Toy and game company Hasbro has swung to profit in the second quarter as the result of the company’s ongoing turnaround plan.
For the three months ended June 30, the company achieved net earnings of $138.5 million compared to net loss of $234.9 million in the prior-year period.
Adjusted operating profit was $249 million, up by $112 million versus last year, and adjusted operating margin rose 13.7 points to 25 per cent, driven by favorable business mix, supply chain productivity and reduced operating costs.
Chris Cocks, Hasbro CEO, said the company delivered a “ solid performance” in games and digital licensing during the quarter and is becoming more profitable and agile.
The company’s revenue fell 18 per cent, primarily due to the divestiture of the EOne Film & TV business. Excluding the divestiture, revenue declined 6 per cent.
By segment, growth of 20 per cent in the Wizards of the Coast and digital gaming was offset by declines in consumer products (down 20 per cent) and entertainment (down 90 per cent, or 30 per cent if excluding the EOne divestiture).
Second-quarter inventory decreased 51 per cent, including a 55 per cent decline in consumer products inventory.
“We continued to make meaningful progress in our turnaround for consumer products in the second quarter,” said CFO Gina Goetter. “The Hasbro team remains focused on back half execution and delivering on our updated full-year commitments.”
Given the positive results, the company has raised its full-year EBITDA outlook from $975 million to $1.025 billion. It is targeting gross savings of $750 million by the end of 2025.
