Hasbro's Q4 results trump estimates, unveils mid-term guidance; shares jump

Investing.com -- Hasbro (NASDAQ:HAS) reported fourth-quarter earnings and revenue that beat analyst expectations. They also offered in-line guidance and a new strategic plan, all compounding and leading to a stock rise of 12.3%.

The toymaker posted earnings per share (EPS) of $0.46, topping analysts' estimate of $0.36.

Revenue for the quarter declined 15% year-over-year to $1.1 billion, but was still above the consensus expectation of $1.02 billion.

The company reported an adjusted operating margin of 10.2%, above the projected 8.61%.

The Board also declared a quarterly cash dividend of $0.70 per share, payable on March 12.

“I’m proud of our team for delivering what we promised in 2024: we grew in games and licensing, stepped up our operational efficiency, and vastly improved the performance of our toy business,” said Chris Cocks, CEO of Hasbro.

“In 2025, we’re excited to bring a stellar lineup of toys and games to fans, expanding the reach of our IP through outstanding partnerships while we continue to focus on operational rigor and anticipating the future of play.”

For 2025, Hasbro expects total revenue to see slight growth in constant currency. The company forecasts an adjusted operating margin between 21% and 22% and adjusted EBITDA in the range of $1.1 billion to $1.15 billion, in line with the analyst estimate of $1.12 billion. The guidance factors in the expected impact of US tariffs.

Hasbro also said it is targeting an average mid-single-digit revenue growth rate through 2027 and has introduced a new strategic plan.

Between 2025 and 2027, the company aims for mid-single-digit revenue growth at a constant currency compound annual growth rate (CAGR), $1 billion in gross cost savings, and an annual adjusted operating margin expansion of 50 to 100 basis points.

It also plans to achieve a capital allocation target of 2.5x gross debt to adjusted EBITDA by 2026.

As part of its long-term strategy, Hasbro introduced "Playing to Win," a plan running through 2027.

The strategy focuses on strengthening profitable franchises, appealing to fans aged 13 and older, expanding into new segments such as girls' toys and emerging markets, investing in video game development, and broadening retail partnerships.

“Through play-fueled engagement and partner-scaled co-investment, Hasbro will seek to expand its reach from over 500 million kids, families, and fans today to over 750 million by 2027,” Hasbro said in the announcement.

In other recent news, Hasbro and Mattel Inc (NASDAQ:MAT) announced a licensing collaboration of their PLAY-DOH and Barbie lines. The new PLAY-DOH Barbie collection will be sold by Hasbro in June 2025.

In response to the report, Morgan Stanley (NYSE:MS) analyst Megan Alexander Clapp offered no change in a price target of $88.00 and an Overweight rating iterating confidence in the Q4 results and that guidance was "more than meets the eye."

Clapp continued, "Overall, a strong broad-based 4Q beat with $0.46 in EPS ~30% above the Street's $0.35 with better-than-expected top-and-bottom line performance across both key segments. The consumer products revenue upside (down 1% vs. Street down ~5%) was particularly notable, in our view, and should drive incremental confidence in the turnaround of the toy business."

(Vahid Karaahmetovic also contributed to this article)

This article first appeared in Investing.com