Hasbro swings to a stronger-than-expected profit despite lower revenue

By Steve Gelsi

Consumer-product sales fall but gaming provides a boost

Hasbro Inc.'s stock rallied by 12% on Wednesday after the toy and gaming company said it swung to a stronger-than-expected profit in the first quarter as it reported "solid progress in our turnaround efforts."

Hasbro (HAS) said it earned $58.2 million, or 42 cents a share, in the first quarter, after it lost $22.1 million, or 16 cents a share, in the year-ago quarter.

Hasbro's adjusted first-quarter profit of 61 cents a share came in well ahead of the FactSet consensus estimate of 24 cents a share.

The figure of 61 cents a share included benefits from improved operations, a favorable stock-compensation adjustment and a reduction in net-interest expense.

First-quarter revenue fell 24% to $757.3 million from $1 billion in the year-ago quarter, beating analysts' estimates of $739.8 million.

Hasbro's lower revenue reflected its divestiture of its eOne film and television unit. The company sold the unit for $500 million in August 2023 to Lionsgate (LGF.A).

Excluding the divestiture, revenue fell 9%. Growth in its Wizards of the Coast and Digital Gaming and Entertainment units was offset by a 21% drop in consumer-products sales.

"Performance from our licensing portfolio shows the strength of our brands and we continue to fuel innovation in games and toys as we expand our reach across play patterns to fans of all ages," Chief Executive Chris Cocks said.

UBS analyst Arpiné H. Kocharyan reiterated a buy rating on the stock and said Hasbro's profit margins were higher than expected as its Wizards of the Coast unit outperformed. The business includes the games Dungeons & Dragons as well as Magic the Gathering.

Including Wednesday's gains, Hasbro stock is up 27.3% in 2024, while the S&P 500 has risen 6.6%.

-Steve Gelsi

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04-24-24 1051ET

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