Hasbro 10-Q 2025-03-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________

FORM 10-Q

__________________

(Mark One)

For the quarterly period ended March 30, 2025

or

Commission File Number 1-6682

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HASBRO, INC.

(Exact name of registrant as specified in its charter)

(401) 431-8697

Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [ ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [x] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No [x]

The number of shares of Common Stock, par value $.50 per share, outstanding as of April 24, 2025 was 140,129,383.

Hasbro, Inc.

Form 10-Q

For the Three Months Ended March 30, 2025

Special Note Regarding Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q (“Quarterly Report”) contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, which may be identified by the use of forward-looking words or phrases, include statements relating to: our business strategies and plans; products, gaming and entertainment; anticipated cost savings; expected debt repayments; expected impact of newly issued accounting pronouncements; and financial targets. Our actual actions or results may differ materially from those expected or anticipated in the forward-looking statements due to both known and unknown risks and uncertainties.

Factors that might cause such a difference include, but are not limited to:

• our ability to successfully implement and execute on our business strategy;

• our ability to successfully compete in the play industry and further develop our digital gaming, licensing business and partnerships;

• risks associated with the imposition, threat, or uncertainty of tariffs, including reciprocal or retaliatory tariffs, in markets in which we operate which could increase our product costs and other costs of doing business, result in higher prices of our products, impact consumer spending, lower our revenues and earnings and otherwise have an adverse impact on our business;

• our ability to transform our business and capabilities to address the changing global consumer landscape, including evolving demographics for our products and advancements in technology such as the use of artificial intelligence in the products and markets in which we operate;

• risks associated with international operations, such as: the imposition or threat of tariffs; conflict in territories in which we operate; currency conversion; currency fluctuations; quotas; shipping delays or difficulties; border adjustment taxes or other protectionist measures; and other challenges in the territories in which we operate;

• risks related to political, economic and public health conditions or regulatory changes in the markets in which we and our customers, partners, licensees, suppliers and manufacturers operate, such as inflation, fluctuating interest rates, tariffs, higher commodity prices, labor strikes, labor costs or transportation costs, or outbreaks of illness or disease, the occurrence of which could create work slowdowns, delays or shortages in production or shipment of products, increases in costs, reduced purchasing power or less discretionary income, or losses and delays in revenue and earnings;

• uncertain and unpredictable global and regional economic conditions impacting one or more of the markets in which we sell products, which can negatively impact our customers and consumers, result in lower employment levels, consumer disposable income, retailer inventories and spending, including lower spending on purchases of our products;

• our ability to design, develop, manufacture, and ship products on a timely, cost-effective and profitable basis;

• the concentration of our customers, potentially increasing the negative impact to our business of difficulties experienced by any of our customers or changes in their purchasing or selling patterns;

• our dependence on third party relationships, including with third party partners, manufacturers, distributors, studios, content producers, licensors, licensees, and outsourcers, which creates reliance on others and loss of control;

• risks relating to the concentration of manufacturing for many of our products in the People’s Republic of China, which include the risks associated with increased tariffs imposed by China and the U.S., and our ability to successfully diversify sourcing of our products to reduce reliance on sources of supply in China;

• the success of our key partner brands, including the ability to secure, maintain and extend agreements with our key partners or the risk of delays, increased costs or difficulties associated with any of our or our partners’ planned digital applications or media initiatives;

• our ability to attract and retain talented and diverse employees, particularly following recent workforce reductions;

• our ability to realize the benefits of cost-savings and efficiency and/or revenue and operating profit enhancing initiatives;

• risks relating to the impairment and/or write-offs of businesses, products and content we acquire and/or produce;

• the risk that acquisitions, dispositions and other investments we complete may not provide us with the benefits we expect, or the realization of such benefits may be significantly delayed;

• our ability to protect our assets and intellectual property, including as a result of infringement, theft, misappropriation, cyber-attacks or other acts compromising the integrity of our assets or intellectual property;

• fluctuations in our business due to seasonality;

• the risk of product recalls or product liability suits and costs associated with product safety regulations;

• the impact of litigation or arbitration decisions or settlement actions;

• the bankruptcy or other lack of success of one or more of our significant retailers, licensees and other partners; and

• other risks and uncertainties as may be detailed in our public announcements and U.S. Securities and Exchange Commission (“SEC”) filings.

For a detailed discussion of these and other risks, uncertainties and factors, see Part I, Item 1A— “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 29, 2024 (the “2024 Annual Report”).

The statements contained herein are based on our current beliefs and expectations. We undertake no obligation to make any revisions to the forward-looking statements contained in this Form 10-Q or to update them to reflect events or circumstances occurring after the date of this Form 10-Q.

PART I. FINANCIAL INFORMATION

HASBRO, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(Millions of Dollars Except Share Data)

(Unaudited)

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(Millions of Dollars Except Per Share Data)

(Unaudited)

See accompanying condensed notes to consolidated financial statements.

HASBRO, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Earnings (Loss)

(Millions of Dollars)

(Unaudited)

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(Dollar and share amounts in tables presented in millions, unless otherwise noted)

The following discussion and analysis should be read together with the accompanying unaudited consolidated financial statements and the notes thereto included in this Quarterly Report and the audited consolidated financial statements and the notes thereto in the 2024 Annual Report.

Overview

Hasbro, Inc. (“Hasbro”) is a leading game, intellectual property ("IP"), and toy company whose mission is to create joy and community through the magic of play. With over 100 years of expertise, we deliver play experiences to kids, families, and fans around the world, through physical and digital games, video games, toys, licensed consumer products, location-based entertainment, film, TV and more.    

Through our franchise-first approach, we unlock value from both new and legacy IP, including MAGIC: THE GATHERING, DUNGEONS & DRAGONS, MONOPOLY, HASBRO GAMES, NERF, TRANSFORMERS, PLAY-DOH and PEPPA PIG, as well as premier partner brands. Powered by our portfolio of iconic brands and a diversified network of partners and subsidiary studios, we bring fans together wherever they are, from tabletop to screen. 

For more than a decade, Hasbro has been consistently recognized for its corporate citizenship, including being named one of the 100 Best Corporate Citizens by 3BL Media, a 2025 JUST Capital Industry Leader, one of the 50 Most Community-Minded Companies in the U.S. by the Civic 50, and a Brand that Matters by Fast Company.

Recent Developments

Over the last several years, Hasbro has continued our transformation for our business and we began to see tangible results from our initiatives. Specifically, we focused our efforts on strategic investments in our most valuable and profitable franchises across games, licensing, toys and entertainment. We also made significant progress in our cost-savings initiatives and further strengthened our leadership team with industry veterans and turnaround experts.

In the first quarter of 2025, we launched our refreshed strategy "Playing to Win" to refocus the Company on play and partnership. Through play fueled brand engagement and partner scaled co-investment, we plan to expand our consumer reach as a games, IP, and toy company. We have set goals and objectives to be one of the most profitable and diverse toy and game companies globally, powered by multi-segment and multi-generational franchises. Playing to Win includes five strategic building blocks:

• Profitable Franchises:** Focus on improving the fundamentals of profitable, play-focused brands, through innovation, partnership, operational excellence, managed cost-discipline and retail execution.

• Aging Up**: Expand our consumer base and drive play and collectible experiences for fans of all ages, recognizing that consumers aged 13 and above are gaining purchase share.

• Everyone Plays**: Engage across the play spectrum to where we under-index and capture new consumers across demographics and markets.

• Digital and Direct:** Embrace new ways to engage with our consumers through video games, digital technology and direct-to-consumer interactions.

• Partner Scale:** Capitalize on our partners’ investments and scale to enhance our brands through strategic relationships and licensing arrangements.

As part of our Playing to Win strategy, we have realigned our brand portfolios to correspond our refreshed strategy:

• Grow Brands:** Brands representing the highest margin, highest growth opportunities in categories where we see significant share and/or underlying market growth.

• Optimize Brands**: Brands representing opportunities to maintain or grow share while improving operating profit returns.

• Reinvent Brands**: Brands representing opportunities to reinvent or restructure to drive innovation and improved operating profit returns.

Brands periodically are reclassified, based on changes in growth, profitability or other characteristics, and when those changes occur, the respective portfolio historical revenue is included within the new classification.

Tariffs

The impact of tariffs on the Company's business operations was not significant during the first three months of 2025 and throughout 2024; however significant changes in trade policy announced by the U.S. government during the

second quarter of 2025 could result in material adverse impacts to our forward-looking financial results. The Company monitors the impact of tariffs to its business operations on an ongoing basis and may need to implement actions such as imposing price adjustments or making changes in our supply chain sourcing strategies in order to mitigate the impact of tariffs in future periods. The impacts of tariffs may lead to reduced economic activity, increased costs, reduced demand and changes in purchasing behaviors for some or all of our products, potential unrealizability of some of our existing assets, or other economic outcomes that could have a material adverse impact on our sales volumes, prices, and our financial results.

Although the final impact of tariffs is uncertain, from the Company’s scenario planning, assuming tariffs on imports from China to the United States ranging from 50% to 145%, and tariffs on imports from the rest of the world at 10%, we currently estimate between $100 million and $300 million of negative gross impact to operating profit in 2025, before any mitigation measures. Factoring in all mitigating levers, we currently estimate a negative net profit impact to the Company between $60 million and $180 million for 2025. The range of outcomes is dependent on final trade policy, customer order patterns, and impacts on consumer purchasing from tariffs and related economic conditions. The impact may be greater than set forth above. The Company also currently anticipates that tariffs will result in purchasing shifting later in the year, with a negative impact to second quarter revenues.

Summary of Results

During 2025, the Company experienced an increase in revenue from $757.3 million for the three months ended March 31, 2024 to $887.1 million for the three months ended March 30, 2025. The increase in revenue for the three months ended March 30, 2025 from the three months ended March 31, 2024 is driven primarily by growth in our Wizards of the Coast and Digital Gaming segment, inclusive of increased demand for both tabletop and licensed digital gaming, partially offset by a decrease in our Consumer Products segment related to volume declines.

The Company has made strong progress towards its ongoing transformation efforts while achieving an operating profit of $170.7 million during the three months ended March 30, 2025 as compared to $116.2 million for the three months ended March 31, 2024, respectively. See the below discussion for the consolidated and segment results of operations.

RESULTS OF OPERATIONS

The following table presents the consolidated results of operations for the three months ended March 30, 2025 and March 31, 2024:

Net revenues - Net revenues for the first quarter of 2025 increased 17% to $887.1 million from $757.3 million for the first quarter of 2024 primarily driven by a $145.8 million, or 46%, increase in the Wizards of the Coast and Digital Gaming segment, offset by a $14.7 million, or 4%, decline in the Consumer Products segment, and a $1.3 million, or 5%, decline in the Entertainment segment. See the Segment Results discussion below for further details.

The following table presents net revenues by brand portfolio category:

GROW BRANDS: Net revenues in the Grow Brands portfolio increased $131.7 million, or 25%, in the first quarter of 2025, compared to the first quarter of 2024. The net revenue increase primarily reflects higher net revenues from MAGIC: THE GATHERING, MONOPOLY, and MARVEL product sales and digital game licensing related to MONOPOLY GO!, which were partially offset by lower net revenues from GI JOE products.

OPTIMIZE BRANDS: Net revenues in the Optimize Brands portfolio decreased $9.7 million, or 7%, in the first quarter of 2025, compared to the first quarter of 2024. The net revenue decrease is primarily driven by lower net revenues from PEPPA PIG products, partially offset by an increase in revenue from TRANSFORMERS products, which was driven by increased consumer demand stemming from the September 2024 theatrical release of Transformers One with our partners at Paramount.

REINVENT BRANDS: Net revenues in the Reinvent Brands portfolio increased $7.8 million, or 8%, in the first quarter of 2025 compared to the first quarter of 2024. Higher net revenues from BEY BLADE products, following the Company's successful reintroduction of the brand, as well as higher consumer product licensing revenues relating to MY LITTLE PONY, which were partially offset by decreases in revenue from NERF.

OPERATING COSTS AND EXPENSES

Cost of sales - Cost of sales for the first quarter of 2025 was $204.5 million, or 23.1% of net revenues, compared to $204.2 million, or 27.0% of net revenues, for the first quarter of 2024. The decrease in cost of sales as a percent of net revenues was primarily the result of a shift in product mix, driven by an increase in both digital and consumer product licensing revenue during the quarter.

Program cost amortization - Program cost amortization decreased slightly to $7.4 million, or 0.8% of net revenues, for the first quarter of 2025 from $8.1 million, or 1.1% of net revenues, for the first quarter of 2024. Program costs are capitalized as incurred and amortized primarily using the individual-film-forecast method which matches costs to the related recognized revenue and is based upon the current slate of entertainment projects.

Royalties - Royalty expense for the first quarter of 2025 increased to $57.0 million, or 6.4% of net revenues, compared to $50.9 million, or 6.7% of net revenues, for the first quarter of 2024. Fluctuations in Royalty expense are generally related to the volume of content releases and deliveries and entertainment-driven products sold. The increase in Royalty expense during the first quarter of 2025 was directly driven by an increase in sales for partner brands such as MARVEL, for which the Company is obligated to pay a royalty.

Product development - Product development expense for the first quarter of 2025 was $80.5 million, or 9.1% of net revenues, compared to $65.5 million, or 8.6% of net revenues, for the first quarter of 2024. The increase in Product development expense during the first quarter of 2025 was primarily due to higher incremental investment in the development of Grow Brands under the Company's new "Playing to Win" strategy.

Advertising - Advertising expense for the first quarter of 2025 was $55.4 million, or 6.2% of net revenues, compared to $51.5 million, or 6.8% of net revenues, for the first quarter of 2024. The Advertising expense increase during the first quarter of 2025 was primarily driven by the timing of sales initiatives in Consumer Products segment.

Amortization of intangible assets - Amortization of intangible assets remained flat at $17.0 million, or 1.9% of net revenues, for the first quarter of 2025, compared to $17.0 million, or 2.2% of net revenues, for the first quarter of 2024. The amortization expense was driven by the straight-line amortization of the Company's remaining definite-lived intangible assets.

Loss on disposal of business - Loss on disposal of business for the first quarter of 2025 was $25.0 million, or 2.8% of net revenues, compared to $9.1 million, or 1.2% of net revenues, for the first quarter of 2024. The increase in Loss on disposal of business was driven by the settlement of a holdback provision relating to the divestiture of the eOne Film and TV business.

Selling, distribution and administration - Selling, distribution and administration expenses increased to $269.6 million, or 30.4% of net revenues for the first quarter of 2025, from $234.8 million, or 31.0% of net revenues, for the first quarter of 2024. The increase in Selling, distribution and administration expenses during the first quarter of 2025 is primarily the result of a non-recurring stock-compensation benefit of $18.1 million recorded during the first quarter of 2024, as well as an increase in the Company's bad debt provision, partially offset by benefits from cost savings initiatives.

Operating Profit - Operating profit for the first quarter of 2025 was $170.7 million, or 19.2% of net revenues, compared to an operating profit of $116.2 million, or 15.3% of net revenues, for the first quarter of 2024 driven by the factors discussed above.

NON-OPERATING EXPENSE (INCOME)

Interest expense - Interest expense for the first quarter of 2025 totaled $41.6 million compared to $38.5 million in the first quarter of 2024. The increase in Interest expense primarily reflects a higher average interest rate on the outstanding borrowings existing as of the end of the first quarter of 2025 as compared to those outstanding as of the first quarter of 2024.

Interest income - Interest income was $8.9 million for the first quarter of 2025, compared to $8.3 million in the first quarter of 2024. Higher Interest income in 2025 primarily reflects higher cash balances in 2025 compared to 2024, partially offset by lower average interest rates.

Other expense, net - Other expense, net was $1.4 million for the first quarter of 2025, compared to Other expense, net of $5.0 million in the first quarter of 2024. The change in Other expense, net during 2025 was driven primarily by variations in the movement of foreign currencies in the first quarter of 2025 when compared to the first quarter of 2024.

INCOME TAXES

Income tax expense totaled $37.1 million on pre-tax income of $136.6 million in the first quarter of 2025 compared to income tax expense of $21.9 million on pre-tax income of $81.0 million in the first quarter of 2024. Both periods were impacted by discrete tax events including the accrual of potential interest and penalties on uncertain tax positions. During the first quarter of 2025, the Company recorded a net discrete tax benefit of $0.3 million compared to a net discrete tax expense of $1.8 million in the first quarter of 2024.

The net discrete tax benefit for the first quarter of 2025 is primarily associated with stock-based compensation offset by activity related to uncertain tax benefits. The net discrete tax expense for the first quarter of 2024 is primarily associated with stock-based compensation. Absent discrete items, the tax rates for the first quarter of 2025 and 2024 were 23.1% and 22.4%, respectively. The increase in the base rate of 23.1% for the first quarter of 2025, relative to the first quarter of 2024, is primarily due to the mix of jurisdictions where the Company earned its profits.

SEGMENT RESULTS

The following table presents net external revenues and operating profit (loss) for the Company's reportable segments:

Wizards of the Coast and Digital Gaming Segment

The following table presents Wizards of the Coast and Digital Gaming segment net revenues by category:

Wizards of the Coast and Digital Gaming segment net revenues increased 46.1% in the first quarter of 2025 to $462.1 million from $316.3 million in the first quarter of 2024. The net revenue increase in the Wizards of the Coast and Digital Gaming segment during the first quarter of 2025 was primarily attributable to revenue contributions from higher digital licensing related to MONOPOLY GO!, as well as an increase in Tabletop Gaming revenue which increased 50.7% behind growth in MAGIC: THE GATHERING, primarily due to strong demand for Aetherdrift and Tarkir Dragonstorm, as well as other various Backlist sets.

Wizards of the Coast and Digital Gaming segment operating profit was $230.0 million, or 49.8% of segment net revenues for the first quarter of 2025, compared to operating profit of $122.8 million, or 38.8% of segment net revenues, for the first quarter of 2024. Operating profit increased during the first quarter of 2025 driven by increased net revenues and continued growth in digital licensing.

Consumer Products Segment

The following table presents the Consumer Products segment net revenues by major geographic region:

The Consumer Products segment net revenues decreased 4% to $398.3 million for the first quarter of 2025 compared to $413.0 million for the first quarter of 2024 primarily driven by broader industry trends and shifts in product mix. The net revenue decrease primarily reflects lower net revenues from NERF, GI JOE and PLAY-DOH products. These declines in revenue were partially offset by revenue growth from BEY BLADE, MARVEL, and TRANSFORMERS products, as well as an increase in consumer product licensing revenue from MY LITTLE PONY.

Consumer Products segment operating loss for the first quarter of 2025 was $43.9 million or 11.0% of segment net revenues, compared to a segment operating loss of $46.9 million or 11.4% of segment net revenues, for the first quarter of 2024. The decrease in operating loss in the first quarter of 2025 was driven by savings realized from the Company's cost savings and transformation initiatives, offset by a decrease in net revenues, higher royalty expenses, reflecting the mix of products sold, and higher advertising costs.

Entertainment Segment

The following table presents Entertainment segment net revenues by category:

Entertainment segment net revenues decreased 5% to $26.7 million for the first quarter of 2025, compared to $28.0 million for the first quarter of 2024. The net revenue decrease in the Entertainment segment during the first quarter of 2025 was driven primarily by the timing of entertainment streaming renewals.

Entertainment segment operating loss was $11.2 million, or 41.9% of segment net revenues for the first quarter of 2025, compared to an operating profit of $5.8 million, or 21% of segment net revenues for the first quarter of 2024. The decrease in operating profit in Entertainment segment operating results during the first quarter of 2025 was driven by a non-recurring Loss on disposal of business of $25.0 million recorded during the quarter.

Corporate and Other

Corporate and Other operating loss was $4.2 million for the first quarter of 2025 compared to an operating profit of $34.5 million for the first quarter of 2024. The decrease in operating profit in the first quarter of 2025 as compared to the first quarter of 2024 primarily reflects a non-recurring benefit from the reversal of stock compensation expense recorded in the first quarter of 2024. Refer to Note 1, Basis of Presentation, to the consolidated financial statements for further information on the stock compensation adjustment.

OTHER INFORMATION

Commitments and Contingencies

The Company enters into purchase orders with vendors and other parties in the ordinary course of business. Refer to Item 7 of our 2024 Annual Report for additional information regarding the Company’s cash obligations and commitments as of the end of fiscal year 2024. Additionally, refer to Note 14, Commitments and Contingencies, to the consolidated financial statements for a discussion of the Company’s commitments and contingencies. Contractual obligations and commercial commitments, as detailed in the Company's 2024 Form 10-K, did not materially change outside of certain payments made in the normal course of business and as otherwise set forth in this report.

LIQUIDITY AND CAPITAL RESOURCES

The Company has historically generated a significant amount of cash from operations. The Company primarily funds its operations and liquidity needs through cash on hand and from cash flows from operations, and when needed, borrowings under its commercial paper program and available lines of credit.

The Company believes that the funds available to it, including cash expected to be generated from operations, funds available through its commercial paper program or its available lines of credit, are adequate to meet its working capital needs for the next twelve months. The Company may also issue debt or equity securities from time to time, to provide additional sources of liquidity when pursuing opportunities to enhance our long-term competitive position, while maintaining a strong balance sheet.

The impact of tariffs on the Company's business operations was not significant during the first three months of 2025 and throughout 2024; however significant changes in trade policy announced by the U.S. government during the second quarter of 2025 could result in material adverse impacts to our forward-looking financial results, including the timing and extent of cash flows based upon timing in customer buying patterns and changes in our supply chain sourcing strategies.

As of March 30, 2025, the Company's cash and cash equivalents totaled $621.1 million. The majority of the Company’s cash and cash equivalents held outside of the United States as of March 30, 2025 are denominated in the U.S. dollar.

Under the Company’s commercial paper program, at the request of the Company and subject to market conditions, the Company may issue notes from time to time up to an aggregate principal amount outstanding at any given time of $1.0 billion. The Company intends to use the commercial paper program as its primary short-term borrowing facility. As of March 30, 2025, the Company had no outstanding borrowings related to the commercial paper program.

The Company’s revolving credit facility with Bank of America, provides the Company with commitments having a maximum aggregate principal amount of $1.25 billion. The revolving credit facility also provides for a potential additional incremental commitment increase of up to $500.0 million subject to agreement of the lenders. The Company's revolving credit facility contains certain financial covenants setting forth leverage and coverage requirements, and certain other limitations typical of an investment grade facility, including with respect to liens, mergers and incurrence of indebtedness. The Company was in compliance with all covenants as of March 30, 2025. The Company had no borrowings outstanding under its revolving credit facility as of March 30, 2025. However, letters of credit outstanding under this facility as of March 30, 2025 were approximately $3.7 million. Amounts available and unused under the revolving credit facility at March 30, 2025 were approximately $1.25 billion, inclusive of borrowings under the Company’s commercial paper program. The Company also has other uncommitted lines

from various banks, of which approximately $7.8 million was utilized as of March 30, 2025. Of the amount utilized under, or supported by, the uncommitted lines, the full $7.8 million represented letters of credit.

As of March 30, 2025, the Company had $3,331.5 million of Long-term debt due at varying times from 2026 through 2044. From time to time, the Company or its affiliates may seek to retire or purchase outstanding debt through cash purchases, in open-market purchases, privately negotiated transactions or otherwise. Such repurchases, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. During 2025, the Company repurchased $50.4 million of its outstanding debt.

The Company has a supplier finance program which provides participating suppliers the option of receiving payment in advance of an invoice due date, to be paid by certain administering banks, on the basis of invoices that the Company has confirmed as valid and approved. The Company’s obligation is to make payment in the invoice amount negotiated with participating suppliers, to the administering banks on the invoice due date. The Company’s suppliers are not required to participate in the supplier finance program. The early payment transactions between the Company’s supplier and the administering bank are subject to an agreement between those parties, and the Company does not participate in any financial aspect of the agreements between the Company’s suppliers and the administering banks. The Company has not pledged any assets to the administering bank under the supplier financing program. The Company or the administering bank may terminate the agreement upon at least 30 days’ written notice.

The amount of obligations confirmed under the supplier finance program that remain unpaid by the Company were $51.2 million, $47.7 million, and $66.2 million as of March 30, 2025, March 31, 2024 and December 29, 2024, respectively. These obligations are presented within Accounts payable in the Company's Consolidated Balance Sheets. The activity related to this program is reflected within the operating activities section of the Consolidated Statements of Cash Flows.

Cash Flow

The following table summarizes the changes in the Consolidated Statement of Cash Flows:

Net cash provided by Operating activities in the first three months of 2025 was $138.1 million compared to $177.8 million in the first three months of 2024. The $39.7 million decrease in net cash provided by Operating activities after adjusting for non-cash items, was primarily attributable to changes in net working capital primarily the timing of accounts receivable in the first three months of 2024, partially offset by improved net income in the first three months of 2025 compared to first three months of 2024.

Net cash utilized for Investing activities was $52.4 million in the first three months of 2025 compared to net cash utilized for Investing activities of $48.1 million in the first three months of 2024. Additions to property, plant and equipment and software were $13.8 million and $29.4 million, respectively, in the first three months of 2025 compared to $22.1 million and $23.7 million, respectively, in the first three months of 2024. Additionally, a purchase of Long-term Investments of $10.0 million occurred in the first three months of 2025 with no similar activity in the first three months of 2024.

Net cash utilized by Financing activities was $162.4 million in the first three months of 2025 compared to net cash utilized of $108.9 million in the first three months of 2024. Financing activities in the first three months of 2025 primarily include dividends paid of $97.9 million, repayments of long-term debt of $49.2 million, and $17.7 million of payments related to tax withholdings for stock compensation coinciding with equity award vesting activity. Financing activities in the first three months of 2024 included $97.2 million of dividends paid and $10.2 million of payments related to tax withholdings for stock compensation coinciding with equity award vesting activity.

CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT ESTIMATES

The Company prepares its consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. As such, management is required to make certain estimates, judgments and assumptions that it believes are reasonable based on the information available. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the periods presented. The significant accounting policies which management believes are the most critical to aid in fully understanding and evaluating the Company's reported financial results include recoverability of goodwill and intangible assets and income taxes. These critical accounting policies are detailed in the Company's 2024 Form 10-K.

FINANCIAL RISK MANAGEMENT

The Company is exposed to market risks attributable to fluctuations in foreign currency exchange rates primarily as the result of sourcing products priced in U.S. dollars, Hong Kong dollars and Euros while marketing and selling those products in more than twenty currencies. Results of operations may be affected primarily by changes in the value of the U.S. dollar, Euro, British pound sterling, Canadian dollar, Japanese Yen, Brazilian real and Mexican peso and, to a lesser extent, other currencies in Latin America and Asia Pacific countries.

To manage this exposure, the Company has hedged a portion of its forecasted foreign currency transactions using foreign exchange forward contracts and foreign exchange option contracts. The Company is also exposed to foreign currency risk with respect to its net cash and cash equivalents or short-term borrowing positions in currencies other than the U.S. dollar. The Company believes, however, that the on-going risk on the net exposure should not be material to its financial condition. In addition, the Company's revenues and costs have been, and will likely continue to be, affected by changes in foreign currency rates. A significant change in foreign exchange rates can materially impact the Company's revenues and earnings due to translation of foreign-denominated revenues and expenses. The Company does not hedge against translation impacts of foreign exchange. From time to time, affiliates of the Company may make or receive intercompany loans in currencies other than their functional currency. The Company manages this exposure at the time the loan is made by using foreign exchange contracts.

The Company reflects derivatives at their fair value as an asset or liability on the Consolidated Balance Sheets. The Company does not speculate in foreign currency exchange contracts. See Note 12, Derivative Financial Instruments, to the Company’s consolidated financial statements for further details on the Company's derivatives.

As of March 30, 2025, the Company had fixed-rate debt of $3.4 billion. The Company may from time to time assess interest rate swaps related to its outstanding debt. The Company did not have any outstanding swaps as of March 30, 2025, March 31, 2024, or December 29, 2024.

INFLATION

The impact of inflation on the Company's business operations was significant during the first three months of 2025 and throughout 2024. The Company monitors the impact of inflation to its business operations on an ongoing basis and may need to implement actions such as price adjustments to mitigate the impact of changes to the rate of inflation in future periods. However, future volatility of general price inflation could affect consumer purchases of our products and spending on entertainment. Additionally, the impact of inflation on costs and availability of materials, costs for shipping and warehousing and other operational overhead, could adversely affect the Company's financial results.

The information required by this item is included in Part I, Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations" and is incorporated herein by reference.

Evaluation of disclosure controls and procedures

The Company maintains disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. The Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the

effectiveness of the design and operation of the Company's disclosure controls and procedures as of March 30, 2025. Based on the evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective.

Changes in internal control over financial reporting

There were no changes in the Company's internal control over financial reporting, as defined in Rule 13a-15(f) promulgated under the Exchange Act, during the quarter ended March 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

On November 13, 2024, West Palm Beach Firefighters’ Pension Fund filed a putative class action lawsuit in the U.S. District Court for the Southern District of New York alleging violations of Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934 and certain rules promulgated thereunder. West Palm Beach Firefighters’ Pension Fund v. Hasbro, Inc., Richard Stoddart, Christian Cocks, Deborah Thomas, Gina Goetter and Eric Nyman, Case No.1:24-cv-8633 (S.D.N.Y.). The plaintiff asserts claims on behalf of persons and entities that purchased the Company’s securities between February 7, 2022 and October 25, 2023 (the “Class Period”), and seeks compensatory damages, interest, fees, and costs. The complaint alleges that members of the putative class suffered losses as a result of false or misleading statements and withholding of information regarding the Company’s inventory, including quality and appropriateness thereof, during the Class Period. The court is in the process of appointing a lead plaintiff. The Company intends to vigorously defend against these claims. Due to the early stages of this matter, the Company is unable to estimate a reasonably possible range of loss, if any, that may result from this matter.

On February 5, 2025, Dale Lee, derivatively on behalf of Hasbro, Inc., filed a putative shareholder derivative action against current and former members of the Board of Directors of the Company in the U.S. District Court for the Southern District of New York. Lee v. Cocks, et al., Case No. 1:25-cv-01018 (S.D.N.Y.). The allegations in this complaint are nearly identical to those of the West Palm Beach Firefighters' Pension Fund action. Plaintiff alleges, nominally on behalf of the Company, that the named defendants breached the Hasbro Code of Conduct and Audit Committee Charter as well as their individual fiduciary duties by making false or misleading statements, approving the making of false or misleading statements, and/or withholding information regarding the Company's inventory during the same time period as the Class Period. The action alleges violations of Section 14(a) of the Exchange Act and Rule 14a-9 with respect to the 2022 Proxy Statement, Section 10(b), 15 U.S.C. sec. 78(j) and Rule 10b-5. Plaintiff voluntarily dismissed the action.

On February 21, 2025, Patrick Ayers, derivatively on behalf of Hasbro, Inc., filed a putative shareholder derivative action against certain of the Company’s executive officers and current and former members of the Board of Directors of the Company in the U.S. District Court for the Southern District of New York, et al., Case No. 1:25-cv-1504 (S.D.N.Y.). The allegations in this complaint are substantially the same as those in the Lee action described above. Plaintiff voluntarily dismissed the action.

The Company is currently party to other certain legal proceedings, none of which we believe to be material to our business or financial condition.

In connection with information set forth in this Quarterly Report on Form 10-Q, the risk factors discussed under Item 1A. Risk Factors, in Part I of our 2024 Form 10-K and in our subsequent filings, including in this filing, should be considered. The risks set forth in our 2024 Form 10-K and in our subsequent filings, including in this filing, could materially and adversely affect our business, financial condition, and results of operations. There are no material changes from the risk factors as previously disclosed in our 2024 Form 10-K, in any of our subsequently filed reports or as otherwise set forth in this Quarterly Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

In May 2018, the Company announced that its Board of Directors authorized the repurchase of an additional $500 million of common stock, its most recent share repurchase authorization. Purchases of the Company's common stock may be made from time to time, subject to market conditions. These shares may be repurchased in the open market or through privately negotiated transactions. The Company has no obligation to repurchase shares under this authorization and there is no expiration date for this repurchase authorization. The timing, actual number, and value of shares that are repurchased will depend on a number of factors, including the price of the Company's stock and the Company’s generation of, and uses for, cash.

There were no repurchases of the Company’s Common Stock during the three months ended March 30, 2025. At March 30, 2025, Hasbro had $241.6 million remaining available under its share repurchase authorization.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

During the three months ended March 30, 2025, none of our officers or directors adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) and (c) of Regulation S-K.

** Furnished herewith*

*** Indicates management contract or compensatory plan, contract or arrangement*

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.