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Segment Reporting | 6 Months Ended
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Jul. 02, 2023
Segment Reporting [Abstract] |
Segment Reporting | Segment Reporting Hasbro is a toy and game company with a broad portfolio of brands and entertainment content spanning toys, games, licensed products ranging from traditional to digital, as well as film and television entertainment. The Company's three principal reportable segments are (i) Consumer Products, (ii) Wizards of the Coast and Digital Gaming, and (iii) Entertainment. 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. 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. The Entertainment segment engages in the development, acquisition, production, distribution and sale of world-class entertainment content including film, scripted and unscripted television, family programming, digital content and live entertainment. Corporate and Other 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. The significant accounting policies of the Company's segments are the same as those referenced in note 1. Results shown for the quarter ended July 2, 2023 are not necessarily representative of those which may be expected for the full year 2023, nor were those of the comparable 2022 periods representative of those actually experienced for the full year 2022. Similarly, such results are not necessarily those which would be achieved were each segment an unaffiliated business enterprise. Information by segment and a reconciliation to reported amounts for the quarters and six months ended July 2, 2023 and June 26, 2022 are as follows:
| Quarter Ended
| July 2, 2023 |  | June 26, 2022
Net revenues | External |  | Affiliate (b) |  | External |  | Affiliate (b)
Consumer Products | $ | 655.2 |  |  | $ | 80.8 |  |  | $ | 734.2 |  |  | $ | 145.2 |
Wizards of the Coast and Digital Gaming | 375.6 |  |  | 45.2 |  |  | 419.8 |  |  | 52.9 |
Entertainment | 179.2 |  |  | 11.4 |  |  | 185.2 |  |  | 12.8 |
Corporate and Other | — |  |  | (137.4) |  |  | — |  |  | (210.9) |
| $ | 1,210.0 |  |  | $ | — |  |  | $ | 1,339.2 |  |  | $ | — |
| Six Months Ended
| July 2, 2023 |  | June 26, 2022
Net revenues | External |  | Affiliate (b) |  | External |  | Affiliate (b)
Consumer Products | $ | 1,175.6 |  |  | $ | 154.0 |  |  | $ | 1,407.0 |  |  | $ | 237.1 |
Wizards of the Coast and Digital Gaming | 670.8 |  |  | 93.0 |  |  | 682.6 |  |  | 82.6 |
Entertainment | 364.6 |  |  | 24.6 |  |  | 412.7 |  |  | 26.7 |
Corporate and Other | — |  |  | (271.6) |  |  | — |  |  | (346.4) |
| $ | 2,211.0 |  |  | $ | — |  |  | $ | 2,502.3 |  |  | $ | — |
| Quarter Ended |  | Six Months Ended
Operating profit (loss) | July 2, 2023 |  | June 26, 2022 |  | July 2, 2023 |  | June 26, 2022
Consumer Products | $ | 11.4 |  |  | $ | (6.5) |  |  | $ | (34.6) |  |  | $ | 2.1 |
Wizards of the Coast and Digital Gaming | 142.3 |  |  | 225.6 |  |  | 219.1 |  |  | 332.0 |
Entertainment (a) | (324.2) |  |  | 14.3 |  |  | (332.9) |  |  | 26.5 |
Corporate and Other (a)(c) | (18.1) |  |  | (14.3) |  |  | (22.3) |  |  | (21.5) |
Operating profit (loss) | (188.6) |  |  | 219.1 |  |  | (170.7) |  |  | 339.1 |
Interest expense | 46.6 |  |  | 41.7 |  |  | 92.9 |  |  | 83.3 |
Interest income | (5.8) |  |  | (2.7) |  |  | (11.8) |  |  | (4.8) |
Other non-operating (income) expense | (1.5) |  |  | 0.2 |  |  | (2.9) |  |  | 0.5 |
Earnings (loss) before income taxes | $ | (227.9) |  |  | $ | 179.9 |  |  | $ | (248.9) |  |  | $ | 260.1 |
Total assets | July 2, 2023 |  | June 26, 2022 |  | December 25, 2022
Consumer Products | $ | 5,954.2 |  |  | $ | 5,318.9 |  |  | $ | 5,757.7 |
Wizards of the Coast and Digital Gaming | 3,634.9 |  |  | 2,295.8 |  |  | 2,968.7 |
Entertainment (a) | 5,924.1 |  |  | 6,286.7 |  |  | 6,273.3 |
Corporate and Other (a) | (6,903.5) |  |  | (4,398.4) |  |  | (5,703.8) |
| $ | 8,609.7 |  |  | $ | 9,503.0 |  |  | $ | 9,295.9 |
(a) Certain long-term assets, including property, plant and equipment, goodwill and other intangibles, which benefit multiple operating segments, are included in both Entertainment and Corporate and Other. Allocations of certain Corporate and Other expenses, related to these assets are made to the individual operating segments at the beginning of the year based on budgeted amounts. Any differences between actual and budgeted amounts are reflected in Corporate and Other because allocations are translated from the U.S. Dollar to local currency at budgeted rates when recorded. Corporate and Other also includes the elimination of inter-company balance sheet amounts. (b) Amounts represent revenues from transactions with other operating segments that are included in the operating profit (loss) of the segment. (c) Corporate and Other Operating profit (loss) includes Operational Excellence related transformation office and consulting fees of $10.4 million and $21.0 million, for the quarter and six-month periods ended July 2, 2023, respectively, which are recorded within Selling, Distribution and Administration costs within the Consolidated Statements of Operations. Third party consultants were engaged to assist the Company in performing a comprehensive review of operations and developing a transformation plan designed to support the organization in identifying, realizing, and capturing savings through the identification of organizational initiatives intended to create efficiencies and improve business processes and operations. The consultants assisted in providing benchmark data and are currently assisting with the design of an improved operating model and supply chain function. The Company expects this consulting assistance to conclude in 2023 in line with the planning stages of the final components of the transformation plan. Corporate and Other Operating Profit (loss) includes other consulting expense of $19.1 million and $21.5 million for the quarter and six month periods ended June 26, 2022, respectively, as well as incentive compensation for all periods presented. The following table represents consolidated Consumer Products segment net revenues by major geographic region for the quarters and six months ended July 2, 2023 and June 26, 2022:
| Quarter Ended |  | Six Months Ended
| July 2, 2023 |  | June 26, 2022 |  | July 2, 2023 |  | June 26, 2022
North America | $ | 382.0 |  |  | $ | 433.3 |  |  | $ | 661.1 |  |  | $ | 838.5 |
Europe | 131.9 |  |  | 162.1 |  |  | 263.5 |  |  | 338.8 |
Asia Pacific | 66.4 |  |  | 66.6 |  |  | 129.7 |  |  | 118.8 |
Latin America | 74.9 |  |  | 72.2 |  |  | 121.3 |  |  | 110.9 |
Net revenues | $ | 655.2 |  |  | $ | 734.2 |  |  | $ | 1,175.6 |  |  | $ | 1,407.0 |
The following table represents consolidated Wizards of the Coast and Digital Gaming segment net revenues by category for the quarters and six months ended July 2, 2023 and June 26, 2022:
| Quarter Ended |  | Six Months Ended
| July 2, 2023 |  | June 26, 2022 |  | July 2, 2023 |  | June 26, 2022
Tabletop Gaming | $ | 298.5 |  |  | $ | 361.8 |  |  | $ | 516.4 |  |  | $ | 554.0 |
Digital and Licensed Gaming | 77.1 |  |  | 58.0 |  |  | 154.4 |  |  | 128.6 |
Net revenues | $ | 375.6 |  |  | $ | 419.8 |  |  | $ | 670.8 |  |  | $ | 682.6 |
The following table represents consolidated Entertainment segment net revenues by category for the quarters and six months ended July 2, 2023 and June 26, 2022:
| Quarter Ended |  | Six Months Ended
| July 2, 2023 |  | June 26, 2022 |  | July 2, 2023 |  | June 26, 2022
Film and TV | $ | 153.3 |  |  | $ | 148.2 |  |  | $ | 321.7 |  |  | $ | 338.4 |
Family Brands | 25.9 |  |  | 22.8 |  |  | 42.9 |  |  | 46.0 |
Music and Other | — |  |  | 14.2 |  |  | — |  |  | 28.3 |
Net revenues | $ | 179.2 |  |  | $ | 185.2 |  |  | $ | 364.6 |  |  | $ | 412.7 |
Effective for the first quarter of 2023, the Company realigned its brand portfolios to correspond with the Blueprint 2.0 strategy. Net Revenues by Brand Portfolio below have been restated to present net revenues and operating profit under the realigned structure. See note 1 for more information on the Company's brand portfolio realignment. The following table presents consolidated net revenues by brand portfolio for the quarters and six months ended July 2, 2023 and June 26, 2022:
| Quarter Ended |  | Six Months Ended
Net revenues | July 2, 2023 |  | June 26, 2022 |  | July 2, 2023 |  | June 26, 2022
Franchise Brands | $ | 788.4 |  |  | $ | 826.0 |  |  | $ | 1,401.8 |  |  | $ | 1,476.4 |
Partner Brands | 172.9 |  |  | 219.4 |  |  | 305.6 |  |  | 425.9 |
Portfolio Brands | 107.1 |  |  | 135.8 |  |  | 199.1 |  |  | 248.4 |
Non-Hasbro Branded Film & TV | 141.6 |  |  | 158.0 |  |  | 304.5 |  |  | 351.6 |
Total | $ | 1,210.0 |  |  | $ | 1,339.2 |  |  | $ | 2,211.0 |  |  | $ | 2,502.3 |
Net revenues from Hasbro's Total Gaming category, including all gaming revenue, most notably DUNGEONS & DRAGONS, MAGIC: THE GATHERING and Hasbro Gaming, totaled $491.2 million and $528.3 million for the quarters ended July 2, 2023 and June 26, 2022, respectively, of which MAGIC: THE GATHERING contributed $311.0 million and $365.5 million, respectively. Net revenues from Hasbro's Total Gaming category totaled $877.7 million and $907.1 million for the six months ended July 2, 2023 and June 26, 2022, respectively, of which MAGIC: THE GATHERING contributed $540.1 million and $562.7 million, respectively.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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