Hasbro, Inc. HAS reported mixed third-quarter fiscal 2024 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top line declined year over year while the bottom line increased from the prior year's quarter figure. Following the results, the stock fell 3.6% in the pre-market trading session on Oct. 24.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Earnings & Revenues
In third-quarter 2024, HAS reported adjusted earnings per share (EPS) of $1.73, which beat the Zacks Consensus Estimate of $1.31. In the year-ago quarter, it reported an adjusted EPS of $1.64.
Net revenues of $1.28 billion missed the consensus mark of $1.29 billion. The top line declined 14.8% year over year from $1.5 billion reported in the prior year period. The downside can be attributed to dismal segmental performance.
Hasbro, Inc. Price, Consensus and EPS Surprise
Hasbro, Inc. Price, Consensus and EPS Surprise
Hasbro, Inc. price-consensus-eps-surprise-chart | Hasbro, Inc. Quote
Brand Performances
In the quarter under discussion, Franchise Brands reported revenues of $941.6 million, down 7% year over year. Our estimate for Franchise Brands revenues was pegged at $1.03 billion.
Partner Brands’ revenues plunged 17% year over year to $190.1 million. Per our model, revenues from Partner Brands were expected at $151.6 million.
Revenues at Portfolio Brands were $149.6 million, down 12% from the prior-year levels. Our estimate for the Portfolio Brands revenues was $127.9 million.
Total gaming category revenues fell 6% year over year to $593.2 million.
Segmental Revenues
Hasbro has three reportable operating segments: Consumer Products, Wizards of the Coast and Digital Gaming and Entertainment.
In the third quarter, net revenues from the Consumer Products segment decreased 10% year over year to $860.1 million. The drop was due to discontinued brands, fewer closeouts and lower-than-expected volume. Adjusted operating margin was 15.1% compared with 11.2% in the year-ago quarter.
The Wizards of the Coast and Digital Gaming segment’s revenues totaled $404 million, down 4.6% from $423.6 million in the year-ago quarter. Adjusted operating margin was 44.9% compared with 48% in the year-ago quarter.
The Entertainment segment’s revenues plunged 86% year over year to $17.2 million. Adjusted operating margin was 76.7% compared with 6.6% in the year-ago quarter.
Operating Highlights
In the third quarter, Hasbro’s cost of sales (as percentages of net revenues) was 29.6% compared with 32.9% in the year-earlier quarter.
Selling, distribution and administration expenses were $299.3 million, compared with $352.3 million reported in the prior-year quarter.
The company reported adjusted EBITDA of $406.4 million compared with $401.5 million a year ago.
Balance Sheet
As of Sept. 29, 2024, cash and cash equivalents were $696.1 million compared with $185.5 million as of Oct. 1, 2023. At the end of the reported quarter, inventories totaled $375.4 million compared with $617.7 million a year ago.
As of Sept. 29, 2024, long-term debt was $3.46 billion, down from $3.65 billion as of Oct. 1, 2023.
Updated 2024 Outlook
For 2024, segment-wise, HAS projects Consumer Products revenues to decline in the range of 12-14% from year-ago levels. Earlier, the company expected the segment's revenues to fall in the range of 7-11%. This segment’s operating margin is expected to be between 4% and 6%. In the Wizards of the Coast segment, management projects revenues to be flat to down 1%. Operating margin is suggested to be approximately 42%.
In 2024, HAS expects Pro-Forma Entertainment segment revenues to decline by $15 million from a year ago. Adjusted operating margin is anticipated to be approximately 60%.
For the full year, total adjusted EBITDA is expected to be between $975 million and $1.025 billion.
HAS’ Zacks Rank
Hasbro currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Consumer Discretionary Releases
Carnival Corporation & plc CCL reported impressive third-quarter fiscal 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. The top-and-bottom line increased on a year-over-year basis. The upside was backed by sustained demand strength and increased booking volumes. During the quarter, the company reported strong booking momentum for 2025, with volumes remaining robust at higher prices compared to the prior year.
The company raised its full-year 2024 adjusted EBITDA guidance due to strong demand and cost-saving opportunities. Management expects net yields, at constant currency, to increase around 10.4% compared with 2023 levels, exceeding the prior guidance provided in June due to strong demand.
Vail Resorts, Inc. MTN reported mixed fourth-quarter fiscal 2024 results, with earnings missing the Zacks Consensus Estimate and revenues beating the same. Revenues declined on a year-over-year basis and the adjusted loss widened from the prior-year quarter’s levels.
During the quarter, its reported EBITDA declined year over year due to the underperformance of the Australian winter business. Snowfall at Australian resorts fell 28% from the prior year’s levels and was 44% below the 10-year average, leading to an 18% drop in skier visitation. Although the North American summer mountain business did not meet expectations, it achieved 15% revenue growth with fewer weather and construction-related disruptions.
Hilton Worldwide Holdings Inc. HLT reported third-quarter 2024 results, with earnings and revenues beating the Zacks Consensus Estimate. Both the metrics increased on a year-over-year basis.
The company's performance was backed by notable improvements in revenue per available room, attributed to higher occupancy rates and average daily rates. Furthermore, in the quarter, Hilton opened 531 new hotels. It achieved net room growth of 33,600. As of Sept. 30, 2024, Hilton's development pipeline comprised nearly 3,525 hotels, with almost 492,400 rooms across 120 countries and territories, including 28 countries and regions where it currently has no running hotels. For 2024, the company expects net unit growth in the range of 7-7.5%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
