Latest news with #Goetter
Business Insider
14-05-2025
- Business
- Business Insider
145% vs. 30%: Hasbro exec breaks down how the 'pleasant surprise' of Monday's China deal changed the company's plans
On Sunday, the toy maker Hasbro was preparing big changes to contend with triple-digit tariffs on Chinese imports. By Monday, all of those calculations were different. Gina Goetter, Hasbro's Chief Financial Officer and Chief Operating Officer, said that President Donald Trump' s decision to temporarily lower tariffs on China from 145% to 30% drastically altered the company's plans. She called the announcement a "pleasant surprise" at JP Morgan's Technology, Media, and Communications Conference. "A 30% world is very different from a 145 on how we're treating decisions like pricing, how we're treating allowances, how we're working with our retailers on promotions," Goetter said at the conference on Wednesday. Agility, she said, has been key in making decisions in the current environment. Hasbro, which produces Nerf guns and Play-Doh, had been planning to change the pricing of some products when the 145% tariffs were in place, Goetter said. Now, many of the pricing moves have been paused, though Goetter said some will still go through where it makes sense. "What Monday's announcement allows us for is to go back to those products where we were taking pricing and be very thoughtful," she said. Beyond upping some prices, Hasbro had planned to stop making some products altogether because the new manufacturing math simply didn't work. Goetter said on Wednesday that the company had also been planning to take an unprecedented move and produce some items only for international markets. Plans to reconsider manufacturing are now themselves being reconsidered, Goetter said. Hasbro makes many of its board games in the US, she said, and though the company is "actively exploring" what else it can produce domestically, Monday's announcement changes that calculus as well. Ultimately, Goetter said the math is just quite different, at least for now. Hasbro had previously predicted that 145% tariffs could shave off $180 million from the company's yearly net profits, and Goetter said that the new 30% tax brings that closer number to between $50 and $70 million. Given that the current agreement is temporary and the trade environment remains volatile, Goetter acknowledged that no decision is final.
Business Journals
24-04-2025
- Business
- Business Journals
Hasbro reduces China exposure, boosts profits with Wizards segment
Story Highlights Hasbro plans to reduce Chinese manufacturing while maintaining presence there. Company's Wizards segment drove strong Q1 revenue and profit growth. Hasbro is pushing for zero tariffs on toys and games globally. Amid shifting trade directives from the White House, Hasbro Inc. (Nasdaq: HAS) plans to reduce its Chinese manufacturing footprint but not completely exit the country. "Today, roughly 50% of our U.S. toy and game volume originates from China, and we're accelerating a plan to bring that down meaningfully starting this year," CFO Gina Goetter said on a Thursday morning earnings call. "China will continue to be a major manufacturing hub for us globally, in large part due to specialized capabilities developed over decades." Toys involving electronics are best manufactured in China, CEO Chris Cocks added. On the other hand, Play-Doh, now mostly made in China, could be produced elsewhere, perhaps by boosting production in Turkey. All in all, the Pawtucket-based Hasbro (Nasdaq: HAS) is cutting costs, running scenario models, resisting "analysis paralysis," and making "no regret moves" in the face of policy uncertainty, Geotter told analysts on the Q1 call. Hasbro uses an "asset-light" manufacturing approach. The reliance on third parties gives it flexibility to pull up stakes in one country and move to another, said Cocks. Still, such moves involve costs. Countries new to Hasbro must develop new manufacturing capabilities. Supply chains and logistics must be re-routed. And amid U.S. tariffs, the company is leaning into export markets in Asia and Europe. Hasbro is better positioned than its toy-and-game peers that have greater exposure to China. That means potential "white space" on store shelves this year, providing an opportunity for Hasbro to fill the consumer gap, said Goetter. Hasbro is presuming 145% tariffs on China and 10% reciprocal tariffs on all other countries this year. It's also presuming a single-digit drop in toy spending, akin to consumer toy-buying behavior during the 2008 financial crisis. "It tends to be a category of small luxuries," said Cox. "It tends to be a category that is heavily gift-oriented." Conversations with retailers are underway, with an emphasis on maintaining price points, especially for "fantastic gifts that kids will be asking for, and moms and dads and uncles and aunts will want to give." Meanwhile, "hundreds of SKUs" will be moved from China-based factories to other countries. In tandem, Hasbro is accelerating an effort to cut $1 billion in run-rate costs. "So we're staying focused on what is known," Goetter said regarding strategy. "And right now, what is known is the 145; the ten.... It's good for us to have a more diversified footprint, so we'll just keep moving on that path." Hasbro: White House should zero-out toy tariffs Hasbro's consumer products segment is its least profitable, but accounts for 45% of net revenue. The toy-and-board-game segment lost money in Q1, but beat expectations with better margins and less red ink. Entertainment had a solid quarter with traction expected due to brand partnerships with film studios including Disney, said Cocks. Hasbro's big profit-and-growth center is Wizards of the Coast and Digital Gaming, home to Magic: The Gathering, Dungeons & Dragons, and digital play hits including Monopoly Go! and Baldur's Gate 3. Digital gaming revenues, largely insulated from tariff threats, are benefitting from a growing customer base, said Cocks. Overall, Hasbro landed a strong Q1 as its Wizards segment saw 46% year-to-year growth. Wizards made $230 million in three months with an operating margin of nearly 50%. Across all three segments — consumer products, Wizards, and entertainment — Hasbro increased its revenues by 17% and boosted its operating profit by 47%, thanks largely to the success of Wizards. Hasbro stock rallied following the earnings release with 16% growth by noon. Shares were trading at around $61 and the company showed a market cap of $8.5 billion. Cocks said Hasbro is among a group of companies lobbying the Trump administration to cut toy-and-game tariffs completely. "As such, we fully endorse The Toy Association's advocacy for zero tariffs on toys and games globally, either on U.S. exports or on imports," the CEO said. "We believe there should be free and fair trade on toys, an industry critical not only to thousands of American jobs, but also to the joy and developmental well-being of millions of children, families and fans across the U.S." Executives made no mention of Hasbro's plan to leave Pawtucket and establish a new headquarters location, perhaps in Boston. The company recently said that it will delay any decision on such a move until at least June. Sign up for Providence Business First's free daily newsletters.
NBC News
20-02-2025
- Business
- NBC News
Hasbro says it's taking steps to offset China tariff effects
Toy and gaming giant Hasbro took an optimistic tone Thursday on the potential effect of Chinese tariffs on its business, as executives said the company is shifting manufacturing away from China. Hasbro Chief Financial Officer Gina Goetter said on the company's fourth-quarter earnings call that the toymaker's 2025 guidance — which includes adjusted EBITDA of $1.1 billion to $1.15 billion, compared with $1.06 billion in 2024 — reflects the anticipated effect of U.S. tariffs on China, Mexico and Canada. It also reflects 'mitigating actions we plan to take, including leveraging the strength of our supply chain and potential pricing,' the company said in a news release. Rival toymaker Mattel previously said it could increase the prices of toys such as Hot Wheels and Barbie in response to tariffs. President Donald Trump imposed 10% tariffs on China in early February and is set to add 25% tariffs on Mexico and Canada in March after pausing their initial implementation for 30 days. Hasbro is on track to cut the volume of U.S. toys and games that originate from China from 50% to less than 40% over the next two years, Goetter said. Hasbro does not source from Canada and has 'minimal' imports from Mexico, she said. 'Really, it's a China story for us,' Goetter said. Hasbro CEO Chris Cocks said on the call that even when accounting for tariffs, the toymaker expects 'flattish' performance from the broader industry this year, with trading cards and building blocks leading the way. The company's licensing business, he added, is one of its biggest margin drivers and will not be affected much by tariffs. 'It's relatively [unexposed] to some of the tariff drama that's going on right now,' Cocks said. Hasbro also on Thursday announced a licensing collaboration with Mattel to create Play-Doh versions of Mattel's Barbie dolls. 'Play-Doh Barbie allows children to unlock their inner fashion designer, creating Play-Doh fashions with amazing ruffles, bows and realistic fabric textures, all made with every kid's favorite dough for a never-before-seen creativity experience,' Cocks said. Shares of Hasbro gained roughly 10% in morning trading Thursday. Here's how Hasbro performed in the fourth quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG: Earnings per share: 46 cents adjusted vs. 34 cents expected Revenue: $1.1 billion vs. $1.03 billion expected Fourth-quarter revenue fell 15% from $1.29 billion during the same quarter in 2023. Full-year 2024 revenue came in at $4.14 billion, down 17% from $5 billion in 2023. The company partially attributed the numbers to its divestiture from its eOne film and TV business, which it sold to Lionsgate in December 2023. When excluding the divestiture, the company said, full-year revenue declined 7%. Hasbro's digital and licensed gaming revenue increased 35% to $132 million in the fourth quarter compared to the same period in 2023. For full-year 2024, Hasbro's digital and licensed gaming revenue increased 22% to $471.7 million. Mobile game Monopoly Go! contributed $112 million in 2024 revenue. Hasbro reported a net loss for the fourth quarter of $26.5 million, or a loss of 25 cents per share, compared with a net loss of $1.06 billion, or a loss of $7.64 per share, during the fourth quarter of 2023. Adjusting for costs associated with restructuring and the eOne divestiture, among other one-time items, Hasbro reported fourth-quarter earnings of 46 cents per share, topping Wall Street expectations.
