Chris Cocks

Thanks, Kareen, and good morning. Q3. We continued to demonstrate the bottom-line benefits of the structural and strategic changes we are making. It has grown to have our strongest profit areas. Gains in licensing outperformed, expanding operating profit margin for the third consecutive quarter. Dynamics were observing across Magic and D&D in both analogue in digital. I'll reinforce our confidence in the long-term health of the brands. Our competitive advantage as an IT licensor is also gaining steam as we see the staying power of Monaco, the resurgence of fan favourite brands like My Little Pony and strong POS growth in our out-license toy portfolio. Consumer products revenue came in lighter than we anticipated, offset by strength in wizards, but the pace of the decline moderated significantly versus the first half. We should see that trend continue into Q4. We're already seeing some encouraging data points across toys and board games that prove our innovation is getting sharper and retail alignment is healthy. While we are lowering our full year revenue guidance for the segment, we are seeing a solid return to profitability for this business and improving bottom line, coupled with strong fundamentals across the balance of our portfolio, auger much improved profitability and cash flow for Hasbro, both in 2024 and beyond. This resilience in our business model has been years in the making strategically shifting our mix towards games, digital and IP licensing the future of play. This is where the consumer is heading, and we're following our fans as they age up and look for their favorite brands on digital platforms. It's what will make has, oh, a diversified, modern, growing toy and game company. Gina will walk through more of the financials and our latest outlook, but first, I'll offer some business insights. Magic the gathering continues to be a standout leading the trading card genre in growth year to date. This is despite big shoes to fill from last year's blockbuster Lord of the Rings set in Q3, Magic posted another quarter of growth led by our tentpole releases, Bloomberg and a horror themed desk more. Show knowing how Magic original IP consistently delight stands. Arena also posted solid growth driven by Bloomberg ROE and healthy engagement with the standard format. With sequential upticks in new player acquisition rates and weekly average user accounts. Beyond this strengthen tentpole sets, we thought outperformance in backlist, particularly Commander Dex as well as secret there, including a sold-out festival in a box ahead of this weekend's Magic con in Las Vegas. It's shaping up to be our biggest one yet and should be chock full of exciting new product announcements like the one we just did at New York Comic-Con with our partners at Marvell coming in December. Magic fans can get the first cards from our new collaboration with Marvel featuring themed secret layer drops for five of their favourite Marvel superheroes, including Iron Man, Black Panther and Wolverine. We are expecting each many sets to immediately sell out for D and D. The updated players handbook for Fifth Edition is now our fastest selling product in DND.s 50-year history, leading plan by over 50% and our acquisition of D. and D. beyond and continues to pay off driving DND.s total mix of direct-to-consumer revenue from zero at the time of acquisition to 60% today, with registered users more than doubling to $19 million. I'm excited for fans to get their hands on the new Dungeon & Fighter's guide releasing next month. The new artwork if they hit and the Streamline introduction to running campaigns has been met with stellar early reviews, licensing continuing to be a bright spot across Hasbro monopoly go is settling into a steady-state, generating approximately $10 million in licensing revenue per month, our partners and scope. We are continuing to innovate with new formats, including third party content from Marvel and Tycoon club. A new loyalty program to better serve its community, have dedicated defense working with a best-in-class partner as a lasting mobile game at scale. And the team remains focused on driving user acquisition and retention within consumer products Licensing, our strategy to out-license brands in the toy space is performing ahead of expectations year to date for real friends and Littlest Pet Shop to recent out-license properties are showing over 50% year over year. POS growth building on last quarter's strength. My little pony is having a resurgence through successful international partnerships across multiple merchandise categories, music and collectible cards. And we continue to roll out some great products across platforms in partnership with LEGO. For instance, LEGO Peppa Duplo is now available all in all markets. We also saw the release of the Lego icons Bumblebee skew ahead of our transformers one movie release as part of Legos adults. Welcome marketing campaign for Q4. Total revenue softness was due in part to our decision to sell less closeout volume in favor of higher profitability as well as incremental softness in action figures, particularly Star Wars. We view action figures is a long term that for the company and a place has ROE has special strength from preschoolers to kids to adults fans. So we are bullish about this segment's eventual return to growth. one of our bigger bets for this holidays, Beyblade, which launch since which launched its fourth generation Beyblade ex over the summer. Since turning on media, just a few weeks ago, we've seen POS accelerate meaningfully with promotional events at our top retail customers and expect that to continue with the new anime series on Netflix and Disney. While we initially expected a bigger POS turn into they've laid in Q3, we're excited to see it responds favorably in recent weeks and expect a strong ramp as awareness scales with kids. Marvell is also seeing some nice increases on the heels of Deadpool and Wolverine, the new action and 97 animated series and continued strength with spiky, and it's amazing friends, including our new Head, preschool toys, dancing cross body. We're excited for 2025 with new Captain America and fantastic for blockbuster films on the horizon and building hype for disease blockbuster 2026 lineup, including Avengers, doomsday, a new Spider-Man and a new man, Lorraine and grow new Star Wars film, how much by blockbuster Director John fabric Plato had its best back-to-school ever with POS up almost 20%, and the classic colour four-pack rising to the number one position across the entire arts and crafts category. We're seeing good early momentum for the people delivery scooter with strong top toy placement at our major retail partners. We also have some exciting innovation for PeP obtains with money petals Peppa, a top toy at Walmart and Amazon. Last but not least, our board game portfolio is one of the earliest examples of our new focus on fast to market innovation across consumer segments, whether it's our new monopoly, Harry Potter board game for family, please life and retire the new award-winning strategy game are smell owes a best-selling adult card game from Germany. We are partnering with for international expansion, has rose, delivering delightful new products that are getting consumer attention and driving new sales. Combined, we are pairing our new products with significant expansions at the in-store promotions while boosting advertising year over year for our innovation that's to drive consumer demand. It's still early in holiday, but we anticipate continued improvement in our business as we build the foundation for continued profit growth in 2025 and 2026 to re-cap. I'm pleased with our has rose, executing our margins are up. Our inventories are down and the healthiest they've been in seven years. Our cost structure is getting where we needed to be in our toys are showing up on shelf the best they have in years. Our key initiatives around digital licensing and reinvigorating our product innovation. Our base bring fruit as we meet bands where they are. While we are still mid innings in our toy turnaround 2024 promises to show a significant uptick in profit, cash flow and operational rigor for the Company that will set us up for 2025 and beyond. I'd now like to turn the call over to Gina getter to share more on our results and what you should expect for the balance of the year. Gena.

Gina Goetter

Thanks, Chris, and good morning, everyone. Our Q3 results demonstrated the increasing resilience has for our business model, underpinned by the strength in gaming and licensing, Cloudflare revenue fell short of expectations. We still saw a significant moderation in the decline as compared to the first half, while achieving the highest operating margin for this segment in three years. Between strengthen reserves, licensing performance and improvement in the underlying profitability of toys and encouraged by the healthier position has really been today versus this started the year. The outperformance in our within segment has proven that our leadership position in trading tie-ins role-playing in digital licensing continues to resonate Magic, delivering all around solid quarter across cable, capped in digital for both can pull in backlist content. Consumer product licensing was a bright spot in the second straight quarter, given by My Little Pony training time and a notable driver behind the CP. operating margin expansion. Our supply chain team delivered once again finding additional productivity wins. While our inventory has remained at multiyear lows, down 40% year over year. Our strategic decision to keep supply tight has resulted in a significant drop in close that volume, which continues to be a gross margin benefit at the expense of CT. revenue. This is a trade-off we are consciously making as we continue prioritizing restoration of 20 profitability while sharpening our innovation and to drive premium offerings to our retail partners. Staying disciplined with our inventory across all our businesses is the right long-term decision for the Company paid also heightened the importance of accurate demand forecasting and supply chain agility. As we continue to upgrade our processes and systems, we are focused on strengthening that muscle to ensure we have adequate supply to products. Customers want as part of our transformation, we continue to look for opportunities to improve operational efficiency. As an example, we recently announced that within the CP. segment, our global brand and commercial teams will be coming together as one organization under the leadership of 10 Kelton. We are also expanding our design team scope further integrating in with our supply chain and product development team in Asia. By bringing the design process, it's closer to the source. We can bring products to market faster and allocate resources more efficiently across our portfolio. A continuous improvement mindset is a key component of our broader transformation, and we will remain agile in adapting processes and structures to best meet the needs of all our stakeholders. Now moving to our Q3 financial results. Total Hasbro revenue was $1.3 billion, down 15% versus Q3 of last year. If you exclude the impact of the E1 divestiture, total revenue was down 9%. The wizard segment declined 5% in the quarter as we lap the launch of Father's Day three. Consumer products revenue declined 10%, driven by exited brands reduced close outs in softer than anticipated. Volume and entertainment segment declined 86% due to the E1 divestiture. Again, absent this impact, given by deal timing, adjusted operating profit was $329 million for an adjusted operating margin of 25.7%, up 2.9 points versus last year. Benefit from favorable business mix, supply chain productivity and reduced expenses were partially offset by volume deleverage within consumer products. Q3 adjusted net earnings were $244 million, with diluted earnings per share of $1.73, up $0.09 from the year ago period. Driven by the factors previously noted, we returned $98 million to shareholders through the dividend and ended the period with $1.2 billion of cash and short-term investments, including the proceeds from the net debt offering, which will be used to be paid on November 2024 notes. Year to date, total Hasbro revenue was approximately $3 billion, down the 18% versus the same period last year. If you exclude the impact of the E1 divestiture, total revenue was down 8%, largely driven by the same drivers of Q3. Year to date, adjusted operating profit was $726 million for an adjusted operating margin of 23.9%, up approximately 10 points year over year. We continue to deliver margin improvement despite the volume deleverage across the toy business. Year-to-date adjusted net earnings were $498 million, with diluted earnings per share of $3.56. And year-to-date operating cash flow was $588 million, a $253 million improvement year over year, driven by the noted profitability improvements and working capital favourability. Now let's look at Q3 results within our two major segments. Starting with Blizzard. Revenue declined 5% as growth in magic the gathering and contributions from monopoly go for more than offset by the anticipated decline in revenue for Ball. There's cake three Magic grew 3% behind the releases of Bloom barrel Endesa mine, along with stronger results from backlist in secret there. Operating margin for wizards finished at 44.9%, down about three points versus last year, driven entirely by the decline in license digital gaming. Turning to Consumer Products. Overall Q3 revenue declined 10%, lower volumes from exited brands and reduce close-outs asset growth in license consumer products and volume increases in select brands like Transformers Dave laid in Furby, continued softness in nerve and action figures, particularly Star Wars, also contributed to the decline in the quarter. As we've mentioned, we are continuing to prioritize profitable revenue while up our closeout volume was down about 70% year-over-year and contributed to about a fourth of the revenue decline for CPA. drove about 1.5 points of gross margin benefit. Adjusted operating margin to Consumer Products was 15.1%, up 3.9 points compared to last year. Benefits from a more profitable licensing mix, supply chain productivity, fewer closeouts and reduced expenses offset the impact from volume deleverage. On a year-to-date basis, despite the top-line declining by over $300 million versus last year, we have absorbed the impact of deleverage in hep CP. operating profit essentially flat. This highlights. The significant progress we have already made in our turnaround in is a testament to our supply chain transformation and discipline and inventory and cost management. Now turning to our guidance for 2024, we now expect total reserves revenue to be flat to down 1%, which is up from our prior guidance of down 1% to 3%. The improved outlook is driven by year to date, our performance, particularly within Magic, our outlook for license digital gaming largely remains the same with monopoly go contributing roughly $105 million in revenue. We expect volume to a three to contribute about $35 million for the full year, with most of that revenue recorded in the first three quarters as implied in our guidance, Q4, we'll see a more pronounced year over year decline driven by the timing of releases for Magic. We continue to expect wizard operating margin to be approximately 42%. This guidance also implies a step down in margin for Q4, entirely due to the planned revenue deleverage for consumer products, we now expect revenue will be down at 12%, to 14% compared to our prior guidance range of down 7% to 11%. This change is partly a result of the Q3 shortfall as well as reduced forecast for close at volume and action figures in the upcoming quarter. As implied in our guidance, we expect Q4 to see a continued moderation in the pace of decline as we aim to stabilize the CP. business. We maintain our adjusted operating margin guidance of 4%, to 6%. While this implies a quarterly step down in Q4 margin, we should see significant year over year margin expansion as we lap last year's inventory cleanup efforts for entertainment. Adjusting for the impact of the E. one divestiture, we continue to expect revenue to be down approximately $15 million versus last year and adjusted operating margin of roughly 60%. We remain on track towards our target of $750 million of gross cost savings through 2025 and continue to expect 200 to $250 million of net cost savings in 2024. Through the first nine months of the year, we had delivered $240 million of gross cost savings and $177 million of net savings. Our total has real adjusted EBITDA guidance remains unchanged in the range of $975 million to 1,000,000,025. And given the improvement in our cash flow, we now expect 2024 ending cash to be above at year end 2023 levels. From a capital allocation standpoint, our priorities remain to first, invest that core business. Second is to return cash to shareholders via the dividend. And third, continue progressing towards our long-term leverage targets and pay down debt. And with that, we can open the line for questions.

Question and Answer Session

Operator

Thank you. It feels like to ask a question, please press star one on your telephone keypad. You mentioned talent indicate your line is in the question queue, you may press star two. If you'd like to remove your question from the queue. And For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We ask that you please limit to one question and one follow-up question. one moment while we poll for questions. Our first question is from Drew Crum with Stifel. Please proceed.

Drew Crum

Thanks. Good morning. I have a couple of questions on monopoly go. I think you guys suggested recently have you had better line of sight on scope, please plans for UA spend and that you believe that marketing as a percentage of revenue would come in at the high end of a range of 25% to 35% the third-party data, however, suggests that downloads have continued to fall precipitously. So can you reconcile the two, $10 million royalty revenue per month pipe cadence, but just want to make sure that's still reasonable going forward. And then can you address how the launch of monopoly goes web store and presumably lower platform fees will affect royalty revenue that flows to help grow going forward? Thanks.

Chris Cocks

Andrew. Good morning. I'll start and then G&A console and the details. So our implied guidance on about $10 million a month in terms of royalty revenue, just kind of like basically takes into account all the various variables from what their gross revenue is, what the rev share is with the store or what they're able to drive themselves the or something like Tycoon club. And then last but not least, what we anticipate there UA spend will be based on the data that we've seen in that we can share because we have to respect scope. We have a third-party partner and they have their own disclosure. We see pretty healthy UA rates. We see a good KBI.'s in terms of the cost per install, which we think is a testament to the strength and ubiquity of the monopoly brand. And we're seeing very strong engagement among their existing consumers and reengagement among lapsed consumers. And so, all that factors into what we believe will be a fairly steady revenue stream for us for many months to come from that.

Gina Goetter

Manager. I'll just add a colour. The decay rate or permanent decay rate. We did see it stabilize as we move through the quarter. So that was that was not as volatile as we've seen or that is bouncing around as we've seen in previous in previous quarters. And then promote marketing an expense standpoint. Remember, last quarter we talked about spending within that range as 25% to 35% in I indicated that we were going to be probably on the higher end of that range. We absolutely saw that play through as we move through the quarter. So do you think about our guide for that year of that $105 million at? We're sticking with that same outlook on the decay rates up beyond moderated decay rate and that higher end of that range of marketing spend as a $30 million of revenue 10, is per month in Q3. And that's what we're anticipating for Q4.

Chris Cocks

The only other thing I'd add, Drew, just as a like kind of part two of your question is more successful. They are with initiatives like Titan club of the higher the potential revenue as the US again now that we're hearing them on. Okay. Makes sense. Thanks, guys.

Operator

I think our next question is from Maggie and Alexander with Morgan Stanley. Please proceed.

Maggie McGoldrick, CFP

Hey, good morning. Thanks for taking our questions. I wanted to start with the change in the Consumer Products Guide and understanding that 3Q, it's a little bit worse. They think it does imply in oh four came down mid-single digits or so. Seems like there's some puts and takes that maybe lower closeout volumes, but and maybe a little bit weak CARPLS. Maybe you can just help us understand what some that it as it relates to PLS, maybe versus what you're seeing today. And I ask because I think you're wrapping a pretty sizable top line headwind in the fourth quarter from some of the inventory actions last year. So just trying to understand how that kind of down six ish implied for the fourth quarter as it relates to what you're expecting from a purely PLS perspective.

Gina Goetter

Good question and good morning, but let's take that the guide down in pieces. So roughly at the midpoint, it represents about a, $100 million of revenue. About half of that is due to close out volume as so as not chasing bad deals or unprofitable deals. Over half of that that that is close-outs, then there's probably another 30% to 40% of that bucket that is associated with our entertainment back brands, primarily Star Wars. We really saw that play through in Super. It didn't. It didn't kind of live up to the estimates that we had in the month in September, and we took that trend and took it forward into our into our Q4 outlook. And then the last piece of the call, Dan, is really what we would call our growing pains as we move into this leaner inventory restructure, tighter supply planning processes at more rigor on our demand planning forecast. There were just send some places where our execution wasn't as tight as we wanted it to be to do that big three buckets that that kind of cause the call down. In terms of your plan POS, we really haven't seen a material change in outlook as we move through the quarter or through Q4. So that really wasn't a piece of why we called it down. It was more of what we are seeing play through in close outs in Star Wars and then and then it's execution moments.

Chris Cocks

Yes, Maggie, the only thing I would add is when you look at the mix of our products and our expectations for sales through our quote, unquote, good toy volume. So our non-discounted volume we anticipate will be flat to up in Q4 are discounted toy volume will be down quite significantly. And I think year to date, it's our total volume is down like 70% on a discounted volume.

Gina Goetter

Yes, when you look at our total revenue called like decline on CP., almost a third of it is because of close out on close our revenue. So much more profitable for us, obviously. But a headwind on the top line.

Maggie McGoldrick, CFP

Okay. That's really helpful. Thank you. And then yes, maybe I'll just ask about the CP. margin to what was there anything one-time in the third quarter performance? And that's obviously very strong despite the top-line decline. And based on what you're telling me, it seems like you should continue to kind of have that mix effect of lower closed down in the fourth quarter. So looking at like what's implied in the fourth quarter versus, I guess what a typical seasonality would suggest top line getting better? Or just trying to understand whether there's some conservatism implied in the fourth quarter margin guide or whether there were something we should be aware of in 3Q that won't repeat in the fourth quarter.

Gina Goetter

Got it. Yes, there was nothing a good question. There's nothing one-time in nature in the Q3 margin is actually quite a healthy inside that top line aside, it was quite a healthy underpinning in all of the improvements that we're making within the supply chain. You could really you can really see that come through the P&L in terms of the year to go in the Q4 margin, a couple of things. Even one, our royalty expense picks up in Q4. Just when you think of our mix of business and where it's coming from, there's higher royalty in the baby, the transformers, et cetera. And then the second piece is we are lapping is all of this event happens within manage expenses related to bonus replenishment, et cetera. We are lapping that at that kind of called out in Q4 of last year. We replenish this year. So those are the big two things that are probably a typical that you should be factoring in.

Operator

Our next question is from Christoph Hilpert with JPMorgan Chase. Please proceed.

Christoph Hilpert

Thanks. Good morning. So my first question is a follow up on the CP. outlook should think about the third and fourth quarter. How much how much of the impact was from the exited brands in terms of how the inputs of 3Q and what the underlying sort of rate of the businesses projected for the fourth quarter at?

Gina Goetter

Yes, good question. So about two points are best, call it, 30 ish, 20 ish, $25 million ish for has my precise math was due to the exited brands in the third quarter. Sorry, I missed it. What was the second part of your question? I missed it.

Christoph Hilpert

Is there any in the fourth quarter.

Gina Goetter

Yes, about the same amount in the fourth quarter as well. I guess, the good news as we move into next year 2025 which we done talking about impact because I think the bulk of it will be behind us.

Christoph Hilpert

Yes, in a way to understand how we recognize revenue on those because they're not really exited there just outsource to other interested parties, and they're actually growing quite healthily this year were basically recognizing the MG.'s associated with those deals and those are relatively modest next year. By the end of the year, we should be based on the place at which they're going. We should be kind of flowing through real-time, a fairly healthy royalty rate on those, which is well above what the operating profit margin would have been when we were operating them ourselves.

Chris Cocks

Understood. And then thinking about the monopoly go, Christian's previously spoken about in this game is going to last and benefit Hasbro for a long time. Part of that masked was like that decay rate versus advertising coming down. You talked about for this $10 million run rate for many months to come. I guess as it is it fair to say that the original expectation has been maintained, i.e., there won't be some sort of precipitous drop as we look out a year from now and think about the back half of 25?

Christoph Hilpert

Yes. I would think a monopoly go in 2025 would be flat to up versus what we realized in 2024.

Gina Goetter

Yes. Chris, keep in mind that we have one additional quarter of next year where we didn't have them in lung that we weren't we weren't surpassing the minimum guarantee.

Operator

Our next question is from Eric Handler with Roth Capital. Please proceed.

Eric Handler

Good morning. Thanks for the question. It looks like the legs for builders gave three is much healthier than originally anticipated at the start of the year. I wonder if you could talk about your relationship with Clarion and how you can keep this momentum with this game continuing to flow on evergreen basis?

Chris Cocks

Yes. I think the best comp for looking at how Larry and we'll manage Father's Day three is what they've done with the Definity franchise. And that franchise has enjoyed incredible lags a really long held detail, Larry. And as a publisher tends to be very community friendly. They tend to not to discount their products and they tend to do kind of like special editions and special content drops to keep kind of refreshing things with the consumer. We would anticipate that they would treat Balder skate in a very similar manner. They've been great partners and, you know, I don't think boulders gave three will be quite the annuity. It was this year. We enjoyed like $35 million, which was pretty healthy, but we will continue to make money off of Borders gave three for several years to come.

Eric Handler

Okay. And then I guess, Gino, you're originally expected Magic decline for the year. Given the outperformance seen in the third quarter. Do you still think Magic declines a little bit for the year?

Gina Goetter

Yes, just given what's going to happen in the fourth quarter. So, we've talked about we don't have a comp in the fourth quarter for the loaded the rains holidays that So you're right, Magic has outperformed our expectations in the first three quarters. But Q4, there is just the reality of set timing and that holiday sets that will be there. But as we look to 2025, that starts to even or is that even back out?

Chris Cocks

Yes, it's tough to bet against magic. It has nice long leg gas and 25 will be great.

Operator

Our next question is from Alastair Borthwick with Bank of America. Please proceed.

Alastair Borthwick

Hi, thanks for taking my questions here. I guess I wanted to ask some more line of question on the sort of 4Q implied guide for the answer to the coast. So I think of sort of implies revenue down 20 plus percent the fourth quarter. I guess what would drive that? Is that all just the sort of magic shortfall versus though what are the rigs holiday set lap last year? And then can you maybe just talk through the step down in the Wizards op margin, our guide, which I think implies sort of in the 20s in the fourth quarter, is that entirely sort of volume deleverage on the Wizards? Thanks.

Gina Goetter

Yes, Good morning, Alastair you nailed it in terms of what is what's causing that pulled on in both the top and the margin. It really is related to this magic, as said, timing, that when you look at the digital portfolio is relatively flat year over year. So you had, but the benefit from Boulders Gate Last year, this year, you had the benefit from monopoly go to anything at the margin and what's pulling that down? It's all that delever impact of the magic Magic volume.

Chris Cocks

Yes. From a top-line perspective, you have two things going on with Magic versus there is a fairly sizable second bite at the at the Lord of the Rings Apple in December of last year. And then the second thing to be thinking about is the timing of our January sets, depending on what time of year that happens, we have to sell in to our distributors at a different time. So our big kind of remastered set for January is going to be a bit later next year. So we're not going to see that sell in until likely next fiscal year.

Alastair Borthwick

Perfect. Incredibly helpful. Best of luck going forward.

Gina Goetter

Thanks.

Operator

Our next question is from Pankaj Chin with UBS. Please proceed.

Hi, good morning. Thanks so much for taking my question on. I was just looking at your operating profit margin for year to date, it's running north of 23%, I guess almost 24% to be exact. So then you for almost has to be worse than 11% or so for all the pieces to work together after came in after Q3, came in so strongly for you kind of not to hit the 19.5, 20% for the year. And I understand the high-margin gaming would be lower on there's a huge sort of revenue drivers there. But like other, are there any puts and takes? And I guess I'm trying to understand the full year implied operating profit guide a little bit better than other credit yet.

Gina Goetter

Got it. Good morning. Yes, we are within spitting distance of that, that magic at 20%, 20% threshold. And to your point, the overall company margin does give back in the fourth quarter. I mean, there's two pieces for that one. When you look at our mix of business in the fourth quarter, it goes heavier toys versus wizard. Let's just that's just the nature of it, and that mix created a bit of a margin drag. And then the second piece you hit on in your in your question, it is the dealer adds the deleverage impact that we're seeing play through the Wizards P&L. So those are the two pieces that now that kind of caused that pull back in Q4.

Okay. Thank you. Then I was wondering if you could give us an overall POS read each year to date and what that was excluding all the licensing exit for you and the licenses that you gave output this POS for the quarter? And then can you update us on what you expect for the interest street in terms of POS for this year? Seems like you usually include that in the release. And I think I guess maybe I didn't see it was not in the release this morning. I'm just trying to understand whether there's any change to your expectations. Thank you.

Chris Cocks

Yes. So, when we think two building blocks because building blocks is a kind of doing different than the rest of the toy industry. When you look at the toy industry X building blocks, it's effectively down low, maybe on the lower end of mid-single digit, low, low single digits to low mid-single digits. So call it down to down 5%. Our expectation is that holiday will probably continue that trend. That will be down probably low single digits, maybe on the lower side of down mid single digits. That's kind of factored into our full-year guidance. And really our expectations haven't changed materially on that front. In terms of our POS. rate year to date were down high single digits. Ex our divested brands. We expect that to get incrementally better in Q4 just based on the newness on the advertising in the rate of promotions we have our number of in-store promotions is up quite significantly, particularly at our mass partners. Our share is up inside of our e-commerce partners. I think our products are much better positioned to do is go into a Target or Wal-Mart and look at our pricing and look at our showing up on shelf. So, we expect continued improvement in kind of how we're showing up and how we're selling through.

Operator

Our next question is from James Hardiman with at Citigroup. Please proceed.

Sean Tierney

Good morning. This is Sean Rooney on for James Hardiman. I'm curious about your expectations for the holiday season and how would you characterize retailer sentiment ahead of the holidays? And then also, could you just talk about what brands are most excited about for the fourth quarter?

Chris Cocks

Hey, good morning, Sean. I'll start with that, and the breadth Gino will fill in some blanks. So, as I talked with our P&A, our general expectation is that the toy industry will be down modestly in Q4 as building blocks perhaps with building block. So it will be roughly flat to maybe down a percentage of percentage or so. And you know, in terms of asking me for my favorite brands, gas, that stuff you're going to get me in trouble with all of our teams outside here, we certainly feel great about our Platos been positioned. It had a fantastic back to school. You know, we have the new Platos scooter. We have our new Marvel collaboration with Plato, both of which are doing really, really well. I think they've laid access is starting to take off. We saw nice early pop with like fan audiences in early Q2 three, and we're starting to see it take off with like the new animated series and the advertising with kids that branded fantastically in Japan when it launched last year. And we we expect it to be a nice mover for us this year. Transformers one has seen a nice pop since the movie. We expect another nice one within the home video and streaming window opens up before the holiday period ends. Marvell is seeing some nice increases increases, whether it's preschoolers, lighting is amazing friends or kind of what we're seeing on the core line. There's been some nice content there. Our board game portfolio, I think, has rarely been better than it is now. We've got basically products for everyone. Then as you know me, I'm a super fan at Wizards and I love what they're doing with the revisions to Fifth Edition and some of the new content we have coming out for Magic. I'll be in the queue for that Marvell Magic secret, where that's coming out in December. And hopefully we'll be able to pick up all fibber leases.

Gina Goetter

I don't think that answer. I think you covered all your basis with an answer. I don't think anybody in our teams have been at it and I will tell you is detailed in IDT's Hanfeng, Andrea sustainability. I have a lot of nieces and nephews that are under the age of five and the biggest hits in when I when I come home and visit them Plato. So all of the offerings in Plato inside, I think they're all getting the scooters for Christmas, but don't tell them they don't listen to the call and then Marvel and the offering all the from the toys, the role-playing, all of it on Marvell is a big hit in my household that I visit to the first part of your question on the retail sentiment really unchanged, get continuing to get really good support from our retail partners and getting ready for this upcoming holiday. So I may have gotten in trouble with my teams, but you took a better basis. Other Teleglobe. Nice amounted from releases.

Chris Cocks

Sorry, your second question Sean, are you if

Sean Tierney

I could also touch on the remaining cost savings opportunities, maybe on looking ahead to next year even on? And do you have any expectation on what that split might look like between cost of goods savings in OpEx savings going forward?

Gina Goetter

Yes. The question as we move through this year, a little more than half of our cost savings you have about 60% of our cost-saving has come from the supply chain with the balance of the savings coming really within all of our managed expense levers that we have as we move to next year, it it's probably shakes out more to be like 50 50 across those buckets. I yes, we continue to see opportunities within our supply chain. Next year will be the 1st year that you start to hear us talk about the design to value savings that start to play into the P&L. We've talked about that as a strategy. We really haven't realized any dollar benefit from that in this year. We'll start to realize that that next year we're continuing to refine our and our network, both with our suppliers and within our logistics network. Supply chain will continue to be a positive contributor for us next year. And then, of course, and that manage expense as a managed expense bucket, all of those continue to be refined, and we expect another steady year of savings from those.

Operator

Our next question is from highly potent you with Jefferies. Please proceed.

Good morning and thanks for taking my question. On your prepared remarks, you mentioned quite a bit of like innovation at Copley and that can your kind of been internal to them, but wondering if you could dig a little more Internet and have the feature of your relationship with them.

Chris Cocks

Yes. So, we have a long relationship with scope, believe that we do games with them based on Yahtzee on Scrabble. And most recently with monopoly. We're always talking with them about other aspects of our IP portfolio that we could work together on. And quite frankly, we'd be pretty excited on any future games they want to do. I think they're one of the best partners in the mobile space and mobile isn't for the faint of heart. It requires tremendous amount of capital. It requires a tremendous amount of publisher expertise and a huge, a CRM database to be able to leverage large audience. This is in free-to-play games. And so I think we count ourselves very lucky to have a partner as adapted them in terms of like the innovation they have. They're doing a lot of relief fund events in a monopoly go that I think is going to be very sticky and help to drive new audience engagement late. The latest Marvel collaboration they have, I think, is a great example of that. Just look at what we do on monopoly on shelf, whether it's Harry Potter are poking mine or Marvell or Barbie, you can imagine that scope Lee has the same scope of opportunities to be able to do that virtually for events. And I think that will be super super sticky. And then you know what they're doing with Tycoon club. That's a great way to kind of engage like you're at your top players, you're most sticky is your most engaged players and kind of shift the business model in a favorable way towards for as well because we make our money based on their native platform fees. So if their platform fees are lower, our overall royalty revenue is more positive for

It makes a lot of sense. And one, the Marvel Magic drop and happening do obviously expect the initial drop developed pretty much immediately. But curious how the size of this drop compares to the Lord of the rigs that obviously much smaller, but just anything directional or would be helpful. And then also in the future, would there be a Marvel release that's a similar size to Board of things?

Chris Cocks

oh, yes, yes. So, the secret layer drops will be in kind of like the you should anticipate it like low to mid-single digit millions of dollars per kind of release kind of roughly how you think about it. I think one of our most successful secret layers drops ever would have been like a seven or $8 million drop. These are very targeted. They have limited runs, and they tend to be in and out within hours, we had new, or Comic-Con announced the Spider-Man set, which will be the first major set we're doing with Marvel. We have multiple sets that will happen over the next wave of four or five years with Marvel. And you know, you can imagine what a Spider-Man and Spider reverse that might be able to do from a revenue perspective, looking at Magic next year, as we look out to 2025, Magic is going to be kind of a core part of our thesis in terms of top line growth. You know, we have we have Final Fantasy which will come out in June. We have the Spider-Man collaboration which will come out in the second half of the year, and then we have a third universes beyond that. We haven't yet announced yet. I believe that I think fans will also really be clamouring for by the end of the year. So, the future Magic looks pretty bright. And when magic of healthy.

Gina Goetter

Thank you its a good one.

Operator

with no further questions in the queue, this will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.