Net revenues - Net revenues for the first six months of 2025 increased 7% to $1,867.9 million from $1,752.6 million for the first six months of 2024 primarily driven by a $216.2 million, or 28%, increase in the Wizards of the Coast and Digital Gaming segment, partially offset by a $96.8 million, or 10%, decrease in the Consumer Products segment and a $4.1 million, or 9%, decrease in the Entertainment segment. See the Segment Results discussion below for further details.
The following table presents net revenues by brand portfolio category:
| | | | | | | | | | | | | | | | | |
| Six Months Ended |
| June 29,
2025 | | June 30,
2024 | | %
Change |
| Grow Brands | $ | 1,385.6 | | | $ | 1,226.0 | | | 13 | % |
| Optimize Brands | 287.6 | | | 306.8 | | | (6) | % |
| Reinvent Brands | 194.7 | | | 219.8 | | | (11) | % |
| Net revenues | $ | 1,867.9 | | | $ | 1,752.6 | | | 7 | % |
GROW BRANDS: Net revenues in the Grow Brands portfolio increased $159.6 million, or 13%, in the first six months of 2025, compared to the first six months of 2024. The net revenue increase primarily reflects higher net revenues from MAGIC: THE GATHERING, and MONOPOLY product sales and digital game licensing related to MONOPOLY GO!, which were partially offset by lower net revenues from PLAY-DOH and GI JOE products.
OPTIMIZE BRANDS: Net revenues in the Optimize Brands portfolio decreased $19.2 million, or 6%, in the first six months of 2025, compared to the first six months of 2024. The net revenue decrease is primarily driven by lower net revenues from PEPPA PIG and STAR WARS products, partially offset by an increase in net revenue from DUEL MASTERS and TRANSFORMERS products. TRANSFORMERS products were driven by increased consumer demand stemming from the September 2024 theatrical release of Transformers One with our partners at Paramount.
REINVENT BRANDS: Net revenues in the Reinvent Brands portfolio decreased $25.1 million, or 11%, in the first six months of 2025 compared to the first six months of 2024. The net revenue decrease is primarily driven by lower net revenues from NERF products, partially offset by an increase in net revenues from BEY BLADE products, following the Company's successful reintroduction of the brand, as well as higher consumer product licensing revenues relating to MY LITTLE PONY.
OPERATING COSTS AND EXPENSES
Cost of sales - Cost of sales for the first six months of 2025 was $429.8 million, or 23.0% of net revenues, compared to $441.9 million, or 25.2% of net revenues, for the first six months of 2024. The Cost of sales decrease was driven primarily by lower sales volumes, supply chain productivity, and cost savings initiatives, offset by a 2024 recording of a non-recurring $26.7 million benefit related to a historical over-accrual of vendor commitment liabilities as discussed in Note 1, Basis of Presentation, to the consolidated financial statements.
Program cost amortization - Program cost amortization decreased to $13.6 million, or 0.7% of net revenues, for the first six months of 2025 from $16.6 million, or 0.9% of net revenues, for the first six months of 2024. Program costs are capitalized as incurred and amortized primarily using the individual-film-forecast method which matches costs to the related recognized revenue and is based upon the current slate of entertainment projects.
Royalties - Royalty expense for the first six months of 2025 increased to $141.5 million, or 7.6% of net revenues, compared to $106.2 million, or 6.1% of net revenues, for the first six months of 2024. Fluctuations in Royalty expense are generally related to the volume of content releases and deliveries and entertainment-driven products sold. The increase in Royalty expense for the first six months of 2025 was directly driven by an increase in sales from MAGIC: THE GATHERING, primarily due to strong demand for Final Fantasy, for which the Company is obligated to pay a royalty.
Product development - Product development expense for the first six months of 2025 was $158.0 million, or 8.5% of net revenues, compared to $135.9 million, or 7.8% of net revenues, for the first six months of 2024. The increase in Product development expense during the first six months of 2025 was primarily due to higher incremental investment in the development of Grow Brands under the Company's "Playing to Win" strategy.
Advertising - Advertising expense for the first six months of 2025 was $119.0 million, or 6.4% of net revenues, compared to $111.9 million, or 6.4% of net revenues, for the first six months of 2024. The Advertising expense increase during the first six months of 2025 was primarily driven by the timing of sales initiatives in the Consumer Products segment.
Amortization of intangibles - Amortization of intangible assets remained flat at $34.2 million, or 1.8% of net revenues, for the first six months of 2025, as compared to $34.1 million, or 1.9% of net revenues, for the first six months of 2024. The amortization expense was driven by the straight-line amortization of the Company's remaining definite-lived intangible assets.
Impairment of goodwill - During the first six months of 2025, the Company recorded a $1,021.9 million non-cash goodwill impairment charge associated with goodwill assigned to reporting units within the Company's Consumer Products segment. There were no goodwill impairment charges during the first six months of 2024. See further detail in Note 5, Goodwill, to the consolidated financial statements for further information.
Loss on disposal of business - Loss on disposal of business for the first six months of 2025 was $25.0 million, or 1.3% of net revenues, as compared to $24.4 million, or 1.4% of net revenues, for the first six months of 2024. The Loss on disposal of business relates to the divestiture of the eOne Film and TV business. See further detail in Note 3, Sale of Non-Core Entertainment One Film and TV Business, to the consolidated financial statements for further information.
Selling, distribution and administration - Selling, distribution and administration expenses decreased to $552.4 million, or 29.6% of net revenues for the first six months of 2025, from $553.3 million, or 31.6% of net revenues, for the first six months of 2024. The decrease in Selling, distribution and administration expenses during the first six months of 2025 primarily due to cost savings initiatives, a non-recurring $31.1 million expense related to historical environmental liabilities during the second quarter of 2024, partially offset by a non-recurring stock-compensation adjustment of $18.1 million recorded during the first quarter of 2024, as discussed in Note 1, Basis of Presentation, to the consolidated financial statements.
Operating Profit (Loss) - The operating loss for the first six months of 2025 was $627.5 million, or 33.6% of net revenues, compared to an operating profit of $328.3 million, or 18.7% of net revenues, for the first six months of 2024 driven by the factors discussed above.
NON-OPERATING EXPENSE (INCOME)
Interest expense - Interest expense for the first six months of 2025 totaled $82.2 million compared to $81.5 million in the first six months of 2024. The slight increase in Interest expense primarily reflects a higher average interest rate on the outstanding borrowings existing partially offset by lower average borrowings as of the end of the second quarter of 2025 as compared to those outstanding as of the second quarter of 2024.
Interest income - Interest income was $14.3 million for the first six months of 2025, compared to $21.3 million in the first six months of 2024. Lower Interest income in 2025 primarily reflects the Company's investments in treasury bills that were higher in 2024 as compared to 2025.
Other (income) expense, net - Other (income) expense, net was net income of $17.3 million for the first six months of 2025, compared to net expense of $4.2 million in the first six months of 2024. The change in Other (income) expense, net during 2025 was driven primarily by an increase in foreign currency exchange gains the first six months of 2025 as compared to foreign currency exchange losses for the first six months of 2024.
INCOME TAXES
Income tax expense totaled $77.1 million on a pre-tax loss of $678.1 million in the first six months of 2025 compared to an income tax expense of $66.3 million on pre-tax income of $263.9 million in the first six months of 2024. Both periods were impacted by discrete tax events. During the first six months of 2025, the Company recorded a non-cash goodwill impairment within the Consumer Products segment of $1,021.9 million with no corresponding tax benefit.
During the first six months of 2024, the Company recorded a $24.4 million unfavorable adjustment to the 2023 Loss on disposal of the eOne Film and TV business with no corresponding tax benefit. During the first six months of 2025, exclusive of the impairment of goodwill, the Company recorded a net discrete tax benefit of $6.2 million compared to a net discrete tax expense, exclusive of the Loss on disposal of the eOne Film and TV business, of $0.7 million in the first six months of 2024.
The net discrete tax benefit recorded in the first six months of 2025 is primarily associated with the release of a valuation allowance. The net discrete tax expense recorded in the first six months of 2024 is primarily associated with stock-based compensation.
Absent discrete items, the tax rates for the first six months of 2025 and 2024 were 22.6% and 22.7%, respectively. The decrease in the base rate to 22.6% for the first six months of 2025 relative to the first six months of 2024 is primarily due to the mix of jurisdictions where the Company earned its profits.
SEGMENT RESULTS
The following table presents net external revenues and operating profit (loss) for the Company's reportable segments for the six months ended June 29, 2025 and June 30, 2024:
| | | | | | | | | | | | | | | | | |
| Six Months Ended |
| June 29,
2025 | | June 30,
2024 | | %
Change |
| Net revenues: | | | | | |
| Wizards of the Coast and Digital Gaming | $ | 984.5 | | | $ | 768.3 | | | 28 | % |
| Consumer Products | 840.7 | | | 937.5 | | | (10) | % |
| Entertainment | 42.7 | | | 46.8 | | | (9) | % |
| Total net revenues | $ | 1,867.9 | | | $ | 1,752.6 | | | 7 | % |
| | | | | |
| Operating profit (loss): | | | | | |
| Wizards of the Coast and Digital Gaming | $ | 471.8 | | | $ | 369.9 | | | 28 | % |
| Consumer Products | (1,073.5) | | | (56.2) | | | 1,810 | % |
| Entertainment | (4.9) | | | 4.8 | | | (202) | % |
| Corporate and Other | (20.9) | | | 9.8 | | | (313) | % |
| Total Operating profit (loss) | $ | (627.5) | | | $ | 328.3 | | | (291) | % |
Wizards of the Coast and Digital Gaming Segment
The following table presents Wizards of the Coast and Digital Gaming segment net revenues by category for the six months ended June 29, 2025 and June 30, 2024:
| | | | | | | | | | | | | | | | | |
| Six Months Ended |
| June 29,
2025 | | June 30,
2024 | | %
Change |
| Tabletop Gaming | $ | 750.1 | | | $ | 535.8 | | | 40 | % |
| Digital and Licensed Gaming | 234.4 | | | 232.5 | | | 1 | % |
| Net revenues | $ | 984.5 | | | $ | 768.3 | | | 28 | % |
Wizards of the Coast and Digital Gaming segment net revenues increased 28% in the first six months of 2025 to $984.5 million from $768.3 million in the first six months of 2024. Tabletop Gaming revenue increased 40% behind growth in MAGIC: THE GATHERING primarily due to strong demand for Final Fantasy, Tarkir, Dragon Storm and Aetherdrift. The net revenue increase in Digital and Licensed Gaming during the first six months of 2025 was primarily attributable to revenue contributions from higher digital licensing of MONOPOLY GO!.
Wizards of the Coast and Digital Gaming segment operating profit was $471.8 million, or 47.9% of segment net revenues for the first six months of 2025, compared to operating profit of $369.9 million, or 48.1% of segment net revenues, for the first six months of 2024. The operating profit increase during the first six months of 2025 was driven by increased net revenues, contributions from higher digital licensing revenue mix and cost savings initiatives, offset by higher royalty expense related to the strong demand for Final Fantasy for which the Company is obligated to pay a royalty.
Consumer Products Segment
The following table presents the Consumer Products segment net revenues by major geographic region for the six months ended June 29, 2025 and June 30, 2024:
| | | | | | | | | | | | | | | | | |
| Six Months Ended |
| June 29,
2025 | | June 30,
2024 | | %
Change |
| North America | $ | 467.4 | | | $ | 545.2 | | | (14) | % |
| Europe | 180.7 | | | 179.5 | | | 1 | % |
| Asia Pacific | 117.4 | | | 111.4 | | | 5 | % |
| Latin America | 75.2 | | | 101.4 | | | (26) | % |
| Net revenues | $ | 840.7 | | | $ | 937.5 | | | (10) | % |
The Consumer Products segment net revenues decreased 10% to $840.7 million for the first six months of 2025 compared to $937.5 million for the first six months of 2024 primarily driven by broader industry trends and shifts in product mix. The net revenue decrease primarily reflects lower net revenues from NERF, PLAY-DOH, Hasbro Gaming, GI JOE and STAR WARS products. These declines in revenue were partially offset by revenue growth from BEY BLADE and TRANSFORMERS products, as well as an increase in consumer product licensing revenue from MY LITTLE PONY.
Consumer Products segment operating loss for the first six months of 2025 was $1,073.5 million, or 127.7% of segment net revenues, compared to a segment operating loss of $56.2 million, or 6.0% of segment net revenues, for the first six months of 2024. The increase in operating loss in the first six months of 2025 was driven by decrease in net revenues and a non-cash goodwill impairment charge of $1,021.9 million recorded during 2025. This was offset by savings realized from the Company's cost savings and transformation initiatives.
Entertainment Segment
The following table presents Entertainment segment net revenues by category for the six months ended June 29, 2025 and June 30, 2024:
| | | | | | | | | | | | | | | | | |
| Six Months Ended |
| June 29,
2025 | | June 30,
2024 | | %
Change |
| Film and TV | $ | 5.8 | | | $ | 1.8 | | | 222 | % |
| Family Brands | 36.9 | | | 45.0 | | | (18) | % |
| Net revenues | $ | 42.7 | | | $ | 46.8 | | | (9) | % |
Entertainment segment net revenues decreased 9% to $42.7 million for the first six months of 2025, compared to $46.8 million for the first six months of 2024. The net revenue decrease in the Entertainment segment during the first six months of 2025 was driven primarily by timing of entertainment streaming renewals.
Entertainment segment operating loss was $4.9 million, or 11% of segment net revenues, for the first six months of 2025, compared to an operating profit of $4.8 million, or 10% of segment net revenues, for the first six months of 2024. The decrease in Entertainment segment operating results during the first six months of 2025 was primarily driven by a decrease in net revenues, along with a non-recurring Loss on disposal of business of $25.0 million during the first six months of 2025, that was offset by a non-recurring Loss on disposal of business of $24.4 million during the first six months of 2024. Refer to Note 3, Sale of Non-Core Entertainment One Film and TV Business, to the consolidated financial statements for further information on the non-recurring Loss on disposal of business.
Corporate and Other
Corporate and Other operating loss was $20.9 million for the first six months of 2025 compared to an operating profit of $9.8 million for the first six months of 2024. The operating loss in the first six months of 2025 as compared to the operating income in the first six months of 2024 was due to the net impact of the two prior period non-recurring adjustments recorded during the second quarter of 2024 partially offset by a benefit from a non-recurring adjustment for stock compensation expense reversal recorded in the first quarter of 2024. Refer to Note 1, Basis of Presentation, to the consolidated financial statements for further information on these non-recurring adjustments.
OTHER INFORMATION
Commitments and Contingencies
Refer to Item 7 of our 2024 Annual Report for additional information regarding the Company’s cash obligations and commitments as of the end of fiscal year 2024. Additionally, refer to Note 14, Commitments and Contingencies, to the consolidated financial statements for a discussion of the Company’s commitments and contingencies. Contractual obligations and commercial commitments, as detailed in the Company's 2024 Form 10-K, did not materially change outside of certain payments made in the normal course of business and as otherwise set forth in this report.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically generated a significant amount of cash from operations. The Company primarily funds its operations and liquidity needs through cash on hand and from cash flows from operations, and when needed, borrowings under its commercial paper program and available lines of credit.
The Company believes that the funds available to it, including cash expected to be generated from operations, funds available through its commercial paper program or its available lines of credit, are adequate to meet its working capital needs for the next twelve months. The Company may also issue debt or equity securities from time to time to provide additional sources of liquidity when pursuing opportunities to enhance our long-term competitive position, while maintaining a strong balance sheet.
The impact of tariffs on the Company's business operations was not significant during the first six months of 2025 and throughout 2024; however significant changes in trade policy announced by the U.S. government during the second quarter of 2025 could adversely impact our forward-looking financial results, including the timing and extent of cash flows based upon timing in customer buying patterns and changes in our supply chain sourcing strategies.
As of June 29, 2025, the Company's cash and cash equivalents totaled $546.9 million. The majority of the Company’s cash and cash equivalents held outside of the United States as of June 29, 2025 are denominated in the U.S. dollar.
Under the Company’s commercial paper program, at the request of the Company and subject to market conditions, the Company may issue notes from time to time up to an aggregate principal amount outstanding at any given time of $1.0 billion. The Company intends to use the commercial paper program as its primary short-term borrowing facility. As of June 29, 2025, the Company had no outstanding borrowings related to the commercial paper program.
The Company’s revolving credit facility with Bank of America, provides the Company with commitments having a maximum aggregate principal amount of $1.25 billion. The revolving credit facility also provides for a potential additional incremental commitment increase of up to $500.0 million subject to agreement of the lenders. The Company's revolving credit facility contains certain financial covenants setting forth leverage and coverage requirements, and certain other limitations typical of an investment grade facility, including with respect to liens, mergers and incurrence of indebtedness. The Company was in compliance with all covenants as of June 29, 2025. The Company had no borrowings outstanding under its revolving credit facility as of June 29, 2025. However, letters of credit outstanding under this facility as of June 29, 2025 were approximately $3.7 million. Amounts available and unused under the revolving credit facility at June 29, 2025 were approximately $1.25 billion, inclusive of borrowings under the Company’s commercial paper program. The Company also has other uncommitted lines from various banks, of which approximately $8.4 million was utilized as of June 29, 2025. Of the amount utilized under, or supported by, the uncommitted lines, the full $8.4 million represented letters of credit.
As of June 29, 2025, the Company had $3,320.9 million of Long-term debt due at varying times from 2026 through 2044. From time to time, the Company or its affiliates may seek to retire or purchase outstanding debt through cash purchases, in open-market purchases, privately negotiated transactions or otherwise. Such repurchases, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. During 2025, the Company repurchased $61.9 million of its outstanding debt.
The Company has a supplier finance program which provides participating suppliers the option of receiving payment in advance of an invoice due date, to be paid by certain administering banks, on the basis of invoices that the Company has confirmed as valid and approved. The Company’s obligation is to make payment in the invoice amount negotiated with participating suppliers, to the administering banks on the invoice due date. The Company’s suppliers are not required to participate in the supplier finance program. The early payment transactions between the Company’s supplier and the administering bank are subject to an agreement between those parties, and the
Company does not participate in any financial aspect of the agreements between the Company’s suppliers and the administering banks. The Company has not pledged any assets to the administering bank under the supplier financing program. The Company or the administering bank may terminate the agreement upon at least 30 days’ written notice.
In June 2025, the Company entered into a money market line of credit agreement (the “Money Market Credit Facility”) to provide the Company with access to uncommitted, 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. As of June 29, 2025, the Company did not have any outstanding credit under the Money Market Credit Facility. See note 8, Long-Term Debt and Other Financing, to the consolidated financial statements for further information.
The amount of obligations confirmed under the supplier finance 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 the Company's Consolidated Balance Sheets. The activity related to this program is reflected within the operating activities section of the Consolidated Statements of Cash Flows.
Cash Flow
The following table summarizes the changes in the Consolidated Statement of Cash Flows:
| | | | | | | | | | | |
| Six Months Ended |
| June 29,
2025 | | June 30,
2024 |
| Net cash provided by (utilized for): | | | |
| Operating activities | $ | 209.4 | | | $ | 365.1 | |
| Investing activities | (89.2) | | | (575.4) | |
| Financing activities | (274.6) | | | 288.5 | |
Net cash provided by Operating activities in the first six months of 2025 was $209.4 million compared to $365.1 million in the first six months of 2024. The $155.7 million decrease in net cash provided by Operating activities after adjusting for non-cash items, was primarily attributable to changes in net working capital including the timing of inventory and payment of the net deemed repatriation tax, in the first six months of 2025 compared to first six months of 2024.
Net cash utilized for Investing activities was $89.2 million in the first six months of 2025 compared to net cash utilized for Investing activities of $575.4 million in the first six months of 2024. Additions to property, plant and equipment and software were $29.9 million and $61.8 million, respectively, in the first six months of 2025 compared to $49.5 million and $48.2 million, respectively, in the first six months of 2024. Additionally, a purchase of Long-term Investments of $10.0 million occurred in the first six months of 2025 with compared to the purchase of Short-term Investments of $480.1 million in the first six months of 2024.
Net cash utilized by Financing activities was $274.6 million in the first six months of 2025 compared to net cash utilized of $288.5 million in the first six months of 2024. Financing activities in the first six months of 2025 primarily include dividends paid of $196.0 million, repayments of long-term debt of $60.5 million, and $19.9 million of payments related to tax withholdings for stock compensation coinciding with equity award vesting activity. Financing activities in the first six months of 2024 include $500.0 million of proceeds from issuance of the 2034 Notes, $194.6 million of dividends paid and $11.9 million of payments related to tax withholdings for stock compensation coinciding with equity award vesting activity.
CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT ESTIMATES
We have prepared the Consolidated Financial Statements in accordance with accounting principles generally accepted in the United States, which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and revenues and expenses during the periods reported. These estimates are based on our best judgment about current and future conditions, but actual results could differ from those estimates. Information with respect to accounting estimates that are the most critical to the understanding of our financial statements as they could have the most significant effect on our reported results and require subjective or complex judgments by management is contained in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K for the fiscal year ended December 29, 2024. We believe that at June 29, 2025, there has been no material change to this information except as noted below.
Recoverability of Goodwill and Intangible Assets
The quantitative test of goodwill for impairment requires us to estimate the fair value of our reporting units. We test goodwill at the reporting unit level, which we define as one level below the operating segment. Our reporting units are aligned with our product lines that are separately managed and reviewed. During the second quarter of 2025, we performed a quantitative impairment test for certain of our reporting units within the Consumer Products and Entertainment segments. The reporting units within the Consumer Products segment subject to the quantitative test included North America, Europe, Asia Pacific, and Latin America as well as the Family Brands reporting unit within the Entertainment segment. We have concluded that 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 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, including similar sourcing and distribution methods and they have similar economic characteristics.
We determined that the carrying values of our regional consumer products reporting units, and when aggregated during the second quarter of 2025 based upon similar economic characteristics, exceeded their respective fair values and recorded aggregate pre-tax non-cash impairment charges of $1,021.9 million. Specifically, the fair values of North America and Europe reporting units 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 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.
The fair value of our Family Brands reporting unit, within the Entertainment segment, exceeded the carrying value of that reporting unit by approximately 15%. $325.2 million of goodwill is allocated to the Family Brands reporting unit. The fair value of the Family Brands reporting unit was determined considering a discounted cash flow model weighted equally with the market approach which is primarily based on multiples of comparable public companies. Management closely monitors the operating results of all reporting units in addition to macroeconomic conditions and trade policy developments. Further volatility of trade, geopolitical tensions, or negative global economic developments could cause significant further decreases in the operating results of our reporting units, which may result in a recognition of a goodwill impairment that could be material to the Consolidated Financial Statements in future periods.
Critical assumptions used in the determination of the reporting units’ fair value included management’s estimated future revenue growth rates, estimated future margins, and discount rate. Estimated future revenue growth and margins are based on management’s best estimate about current and future conditions. During the second quarter of 2025, the regional consumer products reporting units included discount rates ranging from 10.5% to 14.0% and a terminal value revenue growth rate of 3.0%. Additionally, the forecasted growth in operating profit margins towards the terminal value operating profit is aligned with industry averages. For the Family Brands reporting unit, critical assumptions included a discount rate approximating 9.5%, a terminal value revenue growth rate of 3.0%, and a terminal operating profit margin consistent with levels achieved in recent historical periods when excluding one-time impairment and disposal charges. Although we believe the assumptions and estimates made were reasonable and appropriate, these estimates are based on a number of factors including historical experience and information obtained from reporting unit management. Actual results could differ from these estimates, especially given uncertainty related to tariffs, global trade policy, and global macroeconomic conditions. We determined the discount rate using our weighted average cost of capital adjusted for risk factors specific to the reporting unit, with comparison to market and industry data.
We proceeded to perform sensitivities in our impairment testing of the Family Brands reporting unit by (i) increasing the discount rate 250 basis points, (ii) decreasing the expected long-term growth rate 750 basis points, (iii) decreasing the annual revenue projections 400 basis points, and (iv) decreasing projected gross margins 1,000 basis points. None of these sensitivities individually would have resulted in a conclusion that the goodwill in our Family Brands reporting unit were impaired.
More information regarding goodwill is contained in Note 5, Goodwill, in the consolidated financial statements.
FINANCIAL RISK MANAGEMENT
The Company is exposed to market risks attributable to fluctuations in foreign currency exchange rates primarily as the result of sourcing products priced in U.S. dollars, Hong Kong dollars and Euros while marketing and selling those products in more than twenty currencies. Results of operations may be affected primarily by changes in the value of the U.S. dollar, Euro, British pound sterling, Canadian dollar, Japanese Yen, Brazilian real and Mexican peso and, to a lesser extent, other currencies in Latin America and Asia Pacific countries.
To manage this exposure, the Company has hedged a portion of its forecasted foreign currency transactions using foreign exchange forward contracts and foreign exchange option contracts. The Company is also exposed to foreign currency risk with respect to its net cash and cash equivalents or short-term borrowing positions in currencies other than the U.S. dollar. The Company believes, however, that the on-going risk on the net exposure should not be material to its financial condition. In addition, the Company's revenues and costs have been, and will likely continue to be, affected by changes in foreign currency rates. A significant change in foreign exchange rates can materially impact the Company's revenues and earnings due to translation of foreign-denominated revenues and expenses. The Company does not hedge against translation impacts of foreign exchange. From time to time, affiliates of the Company may make or receive intercompany loans in currencies other than their functional currency. The Company manages this exposure at the time the loan is made by using foreign exchange contracts.
The Company reflects derivatives at their fair value as an asset or liability on the Consolidated Balance Sheets. The Company does not speculate in foreign currency exchange contracts. See Note 12, Derivative Financial Instruments, to the Company’s consolidated financial statements for further details on the Company's derivatives.
As of June 29, 2025, the Company had fixed-rate debt of $3.3 billion. The Company may from time to time assess interest rate swaps related to its outstanding debt. The Company did not have any outstanding swaps as of June 29, 2025, June 30, 2024, or December 29, 2024.
INFLATION
The Company monitors the impact of inflation to its business operations on an ongoing basis and may need to implement actions such as price adjustments to mitigate the impact of changes to the rate of inflation in future periods. However, future volatility of general price inflation could affect consumer purchases of our products and spending on entertainment. Additionally, the impact of inflation on costs and availability of materials, costs for shipping and warehousing and other operational overhead, could adversely affect the Company's financial results.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The information required by this item is included in Part I, Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations" and is incorporated herein by reference.
Item 4. Controls and Procedures.
Evaluation of disclosure controls and procedures
The Company maintains disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. The Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures as of June 29, 2025. Based on the evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective.
Changes in internal control over financial reporting
There were no changes in the Company's internal control over financial reporting, as defined in Rule 13a-15(f) promulgated under the Exchange Act, during the quarter ended June 29, 2025 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
On November 13, 2024, West Palm Beach Firefighters’ Pension Fund filed a putative class action lawsuit in the U.S. District Court for the Southern District of New York alleging violations of Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934 and certain rules promulgated thereunder. West Palm Beach Firefighters’ Pension Fund v. Hasbro, Inc., Richard Stoddart, Christian Cocks, Deborah Thomas, Gina Goetter and Eric Nyman, Case No.1:24-cv-8633 (S.D.N.Y.). The plaintiff asserts claims on behalf of persons and entities that purchased the Company’s securities between February 7, 2022 and October 25, 2023 (the “Class Period”), and seeks compensatory damages, interest, fees, and costs. The complaint alleges that members of the putative class suffered losses as a result of false or misleading statements and withholding of information regarding the Company’s inventory, including quality and appropriateness thereof, during the Class Period. The court is in the process of appointing a lead plaintiff. The Company intends to vigorously defend against these claims. Due to the early stages of this matter, the Company is unable to estimate a reasonably possible range of loss, if any, that may result from this matter.
On February 5, 2025, Dale Lee, derivatively on behalf of Hasbro, Inc., filed a putative shareholder derivative action against current and former members of the Board of Directors of the Company in the U.S. District Court for the Southern District of New York. Lee v. Cocks, et al., Case No. 1:25-cv-01018 (S.D.N.Y.). The allegations in this complaint are nearly identical to those of the West Palm Beach Firefighters' Pension Fund action. Plaintiff alleges, nominally on behalf of the Company, that the named defendants breached the Hasbro Code of Conduct and Audit Committee Charter as well as their individual fiduciary duties by making false or misleading statements, approving the making of false or misleading statements, and/or withholding information regarding the Company's inventory during the same time period as the Class Period. The action alleges violations of Section 14(a) of the Exchange Act and Rule 14a-9 with respect to the 2022 Proxy Statement, Section 10(b), 15 U.S.C. sec. 78(j) and Rule 10b-5. Plaintiff voluntarily dismissed the action.
On February 21, 2025, Patrick Ayers, derivatively on behalf of Hasbro, Inc., filed a putative shareholder derivative action against certain of the Company’s executive officers and current and former members of the Board of Directors of the Company in the U.S. District Court for the Southern District of New York, et al., Case No. 1:25-cv-1504 (S.D.N.Y.). The allegations in this complaint are substantially the same as those in the Lee action described above. Plaintiff voluntarily dismissed the action.
The Company is currently party to other certain legal proceedings, none of which we believe to be material to our business or financial condition.
Item 1A. Risk Factors.
In connection with information set forth in this Quarterly Report on Form 10-Q, the risk factors discussed under Item 1A. Risk Factors, in Part I of our 2024 Form 10-K and in our subsequent filings, including in this filing, should be considered. The risks set forth in our 2024 Form 10-K and in our subsequent filings, including in this filing, could materially and adversely affect our business, financial condition, and results of operations. There are no material changes from the risk factors as previously disclosed in our 2024 Form 10-K, in any of our subsequently filed reports or as otherwise set forth in this Quarterly Report.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
In May 2018, the Company announced that its Board of Directors authorized the repurchase of an additional $500 million of common stock, its most recent share repurchase authorization. Purchases of the Company's common stock may be made from time to time, subject to market conditions. These shares may be repurchased in the open market or through privately negotiated transactions. The Company has no obligation to repurchase shares under this authorization and there is no expiration date for this repurchase authorization. The timing, actual number, and value of shares that are repurchased will depend on a number of factors, including the price of the Company's stock and the Company’s generation of, and uses for, cash.
There were no repurchases of the Company’s Common Stock during the six months ended June 29, 2025. At June 29, 2025, Hasbro had $241.6 million remaining available under its share repurchase authorization.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
During the six months ended June 29, 2025, none of our officers or directors or a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) and (c) of Regulation S-K.
Item 6. Exhibits
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| 3.3 | | |
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| 3.6 | | |
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| 4.9 | | |
| 10.1** | |
| 31.1* | |
| 31.2* | |
| 32.1* | |
| 32.2* | |
| 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL Document. |
| 101.SCH | XBRL Taxonomy Extension Schema Document |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.LAB | XBRL Taxonomy Extension Labels Linkbase Document |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
* Furnished herewith
** Indicates management contract or compensatory plan, contract or arrangement
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| | | | | |
| HASBRO, INC. |
| (Registrant) |
|
| Date: July 31, 2025 | By: /s/ Gina Goetter |
| | Gina Goetter |
| Chief Financial Officer and Chief Operating Officer
(Duly Authorized Officer and
Principal Financial and Principal Accounting Officer) |
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