Hasbro (NASDAQ:HAS) Q4 2023 Earnings Conference Call February 13, 2024 8:30 AM ET

Company Participants

Kern Kapoor - Senior Vice President, Investor Relations

Chris Cocks - Chief Executive Officer and Director

Gina Goetter - Executive Vice President Chief Financial Officer

Conference Call Participants

Eric Handler - ROTH MKM

Christopher Horvers - JP Morgan

Arpine Kocharyan - UBS

Megan Alexander - Morgan Stanley

Andrew Uerkwitz - Jefferies

Jaime Katz - Morningstar

Jason Haas - Bank of America Merrill Lynch

Linda Weiser - D.A. Davidson

Stephen Laszczyk - Goldman Sachs

Operator

Good Morning. And welcome to Hasbro Fourth Quarter Full Year 2023 Earnings Conference Call. At this time, all parties will be in listen-only mode. [Operator instructions] Today's conference is being recorded.

If you have any objections, you may disconnect at this time. At this time, I'd like to turn the call over to Kern Kapoor, Senior Vice President of Investor Relations. Please go ahead.

Kern Kapoor

Thank you and good morning, everyone. Joining me today are Chris Cocks, Hasbro's Chief Executive Officer; and Gina Goetter, Hasbro's Chief Financial Officer. Today, we will begin with Chris and Gina providing commentary on the company's performance, and then we will take your questions. Our earnings release and presentation slides for today's call are posted on our Investor website.

The press release and presentation include information regarding non-GAAP adjustments and non-GAAP financial measures. Our call today will discuss certain adjusted measures, which exclude these non-GAAP adjustments. A reconciliation of GAAP to non-GAAP measures is included in the press release and presentation. Please note that whenever we discuss earnings per share, or EPS, we are referring to earnings per diluted share.

Before we begin, I would like to remind you that during this call and the question-and-answer session that follows, members of Hasbro management may make forward-looking statements concerning management's expectations, goals, objectives, and similar matters. There are many factors that could cause actual results or events to differ materially from the anticipated results or other expectations expressed in these forward-looking statements. These factors include those set forth in our annual report on Form 10-K, our most recent 10-Q, in today's press release, and in our other public disclosures. We undertake no obligation to update any forward-looking statements made today to reflect events or circumstances occurring after the date of this call.

I would now like to introduce Chris Cocks. Chris?

Chris Cocks

Thanks, Kern, and good morning, everyone. For more than a year now, you've heard me outline Hasbro's strategy to refocus on play behind a philosophy of Fewer, Bigger, Better. Fewer SKU’s that drive higher impact. Bigger investment behind winning brands in more focused categories. And Better innovation driven by a renewed leadership team and a focus on kids, parents, and fans, our consumers, the lifeblood of Hasbro. We laid out a blueprint for a more focused and profitable company with a number of growth initiatives built on a diverse portfolio of some of the most iconic brands in the toy and game industry. While business transformations take time, I'm pleased with how much we accomplished in 2023, setting the table for a 2024 punctuated by strong profit growth and momentum in renewing Hasbro's innovation engine. We're entering 2024 with a healthier balance sheet, a leaner cost structure, and an operational rigor that will maintain and build on these improvements in the quarters ahead. In 2023, we took substantial action to bolster our balance sheet. At the end of the year, we closed our deal with Lionsgate on eOne Film and TV, allowing us to focus our investments on higher return, play-focused initiatives across toys, games, and digital. Proceeds from the deal allowed us to reduce our debt by approximately $400 million. As we shipped our entertainment strategy to an asset light and partner-led model, we took a $1 billion impairment, a noncash item in Q4, which reflects the sale of eOne, and a change in outlook for the balance of our own and operated production efforts.