PLAY-DOH, and G.I. JOE. As mentioned on its quarterly conference call, PLAY-DOH has shown continued momentum and the company is bringing out new products like PLAY-DOH Marvel action figures in partnership with Disney.
Within toys, after launching successfully in Japan, the company is rolling out Beyblade X globally and the early response has been positive. It is also well-positioned to take advantage of the release of the upcoming movie Transformers One.
Hasbro now expects revenue in the Consumer Products segment to be down 7-11% in FY2024 versus the previous range of down 7-12%. This revision is based on encouraging demand trends and retailer support for brands such as Beyblade, PLAY-DOH, and TRANSFORMERS. The company expects a low single-digit decline in Q3 2024 before flipping to growth in Q4 and it anticipates continued headwinds from divestitures.
Wizards of the Coast and Digital Gaming
Revenues in the Wizards segment increased 20% in Q2, driven by the launch of the Modern Horizons 3 set, strength in licensed and digital gaming revenue, and a benefit from an international publishing deal. The success of Modern Horizons 3 delivered strong gains for MAGIC: THE GATHERING. Growth in MAGIC: THE GATHERING drove a 3% rise in tabletop revenue during the quarter. Licensed and digital gaming revenue benefited from gains in Monopoly Go! and Baldur’s Gate 3.
Hasbro expects revenue in the Wizards segment to be down 1-3% in FY2024 versus its prior range of down 3-5%. This revision is based on the outperformance of digital licensing during the first half of the year.
For the full year, Monopoly Go! is expected to generate around $105 million in revenue while Baldur’s Gate 3 is expected to bring in around $30 million. Digital licensing is expected to be down in the third quarter as the company laps the launch of Baldur’s Gate 3, and the fourth quarter is expected to be relatively flat versus last year.
Entertainment
In Q2, revenue in Entertainment decreased 90% due to the eOne divestiture. Excluding this impact, revenue declined 30%. For the full year of 2024, after adjusting for the impact of the eOne sale, Entertainment revenues are expected to be down approx. $15 million versus the previous year.