Toy Maker Hasbro Eyes Cost Savings; Cuts FY22 Sales Outlook

  • Hasbro Inc HAS hosted its first investor day under the leadership of CEO Chris Cocks.
  • HAS is implementing an Operational Excellence program designed to deliver $250 million - $300 million in run-rate cost savings over the next three years, with $150 million expected in run-rate savings by year-end 2023.
  • HAS remains on track to return to its 2.0 to 2.5X gross debt to EBITDA target in 2023. It also intends to return excess cash to shareholders through its long-standing dividend and a future share repurchase program. 
  • Outlook: HAS expects a Q3 revenue decline of approximately 15% as reported and approximately 12% at constant currency, with operating profit impacted more significantly due to the mix of revenue being different than last year.
  • For 2022, HAS sees revenue to be flat -slightly down in the constant currency (prior view low-single-digit revenue growth on a CC basis).
  • For FY27, Hasbro sees mid-single digit revenue CAGR leading to $8.5 billion or greater in revenue.
  • HAS predicts operating profit growth of 50% over the next three years, with plans to further expand the operating profit margin to 20% by 2027.
  • Price Action: HAS shares are trading higher by 1.42% at $69.96 on the last check Tuesday.
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