The winds of change are blowing fiercely at Hasbro.
Amid weaker-than-anticipated preliminary earnings for Q4 and full-year 2022, the entertainment and toy company revealed plans to eliminate 15% of its global workforce. Eric Nyman, an 18-year Hasbro veteran who was promoted to President and Chief Operating Officer just last year, will depart the company. In his absence, the consumer products teams will report directly to Hasbro CEO Chris Cocks.
“Despite strong growth in Wizards of the Coast and Digital Gaming, Hasbro Pulse, and our licensing business, our Consumer Products business underperformed in the fourth quarter against the backdrop of a challenging holiday consumer environment,” Cocks says. “We are focused on implementing transformational changes aimed at substantially reducing costs and increasing our growth rates and profitability. While the full-year 2022, and particularly the fourth quarter, represented a challenging moment for Hasbro, we are confident in our Blueprint 2.0 strategy, unveiled in October, which includes a focus on fewer, bigger brands; gaming; digital; and our rapidly growing direct to consumer and licensing businesses. Through this strategy, we are putting the consumer at the center of everything we do, and our Operational Excellence program is on track to drive significant cost savings across the business and improve our overall competitiveness. These strategic pillars helped to improve our results, particularly operating profit margin and revenue growth in key categories, in a challenging fourth quarter, and lay the groundwork for continued progress in 2023.”
Q4 Earnings
Hasbro was pummeled in Q4 with a 17% decline in year-over-year sales despite earning $1.68 billion in revenue.
Wizards of the Coast and Digital Gaming segment revenue of approximately $339 million was up 22% year-over-year; Consumer Products segment revenue of approximately $1.0 billion was down 26% year-over-year; and Entertainment segment revenue of approximately $335 million was down 12% year-over-year.
Full Year Earnings
Preliminary full-year 2022 revenue fell 9% to approximately $5.86 billion.
Wizards of the Coast and Digital Gaming segment revenue of approximately $1.33 billion marked a 3% year-over-year gain; Consumer Products segment revenue of approximately $3.57 billion, was down 10% year-over-year; and Entertainment segment revenue of approximately $959 million was down 17% year-over-year.
Hasbro Layoffs
The reduction in the global workforce will result in around 1,000 jobs being eliminated in the coming weeks.
“The elimination of these positions will impact many loyal Hasbro employees, and we do not undertake this process lightly,” Cocks says. “However, the changes are necessary to return our business to a competitive, industry-leading position and to provide the foundation for future success.”
The preliminary earnings revealed today are based on available data. Final earnings will be revealed in the weeks ahead. Traditionally, the preliminary and final earnings are very close.
