Hasbro Inc HAS

Effective Changes to Focus and Costs Set Hasbro on Track to Structurally Higher Margins

Hasbro continues to hold a leading position in the nearly $28 billion North American retail toy industry (Circana), developing, manufacturing, and marketing well-known global brands that include Transformers, My Little Pony, and Nerf. The firm operates a relatively differentiated business model, thanks to its digital properties exposure, content creation ability, and key licensing arrangements, abilities can be better monetized with the Entertainment One (EOne) entertainment-related assets now divested (2023). Production capabilities support Hasbro's multimedia presence, as does Discovery Family, a joint venture that brings Hasbro's brands to television, bolstering the firm's brand blueprint strategy. Hasbro has historically dominated the big-screen, building brand loyalty and generating new streams of revenue from its licensing businesses (like Star Wars and Marvel). We think Hasbro and the toy industry have modest runway for growth ahead through international growth (Asia-Pacific and emerging markets still provide longer-term growth potential through share gains) and acquisitions of strategic players that fit into Hasbro's portfolio (for example, D&D Beyond).