filings.toolsItem 1. Financial Statements.
117K characters. Original on sec.gov · Markdown
Item 1. Financial Statements.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Millions of Dollars Except Share Data)
(Unaudited)
| June 29, 2025 | June 30, 2024 | December 29, 2024 | |||||||||||||||
| ASSETS | |||||||||||||||||
| Current assets | |||||||||||||||||
| Cash and cash equivalents, including restricted cash of $0.3, $0.3 and $0.3 | $ | 546.9 | $ | 626.8 | $ | 695.0 | |||||||||||
| Short-term investments | — | 483.0 | — | ||||||||||||||
| Accounts receivable, net | 717.8 | 789.0 | 919.8 | ||||||||||||||
| Inventories | 417.1 | 357.6 | 274.2 | ||||||||||||||
| Prepaid expenses and other current assets | 359.4 | 418.0 | 353.5 | ||||||||||||||
| Total current assets | 2,041.2 | 2,674.4 | 2,242.5 | ||||||||||||||
| Property, plant and equipment, net of accumulated depreciation of $1,055.4, $1,065.0 and $1,026.7 | 251.8 | 340.4 | 302.6 | ||||||||||||||
| Goodwill | 1,256.8 | 2,278.8 | 2,278.2 | ||||||||||||||
| Other intangible assets, net of accumulated amortization of $460.3, $1,331.7 and $421.2 | 489.4 | 552.8 | 518.4 | ||||||||||||||
| Other assets | 1,135.2 | 1,017.7 | 998.6 | ||||||||||||||
| Total assets | $ | 5,174.4 | $ | 6,864.1 | $ | 6,340.3 | |||||||||||
| LIABILITIES, NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY | |||||||||||||||||
| Current liabilities | |||||||||||||||||
| Current portion of long-term debt | $ | — | $ | 500.0 | $ | — | |||||||||||
| Accounts payable | 339.6 | 297.5 | 341.5 | ||||||||||||||
| Accrued liabilities | 888.2 | 1,032.6 | 1,059.8 | ||||||||||||||
| Total current liabilities | 1,227.8 | 1,830.1 | 1,401.3 | ||||||||||||||
| Long-term debt | 3,320.9 | 3,461.4 | 3,380.8 | ||||||||||||||
| Other liabilities | 356.0 | 399.7 | 373.2 | ||||||||||||||
| Total liabilities | $ | 4,904.7 | $ | 5,691.2 | $ | 5,155.3 | |||||||||||
| Commitments and contingencies (Note 14) | |||||||||||||||||
| Shareholders' equity | |||||||||||||||||
| Preference stock of $2.50 par value. Authorized 5,000,000 shares; none issued | — | — | — | ||||||||||||||
| Common stock of $0.50 par value. Authorized 600,000,000 shares; issued 220,286,736 shares at June 29, 2025, June 30, 2024, and December 29, 2024 | 110.1 | 110.1 | 110.1 | ||||||||||||||
| Additional paid-in capital | 2,644.2 | 2,592.1 | 2,632.2 | ||||||||||||||
| Retained earnings | 1,319.3 | 2,284.7 | 2,274.2 | ||||||||||||||
| Accumulated other comprehensive loss | (226.6) | (222.2) | (246.4) | ||||||||||||||
| Treasury stock, at cost; 80,075,685 shares at June 29, 2025; 80,905,996 shares at June 30, 2024; and 80,758,045 shares at December 29, 2024 | (3,605.9) | (3,614.1) | (3,612.5) | ||||||||||||||
| Noncontrolling interests | 28.6 | 22.3 | 27.4 | ||||||||||||||
| Total shareholders' equity | 269.7 | 1,172.9 | 1,185.0 | ||||||||||||||
| Total liabilities, noncontrolling interests and shareholders' equity | $ | 5,174.4 | $ | 6,864.1 | $ | 6,340.3 |
See accompanying condensed notes to consolidated financial statements.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Millions of Dollars Except Per Share Data)
(Unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 29, 2025 | June 30, 2024 | June 29, 2025 | June 30, 2024 | ||||||||||||||||||||
| Net revenues | $ | 980.8 | $ | 995.3 | $ | 1,867.9 | $ | 1,752.6 | |||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||
| Cost of sales | 225.3 | 237.7 | 429.8 | 441.9 | |||||||||||||||||||
| Program cost amortization | 6.2 | 8.5 | 13.6 | 16.6 | |||||||||||||||||||
| Royalties | 84.5 | 55.3 | 141.5 | 106.2 | |||||||||||||||||||
| Product development | 77.5 | 70.4 | 158.0 | 135.9 | |||||||||||||||||||
| Advertising | 63.6 | 60.4 | 119.0 | 111.9 | |||||||||||||||||||
| Amortization of intangible assets | 17.2 | 17.1 | 34.2 | 34.1 | |||||||||||||||||||
| Impairment of goodwill | 1,021.9 | — | 1,021.9 | — | |||||||||||||||||||
| Loss on disposal of business | — | 15.3 | 25.0 | 24.4 | |||||||||||||||||||
| Selling, distribution and administration | 282.8 | 318.5 | 552.4 | 553.3 | |||||||||||||||||||
| Total costs and expenses | 1,779.0 | 783.2 | 2,495.4 | 1,424.3 | |||||||||||||||||||
| Operating profit (loss) | (798.2) | 212.1 | (627.5) | 328.3 | |||||||||||||||||||
| Non-operating expense (income): | |||||||||||||||||||||||
| Interest expense | 40.6 | 43.0 | 82.2 | 81.5 | |||||||||||||||||||
| Interest income | (5.4) | (13.0) | (14.3) | (21.3) | |||||||||||||||||||
| Other (income) expense, net | (18.7) | (0.8) | (17.3) | 4.2 | |||||||||||||||||||
| Total non-operating expense, net | 16.5 | 29.2 | 50.6 | 64.4 | |||||||||||||||||||
| Earnings (loss) before income taxes | (814.7) | 182.9 | (678.1) | 263.9 | |||||||||||||||||||
| Income tax expense | 40.0 | 44.4 | 77.1 | 66.3 | |||||||||||||||||||
| Net earnings (loss) | (854.7) | 138.5 | (755.2) | 197.6 | |||||||||||||||||||
| Net earnings attributable to noncontrolling interests | 1.1 | — | 2.0 | 0.9 | |||||||||||||||||||
| Net earnings (loss) attributable to Hasbro, Inc. | $ | (855.8) | $ | 138.5 | $ | (757.2) | $ | 196.7 | |||||||||||||||
| Net earnings (loss) per common share: | |||||||||||||||||||||||
| Basic | $ | (6.10) | $ | 0.99 | $ | (5.41) | $ | 1.41 | |||||||||||||||
| Diluted | $ | (6.10) | $ | 0.99 | $ | (5.41) | $ | 1.41 | |||||||||||||||
| Cash dividends declared per common share | $ | 0.70 | $ | 0.70 | $ | 1.40 | $ | 1.40 |
See accompanying condensed notes to consolidated financial statements.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Earnings (Loss)
(Millions of Dollars)
(Unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 29, 2025 | June 30, 2024 | June 29, 2025 | June 30, 2024 | ||||||||||||||||||||
| Net earnings (loss) | $ | (854.7) | $ | 138.5 | $ | (755.2) | $ | 197.6 | |||||||||||||||
| Other comprehensive earnings (loss): | |||||||||||||||||||||||
| Foreign currency translation adjustments | 24.1 | (22.8) | 34.3 | (26.7) | |||||||||||||||||||
| Net (losses) gains on cash flow hedging activities, net of tax | (10.4) | 3.2 | (13.1) | 4.9 | |||||||||||||||||||
| Reclassifications to earnings, net of tax: | |||||||||||||||||||||||
| Net (losses) gains on cash flow hedging activities | (0.7) | 0.7 | (1.4) | 1.1 | |||||||||||||||||||
| Total other comprehensive earnings (loss), net of tax | 13.0 | (18.9) | 19.8 | (20.7) | |||||||||||||||||||
| Total comprehensive earnings attributable to noncontrolling interests | 1.1 | — | 2.0 | 0.9 | |||||||||||||||||||
| Total comprehensive earnings (loss) attributable to Hasbro, Inc. | $ | (842.8) | $ | 119.6 | $ | (737.4) | $ | 176.0 |
See accompanying condensed notes to consolidated financial statements.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Millions of Dollars)
(Unaudited)
| Six months ended | |||||||||||
| June 29, 2025 | June 30, 2024 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net earnings (loss) | $ | (755.2) | $ | 197.6 | |||||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||||
| Depreciation of property, plant and equipment | 32.1 | 49.6 | |||||||||
| Loss on disposal of business | 25.0 | 24.4 | |||||||||
| Impairment of goodwill | 1,021.9 | — | |||||||||
| Amortization of intangible assets | 34.2 | 34.1 | |||||||||
| Program cost amortization | 13.6 | 16.6 | |||||||||
| Deferred income taxes | (8.6) | 12.8 | |||||||||
| Inventory obsolescence | 12.0 | (7.1) | |||||||||
| Stock-based compensation | 31.3 | 14.8 | |||||||||
| Other non-cash items | (8.3) | 6.0 | |||||||||
| Change in operating assets and liabilities: | |||||||||||
| Decrease in accounts receivable | 221.7 | 228.7 | |||||||||
| Increase in inventories | (141.1) | (25.6) | |||||||||
| Increase in prepaid expenses and other current assets | (23.9) | (12.7) | |||||||||
| Program production costs | (6.5) | (12.5) | |||||||||
| Decrease in accounts payable and accrued liabilities | (177.8) | (192.7) | |||||||||
| Change in net deemed repatriation tax | (57.4) | (8.2) | |||||||||
| Other | (3.6) | 39.3 | |||||||||
| Net cash provided by operating activities | 209.4 | 365.1 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Additions to property, plant and equipment | (29.9) | (49.5) | |||||||||
| Additions to software development | (61.8) | (48.2) | |||||||||
| Purchases of investments | (10.0) | (480.1) | |||||||||
| Other | 12.5 | 2.4 | |||||||||
| Net cash utilized by investing activities | (89.2) | (575.4) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from long-term debt | — | 498.6 | |||||||||
| Repayments of borrowings | (60.5) | — | |||||||||
| Dividends paid | (196.0) | (194.6) | |||||||||
| Payments related to tax withholding for share-based compensation | (19.9) | (11.9) | |||||||||
| Stock-based compensation transactions | 4.9 | 4.0 | |||||||||
| Payments of financing costs | — | (5.3) | |||||||||
| Other | (3.1) | (2.3) | |||||||||
| Net cash (utilized) provided by financing activities | (274.6) | 288.5 | |||||||||
| Effect of exchange rate changes on cash | 6.3 | 3.2 | |||||||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | (148.1) | 81.4 | |||||||||
| Cash, cash equivalents and restricted cash at beginning of year | 695.0 | 545.4 | |||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 546.9 | $ | 626.8 | |||||||
| Supplemental information | |||||||||||
| Interest paid | $ | 79.2 | $ | 73.3 | |||||||
| Income taxes paid, net | $ | 158.4 | $ | 14.4 |
See accompanying condensed notes to consolidated financial statements.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Shareholders' Equity
(Millions of Dollars)
(Unaudited)
| Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Noncontrolling Interests | Total Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 29, 2024 | $ | 110.1 | $ | 2,632.2 | $ | 2,274.2 | $ | (246.4) | $ | (3,612.5) | $ | 27.4 | $ | 1,185.0 | ||||||||||||||||||||||||||||||||||||
| Net earnings attributable to Hasbro, Inc. | — | — | 98.6 | — | — | — | 98.6 | |||||||||||||||||||||||||||||||||||||||||||
| Net earnings attributable to noncontrolling interests | — | — | — | — | — | 0.9 | 0.9 | |||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive gain | — | — | — | 6.8 | — | — | 6.8 | |||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation transactions | — | (19.3) | — | — | 5.6 | — | (13.7) | |||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | 18.4 | — | — | — | — | 18.4 | |||||||||||||||||||||||||||||||||||||||||||
| Dividends declared | — | 0.6 | (98.4) | — | — | — | (97.8) | |||||||||||||||||||||||||||||||||||||||||||
| Distributions paid to noncontrolling owners and other foreign exchange | — | — | — | — | — | (0.7) | (0.7) | |||||||||||||||||||||||||||||||||||||||||||
| Balance, March 30, 2025 | $ | 110.1 | $ | 2,631.9 | $ | 2,274.4 | $ | (239.6) | $ | (3,606.9) | $ | 27.6 | $ | 1,197.5 | ||||||||||||||||||||||||||||||||||||
| Net earnings (loss) attributable to Hasbro, Inc. | — | — | (855.8) | — | — | — | (855.8) | |||||||||||||||||||||||||||||||||||||||||||
| Net earnings attributable to noncontrolling interests | — | — | — | — | — | 1.1 | 1.1 | |||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive gain | — | — | — | 13.0 | — | — | 13.0 | |||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation transactions | — | (1.3) | — | — | 0.6 | — | (0.7) | |||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | 12.5 | — | — | 0.4 | — | 12.9 | |||||||||||||||||||||||||||||||||||||||||||
| Dividends declared | — | 1.1 | (99.3) | — | — | — | (98.2) | |||||||||||||||||||||||||||||||||||||||||||
| Distributions paid to noncontrolling owners and other foreign exchange | — | — | — | — | — | (0.1) | (0.1) | |||||||||||||||||||||||||||||||||||||||||||
| Balance, June 29, 2025 | $ | 110.1 | $ | 2,644.2 | $ | 1,319.3 | $ | (226.6) | $ | (3,605.9) | $ | 28.6 | $ | 269.7 | ||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Noncontrolling Interests | Total Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | 110.1 | $ | 2,590.6 | $ | 2,188.4 | $ | (201.5) | $ | (3,625.7) | $ | 25.1 | $ | 1,087.0 | ||||||||||||||||||||||||||||||||||||
| Net earnings attributable to Hasbro, Inc. | — | — | 58.2 | — | — | — | 58.2 | |||||||||||||||||||||||||||||||||||||||||||
| Net earnings attributable to noncontrolling interests | — | — | — | — | — | 0.9 | 0.9 | |||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | (1.8) | — | — | (1.8) | |||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation transactions | — | (16.9) | — | — | 6.9 | — | (10.0) | |||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | (5.0) | — | — | — | — | (5.0) | |||||||||||||||||||||||||||||||||||||||||||
| Dividends declared | — | 1.2 | (98.6) | — | — | — | (97.4) | |||||||||||||||||||||||||||||||||||||||||||
| Distributions paid to noncontrolling owners and other foreign exchange | — | — | — | — | — | (2.0) | (2.0) | |||||||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2024 | $ | 110.1 | $ | 2,569.9 | $ | 2,148.0 | $ | (203.3) | $ | (3,618.8) | $ | 24.0 | $ | 1,029.9 | ||||||||||||||||||||||||||||||||||||
| Net earnings attributable to Hasbro, Inc. | — | — | 138.5 | — | — | — | 138.5 | |||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | (18.9) | — | — | (18.9) | |||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation transactions | — | 2.9 | — | — | 2.4 | — | 5.3 | |||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | 17.5 | — | — | 2.3 | — | 19.8 | |||||||||||||||||||||||||||||||||||||||||||
| Dividends declared | — | 1.8 | (1.8) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Distributions paid to noncontrolling owners and other foreign exchange | — | — | — | — | — | (1.7) | (1.7) | |||||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | 110.1 | $ | 2,592.1 | $ | 2,284.7 | $ | (222.2) | $ | (3,614.1) | $ | 22.3 | $ | 1,172.9 | ||||||||||||||||||||||||||||||||||||
See accompanying condensed notes to consolidated financial statements.
HASBRO, INC. AND SUBSIDIARIES
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
(Unaudited)
(1) Basis of Presentation
In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the consolidated financial position of Hasbro, Inc. and all consolidated subsidiaries ("Hasbro" or the "Company") as of June 29, 2025, June 30, 2024, and December 29, 2024, and the results of its operations and cash flows and shareholders' equity for the periods ended June 29, 2025 and June 30, 2024 in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and condensed notes thereto. Actual results could differ from those estimates.
The three months ended June 29, 2025 and June 30, 2024 were 13-week periods. The six months ended June 29, 2025 and June 30, 2024 were 26-week periods.
The results of operations for the three and six months ended June 29, 2025 are not necessarily indicative of results to be expected for the full year 2025, nor were those of the comparable 2024 periods representative of those actually experienced for the full year 2024.
These consolidated financial statements have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The Company filed with the SEC audited consolidated financial statements for the fiscal year ended December 29, 2024 in the Company's Annual Report on Form 10-K for the year ended December 29, 2024 ("2024 Form 10-K"), which includes all such information and disclosures and, accordingly, should be read in conjunction with the financial information included herein. Certain amounts have been reclassified to conform to current year presentation.
Other Adjustments
During the three and six months ended June 30, 2024, the Company corrected prior period errors and recorded a $31.1 million expense and associated liability related to historical environmental liabilities in accordance with Accounting Standard Codification 410, Asset Retirement and Environmental Obligations (recorded in Selling, distribution and administration on the Consolidated Statements of Operations), and a $26.7 million benefit related to an over-accrual of vendor commitment liabilities (recorded in Cost of sales on the Consolidated Statements of Operations). During the six months ended June 30, 2024, the Company corrected prior period errors associated with an $18.1 million benefit related to the reversal of stock compensation expense for the Company's performance stock awards that should have been recorded during fiscal year 2023 (recorded in Selling, distribution and administration on the Consolidated Statements of Operations). The recording of these items was not considered to be material, individually or in the aggregate, to the Company's prior year consolidated financial statements.
For the period ending June 30, 2024, the Company reclassified capitalized software developments costs of $202.5 million from Property, plant and equipment, net into Other long-term assets to conform with current year presentation.
Significant Accounting Policies
The Company's significant accounting policies are summarized in Note 1, Summary of Significant Accounting Policies, to the consolidated financial statements included in the Company's 2024 Form 10-K.
Recently Adopted Accounting Standards
During the three and six months ended June 29, 2025, there were no recently adopted accounting standards that had a material effect on the Company’s financial statements.
Issued Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements in Income Tax Disclosures. The amendments in this update enhance the transparency and decision usefulness of income tax disclosures. This amendment requires public companies to disclose specific categories in the rate reconciliation and provide additional information for
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
reconciling items that meet a quantitative threshold. Additionally, under the amendment, entities are required to disclose the amount of income taxes paid disaggregated by federal, state and foreign taxes, as well as disaggregated by material individual jurisdictions. Finally, the amendment requires entities to disclose income from continuing operations before income tax expense disaggregated between domestic and foreign and income tax expense from continuing operations disaggregated by federal, state and foreign. The new rules are effective for annual periods beginning after December 15, 2024. We are currently assessing the impact of this ASU on our consolidated financial statement disclosures.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures. The new standard requires enhanced additional disclosures related to certain expense categories. The new standard is effective for fiscal years beginning after December 15, 2026. We are currently assessing the impact of this ASU on our consolidated financial statement disclosures.
There were no other recently issued accounting pronouncements which would have a material effect on the Company’s condensed consolidated financial statements.
(2) Revenue Recognition
Revenue is recognized when control of the promised goods, functional intellectual property or production is transferred to the customers or licensees, in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable. The majority of the Company’s revenues are derived from sales of finished products to customers. See Note 1, Summary of Significant Accounting Policies, of the Company's 2024 Annual Report for the Company's revenue recognition accounting policy.
Contract Assets and Liabilities
In the ordinary course of business, the Company enters into contracts to license certain of the Company’s intellectual property, providing licensees right-to-use or access such intellectual property for use in the production and sale of consumer products and digital game development, location-based entertainment, and for use within content for distribution over streaming platforms and for television and film. Through these arrangements, the Company may receive advanced royalty payments from licensees, either in advance of a licensees’ subsequent sales to customers or prior to the completion of the Company’s performance obligation. In addition, the Company’s Wizards of the Coast and Digital Gaming segment may receive advanced payments from end users of its digital games at the time of the initial purchase, through in-application purchases or through subscription services. The Company defers revenues on all licensee and digital gaming advanced payments until the respective performance obligations are satisfied. The Company records the aggregate deferred revenues as contract liabilities in the Company’s Consolidated Balance Sheets on the basis of the expected consideration under the contract with the customer. The Company records contract assets, primarily related to (1) minimum guarantees being recognized in advance of contractual invoicing, which are recognized ratably over the terms of the respective license periods, and (2) film and television distribution revenues recorded for content delivered, where payment will occur over the license term. The current portion of contract assets is recorded in Prepaid expenses and other current assets and the long-term portion is recorded within Other long-term assets on the basis of expected receipt of cash per contractual terms.
The opening and closing balances of contract assets and contract liabilities are as follows:
| June 29, 2025 | June 30, 2024 | ||||||||||
| Assets | |||||||||||
| Balance at beginning of the year | $ | 241.4 | $ | 213.3 | |||||||
| Ending Balance | $ | 270.1 | $ | 237.2 | |||||||
| Liabilities | |||||||||||
| Balance at beginning of the year | $ | 236.8 | $ | 230.8 | |||||||
| Ending Balance | $ | 202.8 | $ | 258.9 |
For the six months ended June 29, 2025, the Company recognized revenue of $150.8 million that was included in the December 29, 2024 contract liability balance. For the six months ended June 30, 2024, the Company recognized revenue of $45.4 million that was included in the December 31, 2023 contract liability balance.
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
Unsatisfied performance obligations
As of June 29, 2025, revenue for unsatisfied performance obligations expected to be recognized in the future is $998.7 million, primarily for intellectual property to be made available in the future under existing agreements with merchandise and co-branding licensees and television station affiliates. Of this amount, we expect to recognize approximately $116.8 million in the remainder of 2025, $188.8 million in 2026, $146.9 million in 2027, and $546.2 million thereafter. These amounts include only fixed consideration or minimum guarantees and do not include amounts related to (i) contracts with an original expected term of one year or less or (ii) licenses of intellectual property that are solely based on the sales of the licensee.
Accounts Receivable and Allowance for Credit Losses
The Company’s balance for accounts receivable on the Consolidated Balance Sheets as of June 29, 2025 and June 30, 2024 are primarily from contracts with customers. A summary of the activity in the allowance for credit losses are as follows:
| June 29, 2025 | June 30, 2024 | ||||||||||
| Balance at beginning of the year | $ | 25.8 | $ | 12.7 | |||||||
| Provisions/charges to income | 16.0 | 0.8 | |||||||||
| Amounts charged off and other | (2.3) | 0.4 | |||||||||
| Foreign currency impact | 0.7 | (0.8) | |||||||||
| Ending balance | $ | 40.2 | $ | 13.1 |
Disaggregation of revenues
The Company disaggregates its revenues from contracts with customers by reportable segment: Wizards of the Coast and Digital Gaming, Consumer Products, and Entertainment. The Company further disaggregates revenues within its Wizards of the Coast and Digital Gaming segment by category: Tabletop Gaming and Digital and Licensed Gaming; within its Consumer Products segment by major geographic region: North America, Europe, Latin America, and Asia Pacific; and within its Entertainment segment by category: Film & TV and Family Brands. Finally, the Company disaggregates its revenues by brand portfolio into three brand categories: Grow Brands, Optimize Brands, and Reinvent Brands. We believe these collectively depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.
The following table represents consolidated Wizards of the Coast and Digital Gaming segment net revenues by category:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 29, 2025 | June 30, 2024 | June 29, 2025 | June 30, 2024 | ||||||||||||||||||||
| Tabletop Gaming | $ | 406.3 | $ | 307.6 | $ | 750.1 | $ | 535.8 | |||||||||||||||
| Digital and Licensed Gaming | 116.1 | 144.4 | 234.4 | 232.5 | |||||||||||||||||||
| Net revenues | $ | 522.4 | $ | 452.0 | $ | 984.5 | $ | 768.3 |
The following table represents consolidated Consumer Products segment net revenues by major geographic region:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 29, 2025 | June 30, 2024 | June 29, 2025 | June 30, 2024 | ||||||||||||||||||||
| North America | $ | 236.0 | $ | 306.1 | $ | 467.4 | $ | 545.2 | |||||||||||||||
| Europe | 95.7 | 92.0 | 180.7 | 179.5 | |||||||||||||||||||
| Asia Pacific | 63.6 | 62.6 | 117.4 | 111.4 | |||||||||||||||||||
| Latin America | 47.1 | 63.8 | 75.2 | 101.4 | |||||||||||||||||||
| Net revenues | $ | 442.4 | $ | 524.5 | $ | 840.7 | $ | 937.5 |
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
The following table represents consolidated Entertainment segment net revenues by category:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 29, 2025 | June 30, 2024 | June 29, 2025 | June 30, 2024 | ||||||||||||||||||||
| Film and TV | $ | 1.5 | $ | 1.8 | $ | 5.8 | $ | 1.8 | |||||||||||||||
| Family Brands | 14.5 | 17.0 | 36.9 | 45.0 | |||||||||||||||||||
| Net revenues | $ | 16.0 | $ | 18.8 | $ | 42.7 | $ | 46.8 |
The following table represents consolidated net revenues by brand portfolio:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 29, 2025 | June 30, 2024 | June 29, 2025 | June 30, 2024 | ||||||||||||||||||||
| Grow Brands | $ | 732.2 | $ | 704.3 | $ | 1,385.6 | $ | 1,226.0 | |||||||||||||||
| Optimize Brands | 155.5 | 165.0 | 287.6 | 306.8 | |||||||||||||||||||
| Reinvent Brands | 93.1 | 126.0 | 194.7 | 219.8 | |||||||||||||||||||
| Net revenues | $ | 980.8 | $ | 995.3 | $ | 1,867.9 | $ | 1,752.6 |
(3) Sale of Non-Core Entertainment One Film and TV Business
On December 27, 2023, the Company completed the sale of its Entertainment One film and television business ("eOne Film and TV") to Lions Gate Entertainment Corp., Lions Gate Entertainment Inc. and Lions Gate International Motion Pictures S.à.r.l (collectively "Lionsgate"), pursuant to the terms of an Equity Purchase Agreement dated August 3, 2023, among Hasbro and Lionsgate. The Company sold eOne Film and TV for a sales price of $375.0 million in cash, subject to the satisfaction of customary net working capital closing conditions and holdbacks for certain retained liabilities, plus the assumption by Lionsgate of production financing loans.
The Equity Purchase Agreement also included a holdback amount that was retained by Lionsgate upon the execution of the sale but remained recoverable by Hasbro if certain terms were not satisfied by Lionsgate within 30 days of the first anniversary of the agreement. During the six months ended June 29, 2025, the Company was informed by Lionsgate of the satisfaction of the requirements under the agreement and the final holdback amount was settled, resulting in a $25.0 million expense recorded within Loss on disposal of business on the Consolidated Statements of Operations.
During the three and six months ended June 30, 2024, the Company recorded a $15.3 million and $24.4 million, respectively, expense in Loss on disposal of business on the Consolidated Statements of Operations associated with certain purchase price and related adjustments.
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
(4) Earnings (Loss) Per Common Share
Net earnings (loss) per share data were computed as follows:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 29, 2025 | June 30, 2024 | June 29, 2025 | June 30, 2024 | ||||||||||||||||||||
| Net earnings (loss) attributable to Hasbro, Inc. | $ | (855.8) | $ | 138.5 | $ | (757.2) | $ | 196.7 | |||||||||||||||
| Average shares outstanding | 140.3 | 139.5 | 140.0 | 139.2 | |||||||||||||||||||
| Effect of dilutive securities: | |||||||||||||||||||||||
| Options and other share-based awards | — | 0.5 | — | 0.4 | |||||||||||||||||||
| Equivalent Shares | 140.3 | 140.0 | 140.0 | 139.6 | |||||||||||||||||||
| Net earnings (loss) attributable to Hasbro, Inc. per common share | |||||||||||||||||||||||
| Basic | $ | (6.10) | $ | 0.99 | $ | (5.41) | $ | 1.41 | |||||||||||||||
| Diluted | $ | (6.10) | $ | 0.99 | $ | (5.41) | $ | 1.41 |
For the three and six months ended June 29, 2025, options and restricted stock units were each totaling 3.6 million and were excluded from the calculation of diluted earnings per share because to include them would have been anti-dilutive. For the three and six months ended June 30, 2024 options and restricted stock units totaling 2.0 million and 2.3 million, respectively, were excluded from the calculation of diluted earnings per share because to include them would have been anti-dilutive. With respect to 2025, 2.9 million and 2.8 million awards, respectively, would have been included in the calculation of diluted shares had the Company not had a net loss for the three and six months ended June 29, 2025. Assuming that these options and restricted stock units were included, under the treasury stock method, this would have resulted in an additional 1.0 million and 1.1 million shares, respectively, being included in the diluted earnings per share calculation for the three and six months ended June 29, 2025.
(5) Goodwill
Changes in the carrying amount of goodwill, by operating segment, are as follows:
| Wizards of the Coast and Digital Gaming | Consumer Products | Entertainment | Total | |||||||||||||||||||||||
| 2025 | ||||||||||||||||||||||||||
| Balance as of December 29, 2024 | $ | 371.0 | $ | 1,582.0 | $ | 325.2 | $ | 2,278.2 | ||||||||||||||||||
| Impairment of goodwill | — | (1,021.9) | — | (1,021.9) | ||||||||||||||||||||||
| Foreign exchange translation | (0.4) | 0.9 | — | 0.5 | ||||||||||||||||||||||
| Balance as of June 29, 2025 | $ | 370.6 | $ | 561.0 | $ | 325.2 | $ | 1,256.8 |
| Wizards of the Coast and Digital Gaming | Consumer Products | Entertainment | Total | ||||||||||||||||||||||||||
| 2024 | |||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | $ | 371.7 | $ | 1,582.3 | $ | 325.2 | $ | 2,279.2 | |||||||||||||||||||||
| Foreign exchange translation | (0.3) | (0.1) | — | (0.4) | |||||||||||||||||||||||||
| Balance as of June 30, 2024 | $ | 371.4 | $ | 1,582.2 | $ | 325.2 | $ | 2,278.8 |
We assess goodwill and other intangible assets with indefinite lives for impairment each year, or more frequently if events or changes in circumstances indicate an asset may be impaired. For goodwill and indefinite-lived intangible assets, our policy is to assess for impairment as of the beginning of each fiscal fourth quarter. The Company may perform a qualitative assessment and bypass the quantitative impairment testing process, if it is not more likely than not that the carrying value of a reporting unit exceeds its fair value.
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
Due to increased tariffs, including reciprocal tariffs, announced by the U.S. government in April 2025, the escalation of on-going trade policy disputes between international governments, the financial performance of certain reporting units being lower than previously forecasted, and other macroeconomic headwinds, the Company noted downward revisions to operating income and cash flow forecasts for certain of its reporting units within the Consumer Products and Entertainment segments. As a result, the Company performed an interim quantitative impairment test for the North America, Europe, Asia Pacific, and Latin America Consumer Products reporting units, as well as the Family Brands reporting unit within the Entertainment segment. Additionally, due to our ongoing transformation, we concluded that, as of the current quarter, the North America, Europe, Asia Pacific, and Latin America reporting units have similar economic characteristics and should be aggregated for purposes of testing goodwill for impairment. Our conclusion was based on a detailed analysis of the aggregation criteria set forth in FASB Accounting Standard Codification ("ASC") Topic 280, Segment Reporting, and in FASB ASC Topic 350, Intangibles - Goodwill and Other. These reporting units serve similar clients and have similar products, and as of the current quarter have similar sourcing and distribution methods that along with our ongoing transformation has resulted in similar economic characteristics.
As a result of the quantitative tests performed prior to and following the aggregation, the Company determined that the carrying values of our regional Consumer Products reporting units exceeded their expected fair values and recorded pre-tax non-cash impairment charges of $1,021.9 million within the Consolidated Statements of Operations for the three and six months ended June 29, 2025. The fair values of North America and Europe were determined considering a discounted cash flow model which is primarily based on management’s future revenue and cost estimates, which included the estimated impact of tariff policies in effect and the related macroeconomic environment, and a discount rate. The fair value of the Asia Pacific and Latin America reporting units was determined considering a discounted cash flow model weighted equally with the market approach which is primarily based on multiples of comparable public companies. No impairments were recorded related to the Family Brands reporting unit.
(6) Other Comprehensive Earnings (Loss)
Components of Other comprehensive earnings (loss) are presented within the Consolidated Statements of Comprehensive Earnings (Loss). The following table presents the related tax effects on changes in Other comprehensive earnings (loss):
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 29, 2025 | June 30, 2024 | June 29, 2025 | June 30, 2024 | ||||||||||||||||||||
| Other comprehensive earnings (loss), tax effect: | |||||||||||||||||||||||
| Tax benefit on cash flow hedging activities | $ | 1.4 | $ | 1.2 | $ | 2.8 | $ | 1.2 | |||||||||||||||
| Reclassifications to earnings (loss), tax effect: | |||||||||||||||||||||||
| Tax benefit on cash flow hedging activities | 0.1 | 0.3 | 0.3 | 0.5 | |||||||||||||||||||
| Amortization of unrecognized pension and postretirement amounts | — | — | — | — | |||||||||||||||||||
| Total tax effect on other comprehensive earnings (loss) | $ | 1.5 | $ | 1.5 | $ | 3.1 | $ | 1.7 |
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
Changes in the components of Accumulated other comprehensive earnings (loss), net of tax are as follows:
| Pension and Postretirement Amounts | Gains (Losses) on Derivative Instruments | Unrealized Holding Gains (Losses) on Available- for-Sale Securities | Foreign Currency Translation Adjustments | Total Accumulated Other Comprehensive Earnings (Loss) | |||||||||||||||||||||||||
| 2025 | |||||||||||||||||||||||||||||
| Balance at December 29, 2024 | $ | (8.0) | $ | (9.1) | $ | (0.1) | $ | (229.2) | $ | (246.4) | |||||||||||||||||||
| Current period other comprehensive earnings (loss) | — | (14.5) | — | 34.3 | 19.8 | ||||||||||||||||||||||||
| Balance at June 29, 2025 | $ | (8.0) | $ | (23.6) | $ | (0.1) | $ | (194.9) | $ | (226.6) | |||||||||||||||||||
| 2024 | |||||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | (4.2) | $ | (16.8) | $ | (0.1) | $ | (180.4) | $ | (201.5) | |||||||||||||||||||
| Current period other comprehensive earnings (loss) | — | 6.0 | — | (26.7) | (20.7) | ||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | (4.2) | $ | (10.8) | $ | (0.1) | $ | (207.1) | $ | (222.2) |
Gains (Losses) on Derivative Instruments
At June 29, 2025, the Company had remaining deferred losses on foreign currency forward contracts, net of tax, of $10.3 million in Accumulated other comprehensive earnings (loss) ("AOCE"). These instruments hedge payments related to inventory purchased in the six months ended June 29, 2025 or forecasted to be purchased during the remainder of 2025, intercompany expenses expected to be paid or received during 2025 and cash receipts for sales made at the end of the second quarter of 2025 or forecasted to be made in the remainder of 2025. These amounts will be reclassified into the Consolidated Statements of Operations upon the sale of the related inventory or recognition of the related sales or expenses.
In addition to foreign currency forward contracts, the Company entered into hedging contracts on future interest payments related to the 5.10% Notes due 2044. At the date of debt issuance, these contracts were terminated and the fair value on the date of settlement was deferred in AOCE and is being amortized to interest expense over the life of the related Notes using the effective interest rate method. At June 29, 2025, deferred losses, net of tax of $13.3 million related to these instruments remained in AOCE. For each of the three months ended June 29, 2025 and June 30, 2024, previously deferred losses, net of tax, of $0.2 million related to these instruments were reclassified from AOCE to net earnings. For each of the six months ended June 29, 2025 and June 30, 2024, previously deferred losses, net of tax, of $0.4 million related to these instruments were reclassified from AOCE to net earnings.
Of the amounts included in AOCE at June 29, 2025, the Company expects net loss of approximately $5.6 million to be reclassified to the Consolidated Statements of Operations within the next twelve months. However, the amount ultimately realized in earnings is dependent on the fair value of the hedging instruments on the settlement dates.
See Note 12, Derivative Financial Instruments, to the consolidated financial statements for additional discussion on reclassifications from AOCE to earnings.
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
(7) Additional Balance Sheet Information
Components of accrued liabilities were as follows:
| June 29, 2025 | June 30, 2024 | December 29, 2024 | |||||||||||||||
| Contract liabilities - current | $ | 202.7 | $ | 257.5 | $ | 236.5 | |||||||||||
| Accrued royalties expense | 171.1 | 145.4 | 160.5 | ||||||||||||||
| Payroll and management incentives | 69.3 | 51.8 | 121.1 | ||||||||||||||
| Advertising | 64.6 | 25.8 | 58.7 | ||||||||||||||
| Other taxes | 47.6 | 48.8 | 60.9 | ||||||||||||||
| General vendor accruals | 38.4 | 43.8 | 46.1 | ||||||||||||||
| Lag & cancellation charges | 36.0 | 76.3 | 48.9 | ||||||||||||||
| Freight | 34.9 | 25.7 | 27.0 | ||||||||||||||
| Severance | 33.3 | 63.0 | 50.2 | ||||||||||||||
| Accrued income taxes | 31.5 | 108.6 | 93.3 | ||||||||||||||
| Interest | 29.8 | 33.7 | 31.3 | ||||||||||||||
| Lease liability - current | 27.9 | 32.7 | 29.8 | ||||||||||||||
| Defined contributions plans | 17.8 | 19.2 | 21.4 | ||||||||||||||
| Professional fees | 16.9 | 10.1 | 18.2 | ||||||||||||||
| Participations and residuals | 10.0 | 17.8 | 8.8 | ||||||||||||||
| Insurance | 8.2 | 14.3 | 11.3 | ||||||||||||||
| Accrued expenses - productions | 0.7 | 0.5 | 0.7 | ||||||||||||||
| Other | 47.5 | 57.6 | 35.1 | ||||||||||||||
| Total accrued liabilities | $ | 888.2 | $ | 1,032.6 | $ | 1,059.8 |
Prepaid expenses and other current assets include contract assets, current of $129.2 million, $159.3 million, and $179.5 million as of June 29, 2025, June 30, 2024, and December 29, 2024, respectively.
Other assets include deferred tax assets of $443.7 million, $397.4 million, and $424.6 million as of June 29, 2025, June 30, 2024, and December 29, 2024, respectively, and unamortized software development costs of $323.3 million, $202.5 million, and $264.4 million as of June 29, 2025, June 30, 2024, and December 29, 2024, respectively.
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
(8) Long-Term Debt and Other Financing
The carrying costs, which are equal to the outstanding principal amounts, and fair values of the Company's long-term borrowings are as follows:
| June 29, 2025 | June 30, 2024 | December 29, 2024 | |||||||||||||||||||||||||||||||||
| Carrying Cost | Fair Value | Carrying Cost | Fair Value | Carrying Cost | Fair Value | ||||||||||||||||||||||||||||||
| 3.90% Notes Due 2029 | $ | 900.0 | $ | 866.4 | $ | 900.0 | $ | 830.9 | $ | 900.0 | $ | 845.6 | |||||||||||||||||||||||
| 3.55% Notes Due 2026 | 554.9 | 547.2 | 675.0 | 644.8 | 591.9 | 578.0 | |||||||||||||||||||||||||||||
| 6.05% Notes Due 2034 | 500.0 | 514.9 | 500.0 | 500.1 | 500.0 | 502.2 | |||||||||||||||||||||||||||||
| 6.35% Notes Due 2040 | 500.0 | 507.3 | 500.0 | 512.1 | 500.0 | 507.5 | |||||||||||||||||||||||||||||
| 3.50% Notes Due 2027 | 475.0 | 463.9 | 500.0 | 471.5 | 500.0 | 481.5 | |||||||||||||||||||||||||||||
| 5.10% Notes Due 2044 | 300.0 | 258.5 | 300.0 | 258.0 | 300.0 | 261.3 | |||||||||||||||||||||||||||||
| 6.60% Debentures Due 2028 | 109.9 | 116.8 | 109.9 | 114.2 | 109.9 | 114.4 | |||||||||||||||||||||||||||||
| 3.00% Notes Due 2024 | — | — | 500.0 | 494.6 | — | — | |||||||||||||||||||||||||||||
| Total long-term debt | $ | 3,339.8 | $ | 3,275.0 | $ | 3,984.9 | $ | 3,826.2 | $ | 3,401.8 | $ | 3,290.5 | |||||||||||||||||||||||
| Less: Deferred debt expenses | 18.9 | — | 23.5 | — | 21.0 | — | |||||||||||||||||||||||||||||
| Less: Current portion | — | — | 500.0 | — | — | — | |||||||||||||||||||||||||||||
| Long-term debt | $ | 3,320.9 | $ | 3,275.0 | $ | 3,461.4 | $ | 3,826.2 | $ | 3,380.8 | $ | 3,290.5 |
For the six months ended June 29, 2025, the Company repurchased $61.9 million of its 2026 and 2027 Notes. For the three and six months ended June 29, 2025, the Company recorded a gain on extinguishment of $0.2 million and $1.4 million, respectively, which were recorded in Other expense (income), net in the Consolidated Statements of Operations.
Other Financing Arrangements
The Company's third amended and restated revolving credit facility with Bank of America, as administrative agent, swing line lender, a letter of credit issuer and a lender and certain other financial institutions as lenders thereto (the "Amended Revolving Credit Facility") provides the Company with commitments having a maximum aggregate principal amount of $1.25 billion, of which the Company has zero outstanding borrowings as of June 29, 2025. The Amended Revolving Credit Agreement 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. It also provides for a potential additional incremental commitment increase of up to $500.0 million subject to agreement of the lenders.
The Company also 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 program that remain unpaid by the Company were $67.8 million, $72.4 million, and $66.2 million as of June 29, 2025, June 30, 2024, and December 29, 2024, respectively. These obligations are presented within Accounts payable in our Consolidated Balance Sheets. The activity related to this program is reflected within the operating activities section of the Consolidated Statements of Cash Flows.
In June 2025, the Company entered into an uncommitted money market line of credit agreement (the “Money Market Credit Facility”) to provide the Company with access to short-term cash advances with an aggregate principal amount of up to $100.0 million. The Money Market Credit Facility is intended to support the Company’s short-term liquidity needs, including working capital and general corporate purposes.
Under the terms of the Money Market Credit Facility, each loan borrowing is subject to the lender’s sole and absolute discretion with no obligation to fund and bears interest at a variable rate agreed upon at the time of each borrowing.
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
The Money Market Credit Facility has no commitment fee or termination fee. Each advance under the Money Market Credit Facility has a maturity date of less than 90 days from the borrowing date, and the Company may voluntarily prepay any outstanding advances without premium or penalty, subject to reimbursement of actual breakage costs, if any. The Money Market Credit Facility may be terminated by the lender at any time upon written notice and is subject to customary representations, warranties, and covenants. There was no outstanding balance as of June 29, 2025.
(9) Investments in Productions and Investments in Acquired Content Rights
Investments in productions and investments in acquired content rights are predominantly monetized on a title-by-title basis and are recorded within Other assets in the Company's Consolidated Balance Sheets to the extent they are considered recoverable against future revenues. These amounts are being amortized to program cost amortization using a model that reflects the consumption of the asset as it is released through various channels including broadcast licenses, theatrical release and home entertainment. Amounts capitalized are reviewed periodically on an individual title basis and any portion of the unamortized amount that appears not to be recoverable from future net revenues is expensed as part of program cost amortization during the period the loss becomes evident.
The Company's unamortized investments in productions and investments in acquired content rights consisted of the following:
| June 29, 2025 | June 30, 2024 | December 29, 2024 | |||||||||||||||||||||||||||
| Investment in Films and Television Programs: | |||||||||||||||||||||||||||||
| Individual Monetization | |||||||||||||||||||||||||||||
| Released, net of amortization | $ | 56.0 | $ | 54.6 | $ | 62.4 | |||||||||||||||||||||||
| Completed and not released | 9.9 | — | — | ||||||||||||||||||||||||||
| In production | 1.5 | 30.7 | 10.8 | ||||||||||||||||||||||||||
| Pre-production | 9.3 | 6.9 | 7.4 | ||||||||||||||||||||||||||
| 76.7 | 92.2 | 80.6 | |||||||||||||||||||||||||||
| Film/TV Group Monetization | |||||||||||||||||||||||||||||
| Released, net of amortization | 31.4 | 43.1 | 37.5 | ||||||||||||||||||||||||||
| Investment in Other Programming | |||||||||||||||||||||||||||||
| Released, net of amortization | 7.9 | 0.3 | 6.0 | ||||||||||||||||||||||||||
| Completed and not released | — | 0.7 | — | ||||||||||||||||||||||||||
| In production | 1.4 | 4.8 | 0.7 | ||||||||||||||||||||||||||
| Pre-production | — | 3.6 | — | ||||||||||||||||||||||||||
| 9.3 | 9.4 | 6.7 | |||||||||||||||||||||||||||
| Total Program Investments | $ | 117.4 | $ | 144.7 | $ | 124.8 |
The Company's program cost amortization that related to investments in production that were released during the three and six months ended June 29, 2025 were $6.2 million and $13.6 million, respectively. The Company's program cost amortization that related to investments in production that were released during the three and six months ended June 30, 2024 were $8.5 million and $16.6 million, respectively.
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
(10) Income Taxes
The Company and its subsidiaries file income tax returns in the United States and various state and international jurisdictions. In the normal course of business, the Company is regularly audited by U.S. federal, state and local, and international tax authorities in various tax jurisdictions.
The effective tax rate ("ETR") was (4.9)% and (11.4)% for the three and six months ended June 29, 2025, respectively, and 24.2% and 25.1% for the three and six months ended June 30, 2024, respectively. The following items impacted the ETR for 2025 and 2024:
-
During the three months ended June 29, 2025 the Company recorded a non-cash goodwill impairment of $1,021.9 million with no corresponding tax benefit within the Consumer Products segment. The Company also recorded a net discrete tax benefit of $5.9 million, primarily associated with the release of a valuation allowance.
-
During the three months ended June 30, 2024 the Company recorded an unfavorable adjustment to the Loss on disposal of the eOne Film and TV business of $15.3 million with no corresponding tax benefit. The Company also recorded a net discrete tax benefit of $1.1 million, primarily associated with uncertain tax positions.
-
During the six months ended June 29, 2025 the Company recorded a non-cash goodwill impairment of $1,021.9 million within the Consumer Products segment and an unfavorable adjustment to the Loss on disposal of the eOne Film and TV business of $25.0 million. Neither adjustment had a corresponding tax benefit. The Company also recorded a net discrete tax benefit of $6.2 million, primarily associated with the release of a valuation allowance.
-
During the six months ended June 30, 2024 the Company recorded unfavorable adjustments to the Loss on disposal of the eOne Film and TV business of $24.4 million with no corresponding tax benefit. The Company also recorded a net discrete tax expense of $0.7 million, primarily associated with stock-based compensation.
On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act (the “Act”) into law. Under U.S. GAAP, the impact of changes in tax law are recognized as a component of the income tax provision related to continuing operations with the entire impact recognized as a discrete item in the quarter of enactment. The Act had no impact on the Company’s income tax provision during the three and six months ended June 29, 2025, and the Company is currently evaluating the impact of the Act to our consolidated financial statements in future quarters.
(11) Fair Value of Financial Instruments
The Company measures certain financial instruments at fair value. The fair value hierarchy consists of three levels:
-
Level 1 fair values are based on quoted market prices in active markets for identical assets or liabilities that the entity has the ability to access;
-
Level 2 fair values are those based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities;
-
Level 3 fair values are based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
The Company had the following assets and liabilities measured at fair value in its Consolidated Balance Sheets (excluding assets for which the fair value is measured using net asset value per share):
| Fair Value Measurements Using: | |||||||||||||||||||||||
| Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
| June 29, 2025 | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Available-for-sale securities | $ | 10.8 | $ | 10.8 | $ | — | $ | — | |||||||||||||||
| Derivatives | 2.3 | — | 2.3 | — | |||||||||||||||||||
| Total assets | $ | 13.1 | $ | 10.8 | $ | 2.3 | $ | — | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Derivatives | $ | 11.5 | $ | — | $ | 11.5 | $ | — | |||||||||||||||
| Total liabilities | $ | 11.5 | $ | — | $ | 11.5 | $ | — | |||||||||||||||
| June 30, 2024 | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Short-term investments | $ | 483.0 | $ | 483.0 | $ | — | $ | — | |||||||||||||||
| Available-for-sale securities | 0.8 | 0.8 | — | — | |||||||||||||||||||
| Derivatives | 3.5 | — | 3.5 | — | |||||||||||||||||||
| Total assets | $ | 487.3 | $ | 483.8 | $ | 3.5 | $ | — | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Derivatives | $ | 8.5 | $ | — | $ | 8.5 | $ | — | |||||||||||||||
| Option agreement | 1.7 | — | — | 1.7 | |||||||||||||||||||
| Total liabilities | $ | 10.2 | $ | — | $ | 8.5 | $ | 1.7 | |||||||||||||||
| December 29, 2024 | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Available-for-sale securities | $ | 0.6 | $ | 0.6 | $ | — | $ | — | |||||||||||||||
| Derivatives | 9.7 | — | 9.7 | — | |||||||||||||||||||
| Total assets | $ | 10.3 | $ | 0.6 | $ | 9.7 | $ | — | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Derivatives | $ | 1.7 | $ | — | $ | 1.7 | $ | — | |||||||||||||||
| Total Liabilities | $ | 1.7 | $ | — | $ | 1.7 | $ | — |
At June 29, 2025, the Company held $10.0 million of U.S. Treasury bills. These investments are recorded at fair value and recorded in Other assets in the Company's Consolidated Balance Sheet, with unrealized gains and losses excluded from net income and is recorded in components of Other comprehensive earnings (loss), net of related tax effects, until realized. At June 30, 2024, the Company held $483.0 million of U.S. Treasury bills which were classified as held-to-maturity and carried at amortized cost, and were recorded in Short-term investments in the Company's Consolidated Balance Sheet. This amount reflects the proceeds from the Company's $500.0 million debt offering completed in May 2024, which the proceeds, together with available cash, were used to repay the 2024 Notes.
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
The Company's derivatives primarily consist of foreign currency forward and option contracts. The Company uses current forward rates of the respective foreign currencies to measure the fair value of these contracts. There were no changes in these valuation techniques during the six months ended June 29, 2025. There were no material changes to fair value measurements of the Company's financial instruments which use significant unobservable inputs (Level 3) for six months ended June 30, 2024.
Other Fair Value Measurements
The Company's financial instruments include cash and cash equivalents, accounts receivable, short-term borrowings, accounts payable and certain Accrued liabilities. At June 29, 2025, June 30, 2024, and December 29, 2024, the carrying cost of these instruments approximated their fair value. The Company's financial instruments at June 29, 2025, June 30, 2024, and December 29, 2024 also include certain assets and liabilities measured at fair value, as described above. See Note 8, Long-Term Debt and Other Financing, to the consolidated financial statements for the fair value of the Company's outstanding debt.
(12) Derivative Financial Instruments
The Company uses foreign currency forward and option contracts to mitigate the impact of currency rate fluctuations on firmly committed and projected future foreign currency transactions. These over-the-counter contracts, which hedge future currency requirements related to purchases of inventory, product sales and other cross-border transactions not denominated in the functional currency of the business unit, are primarily denominated in United States and Hong Kong dollars, and Euros. All contracts are entered into with a number of counterparties, all of which are major financial institutions. The Company believes that a default by a single counterparty would not have a material adverse effect on the financial condition of the Company. The Company does not enter into derivative financial instruments for speculative purposes.
Cash Flow Hedges
All of the Company's designated foreign currency forward contracts are considered to be cash flow hedges. These instruments hedge a portion of the Company's currency requirements associated with anticipated inventory purchases, product sales and other cross-border transactions, primarily for the remainder of 2025, and into 2026.
The notional amounts and fair values of the Company's foreign currency forward contracts designated as cash flow hedging instruments were as follows:
| June 29, 2025 | June 30, 2024 | December 29, 2024 | |||||||||||||||||||||||||||||||||
| Hedged transaction | Notional Amount | Fair Value | Notional Amount | Fair Value | Notional Amount | Fair Value | |||||||||||||||||||||||||||||
| Inventory purchases | $ | 254.2 | $ | (11.8) | $ | 172.2 | $ | 5.3 | $ | 131.5 | $ | 8.0 | |||||||||||||||||||||||
| Sales | 125.8 | (0.4) | 110.5 | (0.7) | 86.0 | (1.4) | |||||||||||||||||||||||||||||
| Other | 65.8 | 0.8 | 30.5 | 0.5 | 22.8 | 0.9 | |||||||||||||||||||||||||||||
| Total | $ | 445.8 | $ | (11.4) | $ | 313.2 | $ | 5.1 | $ | 240.3 | $ | 7.5 |
The Company has a master agreement with each of its counterparties that allows for the netting of outstanding forward contracts. The fair values of the Company's foreign currency forward contracts designated as cash flow hedges are recorded in the Consolidated Balance Sheets as follows:
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
| June 29, 2025 | June 30, 2024 | December 29, 2024 | |||||||||||||||
| Prepaid expenses and other current assets | |||||||||||||||||
| Unrealized gains | $ | 0.4 | $ | 3.4 | $ | 9.1 | |||||||||||
| Unrealized losses | (0.3) | (1.7) | (1.1) | ||||||||||||||
| Net unrealized gains | $ | 0.1 | $ | 1.7 | $ | 8.0 | |||||||||||
| Other assets | |||||||||||||||||
| Unrealized gains | $ | — | $ | 1.9 | $ | — | |||||||||||
| Unrealized losses | — | (0.1) | — | ||||||||||||||
| Net unrealized gains | $ | — | $ | 1.8 | $ | — | |||||||||||
| Accrued liabilities | |||||||||||||||||
| Unrealized gains | $ | 3.0 | $ | 0.2 | $ | 0.5 | |||||||||||
| Unrealized losses | (9.0) | (3.2) | (1.0) | ||||||||||||||
| Net unrealized losses | $ | (6.0) | $ | (3.0) | $ | (0.5) | |||||||||||
| Other liabilities | |||||||||||||||||
| Unrealized gains | $ | 0.4 | $ | — | $ | — | |||||||||||
| Unrealized losses | (5.9) | — | — | ||||||||||||||
| Net unrealized losses | $ | (5.5) | $ | — | $ | — |
Net gains (losses) on cash flow hedging activities have been reclassified from other comprehensive earnings (loss) to net earnings as follows:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 29, 2025 | June 30, 2024 | June 29, 2025 | June 30, 2024 | ||||||||||||||||||||
| Statements of Operations Classification | |||||||||||||||||||||||
| Cost of sales | $ | 0.7 | $ | — | $ | 1.8 | $ | 0.1 | |||||||||||||||
| Net revenues | 0.2 | (0.5) | (0.1) | (0.6) | |||||||||||||||||||
| Other | (0.1) | (0.2) | — | (0.3) | |||||||||||||||||||
| Net realized gains (losses) | $ | 0.8 | $ | (0.7) | $ | 1.7 | $ | (0.8) |
Undesignated Hedges
The Company also enters into foreign currency forward contracts to minimize the impact of changes in the fair value of intercompany loans due to foreign currency changes. The Company does not use hedge accounting for these contracts as changes in the fair values of these contracts are substantially offset by changes in the fair value of the intercompany loans. As of June 29, 2025, June 30, 2024 and December 29, 2024, the total notional amounts of the Company's undesignated derivative instruments were $263.4 million, $246.6 million, and $289.6 million, respectively.
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
The fair values of the Company's undesignated derivative financial instruments were recorded in the Consolidated Balance Sheets as follows:
| June 29, 2025 | June 30, 2024 | December 29, 2024 | |||||||||||||||
| Prepaid expenses and other current assets | |||||||||||||||||
| Unrealized gains | $ | 2.2 | $ | — | $ | 1.9 | |||||||||||
| Unrealized losses | — | — | (0.2) | ||||||||||||||
| Net unrealized gains | $ | 2.2 | $ | — | $ | 1.7 | |||||||||||
| Accrued liabilities | |||||||||||||||||
| Unrealized gains | $ | — | $ | 0.4 | $ | — | |||||||||||
| Unrealized losses | — | (5.8) | (1.2) | ||||||||||||||
| Net unrealized losses | $ | — | $ | (5.4) | $ | (1.2) |
The Company recorded a net gain of $7.0 million and $9.2 million for three and six months ended June 29, 2025, respectively, and a net loss of $4.9 million and a net gain of $4.2 million for three and six months ended June 30, 2024, respectively, on these instruments to Other (income) expense, net relating to the change in fair value of such derivatives, substantially offsetting gains and losses from the change in fair value of intercompany loans to which the contracts relate.
For additional information related to the Company's derivative financial instruments (see Note 6, Other Comprehensive Earnings (Loss) and Note 11, Fair Value of Financial Instruments, to the consolidated financial statements).
(13) Restructuring Actions
Starting in 2022, the Company implemented its Operational Excellence program ("the Program"), an ongoing enterprise-wide initiative intended to improve our business through programs that include targeted cost-savings, supply chain transformation and certain other restructuring actions designed to drive growth and enhance shareholder value. The Company's organizational structure changes have resulted and will further result in workforce reductions as well as the reallocation of people and resources. The Company currently anticipates that these changes will be substantially complete over the next nine to twelve months.
Charges related to the Program were recorded in Selling, distribution and administration expense within Corporate and Other. Going forward, the Company may implement further cost-saving initiatives under the Program that could result in additional restructuring charges including severance and other employee charges.
The liability balance associated with the Program related restructuring actions consisted of severance payments recorded within Other accrued liabilities in the Consolidated Balance Sheets as follows:
| Six Months Ended | |||||||||||||||||||||||
| Operational Excellence | June 29, 2025 | June 30, 2024 | |||||||||||||||||||||
| Balance at beginning of the year | $ | 46.9 | $ | 81.2 | |||||||||||||||||||
| Charges | 8.6 | 7.4 | |||||||||||||||||||||
| Payments | (22.0) | (28.1) | |||||||||||||||||||||
| Ending Balance | $ | 33.5 | $ | 60.5 |
The following table presents the restructuring charges incurred to date under the Program, along with the estimated charges expected to be incurred on approved initiatives under the Program as of June 29, 2025:
| Operational Excellence | Total | ||||||||||||||||
| Charges incurred to date | $ | 163.1 | |||||||||||||||
| Estimated charges to be incurred on approved initiatives | — | ||||||||||||||||
| Total expected charges on approved initiatives | $ | 163.1 |
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
(14) Commitments and Contingencies
Contingencies – The Company is subject to claims related to product and other commercial matters. In determining costs to accrue related to these items, the Company carefully analyzes cases and considers the likelihood of adverse judgments or outcomes, as well as the potential range of possible loss. The Company accrues for matters when losses are both probable and estimable. Any amounts accrued for these matters are monitored on an ongoing basis and are updated based on new developments or new information as it becomes available for each matter.
Litigation and Other Claims – The Company from time to time may be subject to lawsuits and other claims related to product, commercial, employee, environmental and other matters in the normal course of business. In determining costs to accrue related to these items, the Company carefully analyzes cases and considers the likelihood of adverse judgments or outcomes, as well as the potential range of possible loss. The Company accrues for matters when losses are both probable and estimable. Any amounts accrued for these matters are monitored on an ongoing basis and are updated based on new developments or new information as it becomes available for each matter.
Environmental Liabilities - The Company monitors for any estimated environmental contingencies related to its current physical locations and former owned or leased facilities in which it is responsible for environmental matters. The Company has estimated a $31.1 million environmental liability related to a previously owned manufacturing facility (environmental liability assumed as part of a historical acquisition), in which the Company is solely responsible for the mitigation and remediation activities.
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, except as disclosed in Note 8, Long-Term Debt and Other Financing, to the consolidated financial statements.
(15) Segment Reporting
The Company's reportable segments are strategic business units that offer different products and services. They are managed separately because the business requires different technology and marketing strategies. The Company's reportable segments are as follows:
-
The Wizards of the Coast and Digital Gaming business engages in the promotion of the Company's brands through the development of trading card, role-playing and digital game experiences based on Hasbro and Wizards of the Coast games. Additionally, we license certain of our brands to other third-party digital game developers who transform Hasbro brand-based characters and other intellectual properties, into digital gaming experiences.
-
The Consumer Products segment engages in the sourcing, marketing and sales of toy and game products around the world. The Consumer Products business also promotes the Company's brands through the out-licensing of our trademarks, characters and other brand and intellectual property rights to third parties, through the sale of branded consumer products such as toys and apparel. Additionally, through license agreements with third parties, we develop and sell products based on popular third-party brands.
-
The Entertainment segment engages in the development and production of Hasbro-branded entertainment content including film, television, children’s programming, digital content and live entertainment focused on Hasbro-owned properties.
Corporate and Other, which does not meet the criteria to be an operating segment, provides management and administrative services to the Company's principal reporting segments described above and consists of unallocated corporate expenses and administrative costs and activities not considered when evaluating segment performance as well as certain assets benefiting more than one segment.
Segment performance is measured at the operating profit level. Intersegment sales and transfers are reflected in management reports at amounts approximating cost. Certain shared costs, including global development and marketing expenses and corporate administration, are allocated to segments based upon expenses and foreign exchange rates fixed at the beginning of the year, with adjustments to actual expenses and foreign exchange rates included in Corporate and Other.
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
Information by segment and a reconciliation to reported amounts for the three months ended June 29, 2025 are as follows:
| Wizards of the Coast and Digital Gaming | Consumer Products | Entertainment | Corporate and Other | Total | ||||||||||||||||||||||||||||
| Revenues | $ | 571.2 | $ | 493.4 | $ | 28.1 | $ | 41.2 | $ | 1,133.9 | ||||||||||||||||||||||
| Less: Intersegment revenue | 48.8 | 51.0 | 12.1 | 41.2 | 153.1 | |||||||||||||||||||||||||||
| Total net revenues | 522.4 | 442.4 | 16.0 | — | 980.8 | |||||||||||||||||||||||||||
| Cost of sales | 78.2 | 145.5 | 1.6 | — | 225.3 | |||||||||||||||||||||||||||
| Program cost amortization | — | — | 6.2 | — | 6.2 | |||||||||||||||||||||||||||
| Royalties | 40.6 | 56.7 | (11.5) | (1.3) | 84.5 | |||||||||||||||||||||||||||
| Advertising | 26.8 | 36.6 | 0.1 | 0.1 | 63.6 | |||||||||||||||||||||||||||
| Amortization of intangible assets | 2.1 | 10.1 | 4.9 | 0.1 | 17.2 | |||||||||||||||||||||||||||
| Distribution (1) | 10.9 | 33.3 | — | 0.9 | 45.1 | |||||||||||||||||||||||||||
| Managed expense (2) | 121.9 | 1,189.7 | 8.6 | 16.9 | 1,337.1 | |||||||||||||||||||||||||||
| Operating profit (loss) | $ | 241.9 | $ | (1,029.5) | $ | 6.1 | $ | (16.7) | $ | (798.2) | ||||||||||||||||||||||
| Reconciliation to Earnings (loss) before income taxes: | ||||||||||||||||||||||||||||||||
| Interest expense | 40.6 | |||||||||||||||||||||||||||||||
| Interest income | (5.4) | |||||||||||||||||||||||||||||||
| Other (income) expense, net | (18.7) | |||||||||||||||||||||||||||||||
| Earnings before income taxes | $ | (814.7) |
(1) Distribution expenses consist of shipping and warehousing expense and is included in Selling, distribution and administration in the Consolidated Statement of Operations.
(2) Managed expenses consist of product development, selling and administrative expense and impairment of goodwill. Product development is included in Product Development in the Consolidated Statement of Operations. Selling and administrative expense is included in Selling, distribution and administration in the Consolidated Statement of Operations. Impairment of goodwill is included in Impairment of goodwill in the Consolidated Statement of Operations. Managed expenses for the Consumer Products segment included a $1021.9 million non-cash loss associated with the impairment of the reporting units within the Consumer Products segment. See Note 5, Goodwill, to the consolidated financial statements for further information.
Information by segment and a reconciliation to reported amounts for the three months ended June 30, 2024 are as follows:
| Wizards of the Coast and Digital Gaming | Consumer Products | Entertainment | Corporate and Other | Total | ||||||||||||||||||||||||||||
| Revenues | $ | 488.0 | $ | 589.2 | $ | 30.8 | $ | 34.2 | $ | 1,142.2 | ||||||||||||||||||||||
| Less: Intersegment revenue | 36.0 | 64.7 | 12.0 | 34.2 | 146.9 | |||||||||||||||||||||||||||
| Total net revenues | 452.0 | 524.5 | 18.8 | — | 995.3 | |||||||||||||||||||||||||||
| Cost of sales (1) | 67.8 | 194.6 | 1.9 | (26.6) | 237.7 | |||||||||||||||||||||||||||
| Program cost amortization | — | — | 8.5 | — | 8.5 | |||||||||||||||||||||||||||
| Royalties | 10.7 | 61.1 | (17.2) | 0.7 | 55.3 | |||||||||||||||||||||||||||
| Advertising | 20.2 | 38.0 | 0.1 | 2.1 | 60.4 | |||||||||||||||||||||||||||
| Amortization of intangible assets | 2.0 | 11.1 | 3.8 | 0.2 | 17.1 | |||||||||||||||||||||||||||
| Distribution (2) | 7.7 | 39.0 | — | (0.1) | 46.6 | |||||||||||||||||||||||||||
| Managed expense (1) (3) | 96.5 | 190.0 | 22.7 | 48.4 | 357.6 | |||||||||||||||||||||||||||
| Operating profit (loss) | $ | 247.1 | $ | (9.3) | $ | (1.0) | $ | (24.7) | $ | 212.1 | ||||||||||||||||||||||
| Reconciliation to Earnings (loss) before income taxes: | ||||||||||||||||||||||||||||||||
| Interest expense | 43.0 | |||||||||||||||||||||||||||||||
| Interest income | (13.0) | |||||||||||||||||||||||||||||||
| Other (income) expense, net | (0.8) | |||||||||||||||||||||||||||||||
| Earnings before income taxes | $ | 182.9 |
(1) During the three months ended June 30, 2024, the Company recorded two non-recurring prior year adjustments: (i) a $31.1 million expense related to historical environmental liabilities that was recorded in managed expense and (ii) a $26.7 million benefit related to over-accrual of vendor commitment liabilities that was recorded in Cost of sales. See Note 1, Basis of Presentation, to the consolidated financial statements for further information. Both of these originally related to the Consumer Products segment; however, because the non-recurring nature of these
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
adjustments are related to historical periods and not associated with the on-going future operations of the Consumer Products segment, the Company recorded the error corrections within Corporate and Other.
(2) Distribution expenses consist of shipping and warehousing expense and is included in Selling, distribution and administration in the Consolidated Statement of Operations.
(3) Managed expenses consist of product development and selling and administrative expense. Product development is included in Product Development in the Consolidated Statement of Operations. Selling and administrative expense is included in Selling, distribution and administration in the Consolidated Statement of Operations. Managed expenses for the Entertainment segment included a $15.3 million loss associated with the sale of the eOne Film and TV business.
Information by segment and a reconciliation to reported amounts for the six months ended June 29, 2025 are as follows:
| Wizards of the Coast and Digital Gaming | Consumer Products | Entertainment | Corporate and Other | Total | ||||||||||||||||||||||||||||
| Revenues | $ | 1,076.9 | $ | 926.8 | $ | 66.1 | $ | 70.0 | $ | 2,139.8 | ||||||||||||||||||||||
| Less: Intersegment revenue | 92.4 | 86.1 | 23.4 | 70.0 | 271.9 | |||||||||||||||||||||||||||
| Total net revenues | 984.5 | 840.7 | 42.7 | — | 1,867.9 | |||||||||||||||||||||||||||
| Cost of sales | 152.0 | 275.3 | 2.7 | (0.2) | 429.8 | |||||||||||||||||||||||||||
| Program cost amortization | — | — | 13.6 | — | 13.6 | |||||||||||||||||||||||||||
| Royalties | 50.8 | 107.4 | (19.9) | 3.2 | 141.5 | |||||||||||||||||||||||||||
| Advertising | 53.1 | 67.1 | 0.2 | (1.4) | 119.0 | |||||||||||||||||||||||||||
| Amortization of intangible assets | 4.2 | 20.3 | 9.6 | 0.1 | 34.2 | |||||||||||||||||||||||||||
| Distribution (1) | 20.0 | 65.1 | — | 0.2 | 85.3 | |||||||||||||||||||||||||||
| Managed expense (2) | 232.6 | 1,379.0 | 41.4 | 19.0 | 1,672.0 | |||||||||||||||||||||||||||
| Operating profit (loss) | $ | 471.8 | $ | (1,073.5) | $ | (4.9) | $ | (20.9) | $ | (627.5) | ||||||||||||||||||||||
| Reconciliation to Earnings (loss) before income taxes: | ||||||||||||||||||||||||||||||||
| Interest expense | 82.2 | |||||||||||||||||||||||||||||||
| Interest income | (14.3) | |||||||||||||||||||||||||||||||
| Other (income) expense, net | (17.3) | |||||||||||||||||||||||||||||||
| Earnings before income taxes | $ | (678.1) |
(1) Distribution expenses consist of shipping and warehousing expense and is included in Selling, distribution and administration in the Consolidated Statement of Operations.
(2) Managed expenses consist of product development, selling and administrative expense, impairment of goodwill, and loss on disposal of business. Product development is included in Product Development in the Consolidated Statement of Operations. Selling and administrative expense is included in Selling, distribution and administration in the Consolidated Statement of Operations. Impairment of goodwill is included in the Impairment of goodwill in the Consolidated Statement of Operations. Loss on disposal of business is included in Loss on disposal of business in the Consolidated Statement of Operations. Managed expenses for the Consumer Products segment included a $1021.9 million non-cash loss associated with the impairment of the reporting units within the Consumer Products segment. See Note 5, Goodwill, to the consolidated financial statements for further information. Managed expenses for the Entertainment segment included a $25.0 million non-cash loss associated with the sale of the eOne Film and TV business.
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
Information by segment and a reconciliation to reported amounts for the six months ended June 30, 2024 are as follows:
| Wizards of the Coast and Digital Gaming | Consumer Products | Entertainment | Corporate and Other | Total | ||||||||||||||||||||||||||||
| Revenues | $ | 842.2 | $ | 1,041.5 | $ | 67.3 | $ | 63.4 | $ | 2,014.4 | ||||||||||||||||||||||
| Less: Intersegment revenue | 73.9 | 104.0 | 20.5 | 63.4 | 261.8 | |||||||||||||||||||||||||||
| Total net revenues | 768.3 | 937.5 | 46.8 | — | 1,752.6 | |||||||||||||||||||||||||||
| Cost of sales (1) | 129.1 | 336.2 | 3.3 | (26.7) | 441.9 | |||||||||||||||||||||||||||
| Program cost amortization | — | — | 16.6 | — | 16.6 | |||||||||||||||||||||||||||
| Royalties | 21.2 | 109.4 | (25.2) | 0.8 | 106.2 | |||||||||||||||||||||||||||
| Advertising | 44.5 | 65.6 | 0.3 | 1.5 | 111.9 | |||||||||||||||||||||||||||
| Amortization of intangible assets | 4.1 | 22.2 | 7.6 | 0.2 | 34.1 | |||||||||||||||||||||||||||
| Distribution (2) | 14.4 | 72.6 | — | — | 87.0 | |||||||||||||||||||||||||||
| Managed expense (1) (3) | 185.1 | 387.7 | 39.4 | 14.4 | 626.6 | |||||||||||||||||||||||||||
| Operating profit (loss) | $ | 369.9 | $ | (56.2) | $ | 4.8 | $ | 9.8 | $ | 328.3 | ||||||||||||||||||||||
| Reconciliation to Earnings (loss) before income taxes: | ||||||||||||||||||||||||||||||||
| Interest expense | 81.5 | |||||||||||||||||||||||||||||||
| Interest income | (21.3) | |||||||||||||||||||||||||||||||
| Other (income) expense, net | 4.2 | |||||||||||||||||||||||||||||||
| Earnings before income taxes | $ | 263.9 |
(1) During the six months ended June 30, 2024, the Company recorded two non-recurring prior year adjustments: (i) a $31.1 million expense related to historical environmental liabilities that was recorded in managed expense and (ii) a $26.7 million benefit related to over-accrual of vendor commitment liabilities that was recorded in Cost of sales. See Note 1, Basis of Presentation, to the consolidated financial statements for further information. Both of these originally related to the Consumer Products segment; however, because the non-recurring nature of these adjustments are related to historical periods and not associated with the on-going future operations of the Consumer Products segment, the Company recorded the error corrections within Corporate and Other.
(2) Distribution expenses consist of shipping and warehousing expense and is included in Selling, distribution and administration in the Consolidated Statement of Operations.
(3) Managed expenses consist of product development, and selling and administrative expense. Product development is included in Product Development in the Consolidated Statement of Operations. Selling and administrative expense is included in Selling, distribution and administration in the Consolidated Statement of Operations. Loss on disposal of business is included in Loss on disposal of business in the Consolidated Statement of Operations. Managed expenses for the Entertainment segment included a $24.4 million loss associated with the sale of the eOne Film and TV business.
Total assets information by segments is as follows:
| (In millions) | June 29, 2025 | June 30, 2024 | December 29, 2024 | ||||||||||||||
| Total Assets | |||||||||||||||||
| Wizards of the Coast and Digital Gaming | $ | 6,856.5 | $ | 5,111.4 | $ | 5,778.4 | |||||||||||
| Consumer Products | 8,616.5 | 6,930.1 | 7,785.2 | ||||||||||||||
| Entertainment | 1,438.7 | 2,884.9 | 2,857.8 | ||||||||||||||
| Corporate and Other(1) | (11,737.3) | (8,062.3) | (10,081.1) | ||||||||||||||
| Total | $ | 5,174.4 | $ | 6,864.1 | $ | 6,340.3 |
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
(1) Corporate and Other consists of investments in subsidiary and intercompany receivables.
Other supplemental information by segments are as follows:
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| (In millions) | June 29, 2025 | June 30, 2024 | June 29, 2025 | June 30, 2024 | ||||||||||||||||||||||
| Depreciation and intangible asset amortization(1) | ||||||||||||||||||||||||||
| Wizards of the Coast and Digital Gaming | $ | 4.3 | $ | 4.3 | $ | 8.9 | $ | 8.6 | ||||||||||||||||||
| Consumer Products | 24.8 | 28.6 | 43.1 | 50.2 | ||||||||||||||||||||||
| Entertainment | 5.2 | 4.2 | 10.3 | 8.3 | ||||||||||||||||||||||
| Corporate and Other | (2.4) | 8.3 | 4.0 | 16.6 | ||||||||||||||||||||||
| Total | $ | 31.9 | $ | 45.4 | $ | 66.3 | $ | 83.7 | ||||||||||||||||||
| Additions to property, plant and equipment | ||||||||||||||||||||||||||
| Wizards of the Coast and Digital Gaming | $ | 5.4 | $ | 9.0 | $ | 7.1 | $ | 15.0 | ||||||||||||||||||
| Consumer Products | 11.0 | 13.2 | 22.2 | 24.5 | ||||||||||||||||||||||
| Entertainment | — | — | 0.1 | — | ||||||||||||||||||||||
| Corporate and Other | (0.3) | 5.2 | 0.5 | 10.0 | ||||||||||||||||||||||
| Total | $ | 16.1 | $ | 27.4 | $ | 29.9 | $ | 49.5 |
(1) The amounts of depreciation disclosed by reportable segments are included within cost of sales, distribution and managed expense. Intangible asset amortization is included within amortization of intangible assets.
Previous: Cover and table of contents · Next: Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations