Hasbro Slashing 1,000 Jobs, Leadership Changes
Thursday, January 26, 2023
Hasbro, Inc. announced on Thursday leadership and organizational changes, including the elimination of approximately 15% of its global workforce this year. The reductions will start to take effect within the next several weeks.
The cuts will impact about 1,000 employees. It is unknown how many Rhode Islanders will lose their jobs.
With these actions, along with ongoing systems and supply chain investments, the Company is on track to achieve its goal of $250-300M in annual run-rate cost savings by year-end 2025 to drive profitability and reinvestment in core brand growth.
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The stock has plummeted. The stock closed Thursday at $63.78, down 39% from its 52-week high of $105.13.
"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."
Fourth Quarter 2022 Selected Preliminary Results
According to the company, preliminary fourth quarter 2022 revenue of approximately $1.68 billion, down 17% year-over-year, down approximately 14% in constant currency.
Wizards of the Coast and Digital Gaming segment revenue of approximately $339 million, up 22% year-over-year; Consumer Products segment revenue of approximately $1.0 billion, down 26% year-over-year; and Entertainment segment revenue of approximately $335 million, down 12% year-over-year.
Preliminary operating loss margin of 8.3% to 7.5%; Preliminary adjusted operating profit margin of 15.8% to 16.0%, excluding total pre-tax charges of approximately $300 million associated with changes in entertainment and business plans as part of the Blueprint 2.0 strategy, approximately $21 million in pre-tax charges related to amortization of costs from the eOne acquisition, and cash charges of approximately $78 million associated with workforce reductions and related fees associated with the execution of the Blueprint 2.0 strategy.
Preliminary earnings loss per share of $1.00 to $0.93; Preliminary adjusted earnings per diluted share of $1.29 to $1.31, excluding the impact of the charges set forth above.
Full-Year 2022 Selected Preliminary Results
Preliminary full-year 2022 revenue of approximately $5.86 billion, down 9% year-over-year; down approximately 6% in constant currency.
Wizards of the Coast and Digital Gaming segment revenue of approximately $1.33 billion, up 3% year-over-year; Consumer Products segment revenue of approximately $3.57 billion, down 10% year-over-year; and Entertainment segment revenue of approximately $959 million, down 17% year-over-year and down 12% excluding $65 million of revenue associated with the music business which was sold in 2021.
Preliminary operating profit margin of 6.7% to 7.0%; Preliminary adjusted operating profit margin of 15.7% to 15.8%, excluding total pre-tax charges of approximately $520 million, including the Q4 charges described above and $120 million recognized through the third quarter 2022.
Preliminary earnings per diluted share of $1.40 to $1.46; Preliminary adjusted earnings per diluted share of $4.43 to $4.45, excluding the impact of the charges set forth above.
Leadership and Organizational Changes
As part of these organizational and commercial changes, Eric Nyman, president and chief operating officer, is departing Hasbro. At this time, the Consumer Products business will report directly to the CEO.
"We are grateful for Eric’s dedication to Hasbro over the last 18 years and the leadership he has provided. On behalf of everyone at Hasbro, we wish him well in his future endeavors," said Cocks.
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