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Toy company Hasbro said it will provide an update on the sale of eOne during its current second quarter, which typically runs through the end of June.
“The sale process for the eOne TV and film assets is ongoing and we expect to provide an update during the second quarter,” said Hasbro CEO Chris Cocks. “The global Hasbro team continues to execute our strategy to unlock the value of our rich IP library across our growth priorities including in gaming, direct-to-consumer and licensing.”
Hasbro acquired the Toronto-based studio in 2019, which houses most of its entertainment assets and announced its intention to sell it in mid-November 2022. That process was jump-started by eOne founder Darren Throop announcing he would finish out his employment contract and then leave the company at the end 2022.
Now, Throop has been in talks to acquire the film and TV production and distribution unit back from Hasbro. The company retained J.P. Morgan and Centerview Partners to assist with the sale process.
As part of the sale, Hasbro expects to retain key assets from eOne such as the Peppa Pig, Transformers and Dungeons & Dragons brands.
The company expects to receive proceeds from the sale in the second half of the year and primarily use them to pay down debt and lower overall debt levels.
For the first quarter, the company’s entertainment segment revenue decreased 19 percent year over year, falling to $227.5 million from $185.4 million. Film and TV revenue also fell 11 percent, which Hasbro said reflected a lower number of new releases and family content in 2023 compared to 2022 and lower unscripted TV revenue. Scripted TV revenue was up with series including The Rookie, A Gentleman in Moscow and Yellowjackets.
The big movie release for the quarter was Dungeons and Dragons: Honor Among Thieves, which opened to a better than expected figure of close to $40 million at the beginning of April and won the weekend box office race.
For the full year 2023, the toy company expects revenue in that segment to increase to low- single digits and adjusted operating profit margin is expected to increase slightly from 8.6 percent in 2022. However the guidance will be updated once the sale process is completed.
Hasbro reported total first-quarter revenue of $1 billion, down 14 percent year-over-year, and a net loss of $22.1 million, compared to net income of $61.2 million last year. This comes as the toy company continues to work on improving its cost structure and cutting down on its high retail inventory levels.
“First quarter results came in ahead of our expectations and position Hasbro to meet our full-year financial targets,” said Chris Cocks, Hasbro chief executive officer. “Wizards of the Coast and Digital Gaming delivered strong fan engagement. Segment revenues increased 12%, including a 16% revenue increase in MAGIC: THE GATHERING, behind the successful release of Phyrexia: All Will Be One. Dungeons and Dragons: Honor Among Thieves delivered strong critical and audience reviews pointing to a promising long life including home entertainment and streaming, while also introducing our newest Franchise Brand to tens of millions of new fans around the world and positioning Dungeons & Dragons for robust full-year growth.”
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