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Feb. 16, 2023

Hasbro revenue losses included partial write-down of Power Rangers, but brand remains strong

Hasbro revenue losses included partial write-down of Power Rangers, but brand remains strong

Hasbro's 2022 revenues were down 9 percent year-over-year, the toymaker told investors on Thursday.

Hasbro, which owns "Power Rangers" and the studio Entertainment One, pulled in $5.86 billion last year, running an operating profit of $407.7 million, or 7 percent. The adjusted operating profit, meaning profit excluding stock-based compensation, restructuring costs and non-cash income tax expenses and benefits, came out to $922.5 million, or 15.8 percent.

In the fourth quarter, Hasbro revenues were down 17 percent year-over-year to $1.68 billion. The company ran an operating loss of $125.7 million, or -7.5 percent. The company ran an adjusted operating profit, however, of $269.2 million, or 16%.

"As we announced previously, our fourth quarter and full-year 2022 results came in below our expectations," Chris Cocks, Hasbro chief executive officer , said in a statement.

Cocks pointed to wins in sales of "Magic: The Gathering," now a billion-dollar brand. The company also made gains in licensing and direct-to-consumer sales.

"We also reduced owned and retail inventory levels from the third quarter peak and we are working to reduce them further this year," Cocks said. "Only a few months in, we have made meaningful progress in implementing Blueprint 2.0 with a heightened focus on innovation, data-driven investment in key brands and disciplined cost management."

The company's incurred costs included a $215 million non-cash write-down of "Power Rangers" due to what Cocks said was the prioritization of other brands in film development in the near term. Revenue for the brand grew year-over-year, Cocks told investors. Cocks noted the upcoming 30th-anniversary special and Cosmic Fury, as well as a young adult scripted series being helmed by Jenny Klein. Jonathan Entwistle, known for "The End of the F***ing World" and "I Am Not Okay With This" is in charge of the broader Power Rangers universe going forward.

Hasbro is in the midst of a massive restructuring that includes hundreds of job cuts. The company is also looking to offload Entertainment One, which is responsible for, among other things, the production of Power Rangers. Cocks' predecessor, the late Brian Goldner, led eOne's acquisition in 2019.

Deadline reports Cocks told investors that company leadership is seeing "strong interest" from companies interested in acquiring eOne. He said he expects to have an update sometime in the second quarter. The studio's 2022 output included "Orphan: First Kill," "Transformers: EarthSpark" and British distribution rights to "The Fabelmans" and "The Woman King." The company is also behind ongoing series like "Yellowjackets," "The Rookie" and "The Walking Dead."

Revenue from Hasbro's entertainment segment decreased 17%, and was down 12% excluding $65 million of music revenue associated with Entertainment One Music, which Hasbro sold in 2021. Family brands revenue declined 40$, primarily due to the lack of a film with as much draw as "My Little Pony: A New Generation," which was released in 2021.

Overall, Hasbro executives said they expect revenue to be down slightly in 2023, with adjusted EBITDA (earnings before taxes, interest, depreciation and amortization) to be on par with what it was last year. They expect their operating cash flow to be in the range of $600 to $700 million.