Categories Analysis, Leisure & Entertainment

What to look for when Hasbro (HAS) reports first quarter 2024 earnings results

The consensus estimate for EPS in Q1 2024 is $0.30

Shares of Hasbro Inc. (NASDAQ: HAS) stayed green on Tuesday. The stock has gained 8% year-to-date. The toymaker is scheduled to report its first quarter 2024 earnings results on Wednesday, April 24, before markets open. Here’s what to look for in the earnings report:

Revenue

Analysts are projecting revenues of $741.2 million for the first quarter of 2024, which would represent a 25% decline from the year-ago period. In the fourth quarter of 2023, revenues declined 23% year-over-year to $1.3 billion.

Earnings

The consensus estimate for EPS in Q1 2024 is $0.30, which compares to adjusted EPS of $0.01 reported in Q1 2023. In Q4 2023, adjusted EPS was $0.38.

Points to note

Hasbro went through a challenging period in 2023 leading the company to take several steps to transform its business. The toymaker saw revenue growth in its Wizards of the Coast and Digital Gaming segment be offset by double-digit declines in its Consumer Products and Entertainment segments in Q4.

On its last quarterly call, Hasbro said it anticipates headwinds in the toy category to continue in 2024. With older discounted inventory remaining in the market, a value-conscious consumer, and less tailwind from entertainment due to a reduced box office slate, Hasbro has been working on getting its cost structure and inventory positions in shape. The company exited 2023 with its retail inventory down around 20%.

The revenue declines in Consumer Products remain a concern. Last quarter, revenues in this segment fell 25% due to planned business exits, broader category declines, and a higher focus on clearing inventory. Hasbro has forecast revenues in Consumer Products to decline 7-12% in 2024.

Meanwhile, the company’s investments in its Fewer, Bigger, Better strategy are expected to yield benefits. Under this strategy, Hasbro is focusing on fewer SKUs that drive higher impact, investing more in winning brands in more focused categories, and driving better innovation. The SKU elimination along with favorable product mix and supply chain cost savings are expected to help drive margin expansion.

Hasbro is focused on driving growth in FURBY, TRANSFORMERS, and PEPPA PIG in 2024. Board Games is also expected to see growth in the coming year. The company’s collaboration with Walt Disney is expected to drive gains in the Action Figures category.

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