Entertainment merchandise and content material firm Hasbro, Inc. (NYSE: HAS) shares spiked as excessive as $104.89 on an spectacular Q2 2021 earnings launch however have since cratered over (-10%) on fears of provide chain disruptions. The Company lastly rotated its divisions as all three segments confirmed development within the quarter and even the eOne leisure division improved. The latter is a robust growth driver that ought to gasoline its spectacular portfolio of IPs together with G.I. Joe and the Transformers. The lifting of COVID-19 restrictions accelerated by COVID-19 vaccinations have enabled the division to reengage the manufacturing of live-action movies and streaming content material. Growth has returned to the Company amidst fears of supply chain issues affecting the upcoming vacation season. The Company additionally plans to bolster margins with worth will increase which have gone into impact in Q3 2021 and has handed on delivery prices to consumers because the demand is nonetheless robust sufficient to warrant them. Markets could have overreacted within the close to time period to current prudent traders opportunistic pullback ranges to realize publicity forward of the vacation buying season.
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Q2 FY 2021 Earnings Release
On July 26, 2021, Hasbro launched its second-quarter fiscal 2021 outcomes for the quarter ending June 2021. The Company reported an adjusted earnings-per-share (EPS) revenue of $1.05 excluding non-recurring objects versus consensus analyst estimates for $0.47, a $0.58 beat. Revenues rose 53.7% year-over-year (YoY) to $1.32 billion, beating consensus analyst estimates for $1.17 billion. The Company reported earnings 9% larger than similar quarter 2019. Each of Hasbro’s three segments confirmed development in Q2 2021 with its largest phase Wizard’s of the Coast and Digital Gaming doubling revenues YoY with a 47% working margin revenue.
CEO and CFO Comments
Hasbro CEO Brian Goldner commented, “The global Hasbro team executed a very good quarter, driving strong sell in and demand in the Consumer Products segment; growing both analog and digital revenues in Wizards and our licensed digital gaming business; and positioning us to deliver growth for the full year in the Entertainment segment. We continue to target full-year double-digit revenue growth for Hasbro supported by innovation and quality execution throughout the business. Across Hasbro we are focused on unlocking the full potential value of our brands and capabilities as a play and entertainment leader.”
Hasbro CFO Deborah Thomas added, “Our first quarter started the year well. The team delivered revenue and profit gains, as well as strong cash generation, ending the quarter with $1.43 billion in cash, after retiring $300 million in debt and paying our quarterly dividend.”
Conference Call Takeaways
CEO Goldner set the tone, “This quarter marked the first with our new reporting segment structure, which provides a clearer view of the drivers of Hasbro revenues, profit, margin, and cash generation. As we shared at our investor event in February, our Brand Blueprint succeeds as we create value from our three businesses; Hasbro Consumer Products, including toys and games; Wizards of the Coast and Digital Gaming; and Entertainment. Each has a growth plan that drives that segment, but also drives growth across Hasbro.” He continued, “Throughout last year robust demand drove the high point of sale and revenue growth. In the Consumer Products segment, this surge in gaming demand began around week 12 of last year. If we look at the U.S. this year, heading into that same week our games point of sale was up more than 30%. Once we hit week 12, point of sale slowed. Despite the tough comparison, underlying game demand is healthy and point of sale is more than 30% higher than 2019 pre-COVID levels. We have many new games both this spring and for the holiday and the availability of classic games to continue meeting the high levels of gaming demand. Within Wizards of the Coast and Digital Gaming, MAGIC: THE GATHERING and DUNGEONS & DRAGONS both posted double-digit revenue increases. Fueling this growth is both tabletop and physical play as well as the team’s continued expansion in digital. MAGIC was up against an exceptionally good first-quarter shipment number last year. Based on release strength and timing, we continue to expect the second quarter to be the biggest for MAGIC and Wizards this year.” He concluded, “We are currently in pre-production for the Dungeons & Dragons live-action feature, with a new release date of March 3, 2023 and an amazingly talented cast and crew. During the quarter the team wrapped principal production on two films, All the Old Knives and Arthur the King, and are currently in post-production on both. In scripted TV, Cruel Summer completed filming and premiered last week on Freeform, and we continued deliveries of Season 3 of The Rookie. In unscripted, we have a robust slate of shows in Canada, the U.S., and the UK underway, with more than 40 active productions. We announced yesterday an agreement to sell the eOne music business for $385 million. We continue to focus on the core strategic elements of our Brand Blueprint as a play and entertainment company. While we plan to continue working with the music group including music supervision and music rights exploitation across several brands, music was not the primary driver of our acquisition of eOne. This transaction will allow the team to continue investing to grow and unlock value for its many talented artists and partners.”
HAS Opportunistic Pullback Price Levels
Using the rifle charts on the weekly and day by day time frames gives a precision view of the panorama for HAS inventory. The weekly rifle chart is trying to breakout because the rising 5-period transferring common (MA) at $96.10 help has crossed up by means of its 15-period MA. The weekly stochastic has additionally crossed up once more in a pretzel formation with higher Bollinger Bands (BBs) beginning to broaden at $102.12. Shares spiked on earnings response to peak on the $104.88 Fibonacci (fib) level. The day by day rifle chart is uptrending with rising 5-period MA at $100.98 as shares slip for a possible tightening to 15-period MA at $96.86. The day by day market structure low (MSL) purchase triggered on the bounce by means of $94.39. The day by day stochastic has a mini pup rising by means of the 70-band. Prudent traders can monitor for opportunistic pullback worth ranges on the $98.39 fib, $97.31, $95.61 fib, $94.39 day by day MSL set off, $92.52, $90.39 fib, $88.19 fib, and the $86.63 fib degree. Upside trajectories vary from $108.49 fib as much as the $126.87 degree.