Hasbro Swings to $521M Loss on Massive Goodwill Impairment

TL;DR

**Hasbro's massive goodwill write-down is a red flag, signaling deeper issues than just a bad quarter; I'm bearish on HAS until they show a clear path to sustained profitability.**

AI Summary

Hasbro, Inc. reported a significant net loss of $521.3 million for the nine months ended September 28, 2025, a stark contrast to the net earnings of $420.9 million in the prior year period. This loss was primarily driven by a substantial goodwill impairment charge of $1,021.9 million. Despite the net loss, net revenues increased by 7.3% to $3,255.4 million for the nine months ended September 28, 2025, up from $3,033.9 million in the same period of 2024. Operating profit for the three months ended September 28, 2025, was $341.1 million, an increase from $301.9 million in the comparable 2024 period, indicating some operational improvements in the recent quarter. However, the nine-month operating results show a loss of $286.4 million, compared to a profit of $630.2 million in the prior year, largely due to the impairment. Cash and cash equivalents decreased to $620.9 million as of September 28, 2025, from $695.0 million at the beginning of the year. Long-term debt saw a slight reduction to $3,318.8 million from $3,380.8 million at December 29, 2024. The company also declared cash dividends of $2.10 per common share for the nine months ended September 28, 2025, an increase from $1.40 in the prior year.

Why It Matters

This filing reveals a critical turning point for Hasbro, as a $1.02 billion goodwill impairment signals a re-evaluation of past acquisitions and potentially a more challenging outlook for certain business segments. For investors, this impairment directly impacts shareholder equity, which plummeted from $1,185.0 million at December 29, 2024, to $433.8 million at September 28, 2025, raising concerns about long-term value creation. Employees may face further restructuring or strategic shifts as the company navigates this financial setback. Customers might see changes in product focus or brand investment. In the competitive toy and entertainment market, this impairment could weaken Hasbro's position against rivals like Mattel, potentially limiting its ability to invest in new intellectual property or digital initiatives.

Risk Assessment

Risk Level: high — The primary evidence for a high-risk level is the $1,021.9 million impairment of goodwill for the nine months ended September 28, 2025, which directly led to a net loss of $521.3 million. This significant write-down indicates that the carrying value of certain acquired assets is no longer recoverable, suggesting underlying business challenges or a deterioration in market conditions for those segments. Additionally, total shareholders' equity decreased substantially from $1,185.0 million at December 29, 2024, to $433.8 million at September 28, 2025, largely due to this impairment, eroding investor confidence and financial stability.

Analyst Insight

Investors should exercise extreme caution and consider reducing exposure to HAS. The substantial goodwill impairment suggests fundamental issues with past acquisitions or current business segments. Wait for clear evidence of a successful turnaround strategy, including sustained revenue growth and improved profitability, before considering a new position.

Financial Highlights

debt To Equity

12.17

revenue

$3,255.4M

operating Margin

-8.8%

total Assets

$5,521.8M

total Debt

$3,318.8M

net Income

-$521.3M

eps

-$3.74

gross Margin

50.0%

cash Position

$620.9M

revenue Growth

+7.3%

Revenue Breakdown

Key Numbers

• $521.3M — Net Loss (For the nine months ended September 28, 2025, a significant decline from $420.9M net earnings in the prior year.)
• $1.02B — Goodwill Impairment (A major non-cash charge for the nine months ended September 28, 2025, indicating a re-evaluation of asset values.)
• $3.26B — Net Revenues (For the nine months ended September 28, 2025, an increase of 7.3% from $3.03B in the prior year period.)
• $433.8M — Total Shareholders' Equity (As of September 28, 2025, a substantial decrease from $1.19B at December 29, 2024, largely due to the impairment.)
• $620.9M — Cash and Cash Equivalents (As of September 28, 2025, a decrease from $695.0M at the beginning of the year.)
• $3.32B — Long-term Debt (As of September 28, 2025, a slight reduction from $3.38B at December 29, 2024.)
• $2.10 — Cash Dividends Per Share (Declared for the nine months ended September 28, 2025, an increase from $1.40 in the prior year.)
• $3.74 — Diluted EPS Loss (For the nine months ended September 28, 2025, compared to $3.00 diluted EPS earnings in the prior year.)

Key Players & Entities

• Hasbro, Inc. (company) — registrant
• $521.3 million (dollar_amount) — net loss for nine months ended September 28, 2025
• $1,021.9 million (dollar_amount) — goodwill impairment for nine months ended September 28, 2025
• $3,255.4 million (dollar_amount) — net revenues for nine months ended September 28, 2025
• $3,033.9 million (dollar_amount) — net revenues for nine months ended September 29, 2024
• $341.1 million (dollar_amount) — operating profit for three months ended September 28, 2025
• $301.9 million (dollar_amount) — operating profit for three months ended September 29, 2024
• $620.9 million (dollar_amount) — cash and cash equivalents as of September 28, 2025
• $3,318.8 million (dollar_amount) — long-term debt as of September 28, 2025
• $2.10 (dollar_amount) — cash dividends declared per common share for nine months ended September 28, 2025

FAQ

Risk Factors

• Significant Goodwill Impairment [high — financial]: Hasbro recorded a substantial goodwill impairment charge of $1,021.9 million for the nine months ended September 28, 2025. This indicates a significant decrease in the fair value of acquired assets, impacting the company's reported net income and equity.
• Deterioration in Operating Profit [high — financial]: The nine-month operating results show a loss of $286.4 million, a sharp decline from a profit of $630.2 million in the prior year. This is largely attributable to the goodwill impairment, but also suggests underlying operational challenges.
• Decreasing Cash Position [medium — financial]: Cash and cash equivalents decreased to $620.9 million as of September 28, 2025, from $695.0 million at the beginning of the year. This reduction in liquidity could impact the company's ability to fund operations or investments.
• High Debt Levels [medium — financial]: Long-term debt remains substantial at $3,318.8 million as of September 28, 2025. While slightly reduced, this debt level, combined with a significantly diminished equity base, increases financial leverage and risk.
• Inventory Management [medium — market]: Inventories increased to $396.7 million as of September 28, 2025, from $274.2 million at the end of the prior fiscal year. This rise could signal potential demand issues or challenges in managing stock levels effectively.
• Product Development and Advertising Costs [medium — operational]: Product development costs increased to $255.6 million for the nine months ended September 28, 2025, up from $212.2 million in the prior year. Advertising costs also rose to $227.3 million from $213.8 million. These increased investments need to translate into future revenue growth.
• Competitive Landscape [medium — market]: The toy and entertainment industry is highly competitive, with evolving consumer preferences and the emergence of new technologies. Hasbro faces competition from both established players and agile new entrants, requiring continuous innovation.
• Compliance and Product Safety [low — regulatory]: As a global toy manufacturer, Hasbro must adhere to various international safety standards and regulations. Non-compliance can lead to product recalls, fines, and reputational damage.

Industry Context

Hasbro operates in the highly competitive toy and entertainment industry, facing dynamic consumer preferences and rapid technological advancements. Key competitors include Mattel, Lego, and numerous smaller players. The industry is influenced by entertainment tie-ins, digital gaming trends, and global supply chain dynamics.

Regulatory Implications

As a global toy manufacturer, Hasbro is subject to stringent product safety regulations in various jurisdictions. Compliance with standards set by bodies like the CPSC (U.S.) and equivalent international agencies is critical to avoid recalls, fines, and reputational damage.

What Investors Should Do

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Key Dates

• 2025-09-28: End of Nine-Month Period — Reporting period for the significant net loss of $521.3 million, including a $1,021.9 million goodwill impairment charge.
• 2025-09-29: Prior Year Nine-Month Period End — Represents the comparative period with net earnings of $420.9 million and a positive operating profit.
• 2024-12-29: End of Fiscal Year 2024 — Baseline for comparison of year-to-date changes in assets, liabilities, and equity.

Glossary

Goodwill Impairment

A non-cash accounting charge recognized when the carrying value of goodwill on a company's balance sheet exceeds its fair value, indicating a loss in value of an acquired business. (A $1,021.9 million charge significantly impacted Hasbro's net loss and equity for the nine-month period.)

Retained Earnings

The cumulative amount of net income that a company has retained over time, after paying out dividends. (Retained earnings decreased substantially from $2,274.2 million at the end of 2024 to $1,452.4 million as of September 28, 2025, largely due to the net loss.)

Treasury Stock

Shares of a company's own stock that it has repurchased from the open market. (Hasbro holds a significant amount of treasury stock, which reduces total shareholders' equity.)

Accumulated Other Comprehensive Loss

A component of shareholders' equity that includes unrealized gains and losses on certain investments, foreign currency translation adjustments, and pension plan adjustments. (This account shows a loss of $222.4 million, contributing to the overall reduction in equity.)

Diluted EPS

Earnings per share calculated using the weighted average number of outstanding common shares plus all dilutive potential common shares (such as stock options and convertible securities). (The company reported a diluted EPS loss of $3.74 for the nine months ended September 28, 2025, compared to earnings in the prior year.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, Hasbro has seen a significant shift from net earnings of $420.9 million to a net loss of $521.3 million, primarily due to a $1,021.9 million goodwill impairment charge. While net revenues grew by 7.3% to $3,255.4 million, the operating results deteriorated sharply into a loss of $286.4 million from a profit of $630.2 million. Total shareholders' equity has been severely impacted, falling from $1,185.0 million to $433.8 million, largely driven by the impairment. New risks related to the substantial impairment and declining equity base are now prominent.

Key Financial Figures

• $0.50 — ange on which registered Common Stock, $0.50 par value per share HAS The NASDAQ Glob

Filing Documents

• has-20250928.htm (10-Q) — 1803KB
• employmentagreementcocks.htm (EX-10.1) — 8KB
• has-q32025xex311.htm (EX-31.1) — 9KB
• has-q32025xex312.htm (EX-31.2) — 9KB
• has-q32025xex321.htm (EX-32.1) — 5KB
• has-q32025xex322.htm (EX-32.2) — 5KB
• 0000046080-25-000164.txt ( ) — 9378KB
• has-20250928.xsd (EX-101.SCH) — 51KB
• has-20250928_cal.xml (EX-101.CAL) — 89KB
• has-20250928_def.xml (EX-101.DEF) — 249KB
• has-20250928_lab.xml (EX-101.LAB) — 634KB
• has-20250928_pre.xml (EX-101.PRE) — 478KB
• has-20250928_htm.xml (XML) — 1775KB

Financial Information

Part I Financial Information 5

Financial Statements

Item 1. Financial Statements 5 Consolidated Balance Sheets 5 Consolidated Statements of Operations 6 Consolidated Statements of Comprehensive Earnings (Loss) 7 Consolidated Statements of Cash Flows 8 Consolidated Statements of Shareholders' Equity 9 Condensed Notes to Consolidated Financial Statements 11

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 29

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 43

Controls and Procedures

Item 4. Controls and Procedures 43

Other Information

Part II Other Information 45

Legal Proceedings

Item 1. Legal Proceedings 45

Risk Factors

Item 1A. Risk Factors 45

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 45

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 45

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 45

Other Information

Item 5. Other Information 45

Exhibits

Item 6. Exhibits 46

Signatures

Signatures 47 2 Special Note Regarding Forward-Looking Statements Certain statements in this Quarterly Report on Form 10-Q ("Quarterly Report") contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements, which may be identified by the use of forward-looking words or phrases, include statements relating to: our business strategies and plans; products, gaming and entertainment; anticipated cost savings; expected debt repayments; expected impact of tariffs; anticipated benefits and potential impact of moving our Rhode Island operations to Boston, Massachusetts; expected impact of newly issued accounting pronouncements and tax legislation; financial targets; and expectations for our future performance. Our actual actions or results may differ materially from those expected or anticipated in the forward-looking statements due to both known and unknown risks and uncertainties. Factors that might cause such a difference include, but are not limited to: our ability to successfully implement and execute on our Playing to Win business strategy; our ability to successfully compete in the play industry and further develop our digital gaming, licensing and consumer products businesses and partnerships; our ability to continually introduce new and innovative products that are accepted by consumers, particularly for brands such as MAGIC: THE GATHERING in which we have seen an increasing concentration of our sales; risks associated with the imposition, threat, or uncertainty of tariffs, including the impact of reciprocal or retaliatory tariffs, in markets in which we operate which could increase our product costs and other costs of doing business, result in higher prices of our products, impact consumer spending, lower our revenues, result in delays or reductions in purchases from our customers, result in goodwill impairments, reduce earnings and otherwise have an adverse impact on our business; risk

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. HASBRO, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Millions of Dollars Except Share Data) (Unaudited) September 28, 2025 September 29, 2024 December 29, 2024 ASSETS Current assets Cash and cash equivalents, including restricted cash of $ 0.3 , $ 0.3 and $ 0.3 $ 620.9 $ 696.1 $ 695.0 Short-term investments — 489.3 — Accounts receivable, net 995.2 1,069.2 919.8 Inventories 396.7 375.4 274.2 Prepaid expenses and other current assets 397.2 391.6 353.5 Total current assets 2,410.0 3,021.6 2,242.5 Property, plant and equipment, net of accumulated depreciation of $ 1,075.8 , $ 1,100.8 and $ 1,026.7 243.0 331.6 302.6 Goodwill (Note 5) 1,256.5 2,278.9 2,278.2 Other intangible assets, net of accumulated amortization of $ 476.1 , $ 1,350.5 and $ 421.2 470.9 539.5 518.4 Other assets 1,141.4 1,058.3 998.6 Total assets $ 5,521.8 $ 7,229.9 $ 6,340.3 LIABILITIES, NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY Current liabilities Current portion of long-term debt $ — $ 500.0 $ — Accounts payable 381.4 420.3 341.5 Accrued liabilities 1,032.2 1,132.5 1,059.8 Total current liabilities 1,413.6 2,052.8 1,401.3 Long-term debt 3,318.8 3,462.6 3,380.8 Other liabilities 355.6 404.8 373.2 Total liabilities 5,088.0 5,920.2 5,155.3 Commitments and contingencies (Note 14) Shareholders' equity Preference stock of $ 2.50 par value. Authorized 5,000,000 shares; none issued — — — Common stock of $ 0.50 par value. Authorized 600,000,000 shares; issued 220,286,736 shares at September 28, 2025, September 29, 2024, and December 29, 2024 110.1 110.1 110.1 Additional paid-in capital 2,670.4 2,609.5 2,632.2 Retained earnings 1,452.4 2,408.2 2,274.2 Accumulated other comprehensive loss ( 222.4 ) ( 227.8 ) ( 246.4 ) Treasury stock, at cost; 79,963,865 shares at September 28, 2025; 80,798,468 shares at September 29, 2024; and 80,758,045 shares at December 29, 2024 ( 3,604.1 ) ( 3,612.8 ) ( 3,612.5 ) Noncontrolling interests