Hasbro, Inc. (HAS) Earnings Call Transcript & Summary

All right. Good morning, everyone. I'm going to start by reading the disclaimer, so I don't forget. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/research disclosures. If you have any questions, please reach out to Morgan Stanley sales rep. So with that, good morning, everyone. Welcome to day 2 of the Morgan Stanley 2024 Global Consumer and Retail Conference. I'm Megan Clapp. I'm the U.S. leisure analyst here at Morgan Stanley. And I'm very glad to be joined today by Hasbro and the company's CFO and COO, Gina Goetter; and the -- I got to read this, the President of Toys, Board Games, Licensing and Entertainment, Tim Kilpin -- just keep adding on to this. For any of you unfamiliar with Hasbro, Hasbro is a toy and game manufacturer, owner of several brands, including, just to name a few, MAGIC: THE GATHERING, DUNGEONS & DRAGONS, NERF, TRANSFORMERS, Monopoly. And so Gina, Tim, again, thank you for being here today.

Thanks for having us.

Your last name threw me.

I know.

It's throwing me every day. So -- Hasbro is a company that's in the midst of a transition. So maybe we could start for those less familiar with the story, how would you describe the company today and where you're headed?

Got it. Well, thanks for having us. Thanks for joining us this morning. For those of you that probably hear Hasbro and know a little bit of our story, you think of us as a toy company. We like to define ourselves as a modern play company. We do have toys. We'll always have toys. But we also have a big portfolio of games, and we play in lots and lots of additional categories when you think about our Licensing business and the breadth and the scope that our brands go with that Licensing business. So if you break us down, toys is roughly 40% of our revenue base. It is an important part of our history. It's an important first handshake with our youngest consumers and fans. But what might be an interesting fun fact is that we're seeing a good amount of growth with adult consumers. In fact, over the past year, I think 40% of adults bought a toy for themselves. And as you think about the portfolio of brands that Hasbro has, we're able to play across that entire spectrum, from the earliest of consumers all the way to the oldest of fans. Our Games business, that represents another 40% of our revenue. And this is when you think about games, it's the traditional board games that you probably played as a kid. It also includes our strategic trading card games that is MAGIC: THE GATHERING. That is the biggest brand and the most profitable brand for the company. It just crossed the $1 billion mark in terms of revenue. And it also includes our role-playing line of D&D. And both kind of the analog versions of MAGIC and D&D as well as the digital experiences that go along with them. That's encompassed in the gaming business. And then the balance of our revenue is made up within Licensing, and that is licensing that we have with our businesses that we no longer produce ourselves for toys. So some recent examples like FURREAL FRIENDS, my little -- our LITTLEST PET SHOP. Those are businesses that we used to have that now are being run by others. We collect a royalty on that. It's also some of our hits that we've had over the past couple of years, Baldur's Gate is an example, MONOPOLY GO! that everyone likes -- talks about MONOPOLY GO!. But it's a business that allows us to take our rich treasure chest of IP and move it into categories and areas that we don't -- we're not going to own and compete. So I think soft goods, I think cruise ships, I think other amusement park type things that our IP and the vault of our IP has very broad reach. So these are the 3 different segments and businesses that we compete within. Tim and I actually joined the company around the same time, about 18-ish months ago. I don't know, we haven't really compared our interview experiences. But as we -- as I was interviewing, it was interesting talking to folks about where the company was. And depending -- people would either talk about the company, as it's a company that's in a turnaround mode, and they would say, "Oh, this is a company in transformation." They kind of would use those 2 words interchangeably as I -- depending on who I was talking to. It's actually a company that's in both. My walkaway is we are a company that is both transforming and we are in a turnaround mode. Our Games business is absolutely in transformation. We're trying to kind of chart out the path of what we want to be when we grow up. We have a very rich game business when it comes to the Hasbro gaming, when it comes to our current digital expressions of our games. We're also making investments into our own self-published video games. We haven't -- that's not in our revenue base yet, but it's investments that we've been making for many years. We think that gaming business is going to continue to be a nice growth vector for us and allows our brands to reach where the consumer is going. Our Toy business, that is one that is very much in a turnaround. So it's one -- Tim and I were stepping into the business, needed to get back to some of the fundamentals, both from an execution standpoint as well as an innovation standpoint. So we've been doing a lot of heavy lifting of just kind of rightsizing that portfolio and getting it set up for kind of the next tranches of growth. So it's been about 18 months. We have done a lot in 18 months. He has more gray hair than he did 18 months ago. So we have made a lot of progress in just fixing the fundamentals of the business, and we are really excited with where we're headed here in '25.

That's a great overview and a great segue to my next question, which is since you both joined 18 months ago, I think a considerable amount of your time has probably been spent on this toy turnaround. So maybe you could both describe what innings you think you're in for the toy turnaround? Gina, maybe from an operational standpoint. Tim, maybe from a demand creation standpoint.

Sure.

Sure. I will start. So what inning are we in? I would still -- we're probably in the early mid-innings of the turnaround. Like I said, it's been a busy 18 months. If you start all the way at the top, it was really about getting us refocused on play. And so about a year ago, now we divested our eOne business, the entertainment business. That really helped to simplify our portfolio and get us back focused on toys, games in our IP business. Also about a year ago is when we really significantly reduced the complexity across the business. So we have now taken out roughly 80% of our SKU count across the Toy business. We have brought our inventory levels significantly down, both our owned inventory as well as our retail inventory. And we continue to reshape our innovation pipeline, which I'm sure Tim will talk about more around this, kind of fewer, bigger, better. So really kind of going all in with some of our bigger -- biggest brands and extending their reach further. So that's been a lot of what we've done within the portfolio. We've also spent a fair amount of time refining our operating model, so how we're actually running the company, structuring our teams, making sure that we've got the right kind of operational processes built underneath to enable a more seamless and efficient operation.

Yes. So when I came in, and the same thing, about 18 months or so ago, I had spent most of my career and time in this industry, 25 years of Mattel, worked for some other smaller toy companies throughout the time as well. I spent some time at Disney. I spent some time on the consumer product side at Activision Blizzard. So I kind of touched a little bit of all of these kinds of challenges. And I was actually retired when I got the phone call about this opportunity. And for me, it was an opportunity to work with a portfolio of intellectual property that's really unparalleled in the industry. And the things that we were kind of dealing with, as I came into this, was a concern that we were not innovative enough, that we just -- we have to fix our innovation. We have to fix our innovation. I heard that a lot. The interesting thing as I got into it and spent time with the people on the teams and looked at what was in the pipeline, we didn't have an innovation problem. We had a go-to-market problem. We had a problem in terms of commercializing that in terms of accelerating it, getting it out in front of consumers more quickly and more effectively. And so I've spent the last 18 months of my time focused on those things. So in conjunction with what Gina was describing in terms of some of that process, we elevated our design and development functionality, so that now reports directly to me. I've got a direct pipeline to those folks. We've accelerated the process by which we make decisions and test in terms of new concepts and new ideas. We're bringing things to market faster. And in fact, one new brand that we're going to launch in 2025 was a very quick turn for us, quicker than the company has typically done. And then the last thing we did, too, was, to Gina's point, we needed to streamline. We needed to make things simpler in terms of the process. And so we've combined our Global Brands team. We combined our Commercial team. So those are all part of one organization now. They -- there's a lot less presenting to each other. There's a lot less of going back and forth and clarifying. They align quickly. They make decisions quickly, they move, and that has made us more effective, not only in terms of the product development process, a bit more effective in terms of developing the marketing programs. And I think as we go into 2025, you'll start to see some of the effects of those changes.

Awesome. All the work that you're doing, there's obviously a lot going on underneath the hood as it relates to the toy business down, call it, 20% in the first half, a lot of that driven by fee reduction, reduction in closeout volumes. You did expect to have a better second half as compared to the first half in that Toy business. But through the third quarter, you were still lagging the industry a bit. I think, first, your expectations to be in line for the year. So help us understand maybe the puts and takes there. And as we think about what's implied for the fourth quarter, Black Friday just happened, anything you can kind of share on holiday demand following Black Friday up until this point?

Well, I can tell you a little bit about just what we came out of this last week with Black Friday and Thanksgiving, and we were pleased with what we saw across the portfolio and across the base of customers, at least in the United States. We're still waiting for information to come in a little more fully from the rest of the world. Shoppers showed up. They showed up late, and that's probably the biggest concern that we've had is that the season kind of gets later and later. And so we're paying close attention to that. So we don't know what that means in terms of opportunities for further replenishment. But what we do know is that shoppers did show up. They engaged with our core brands. They not only bought the deals, but they bought regular priced merchandise as well. So it wasn't just a deal-driven kind of experience. People were looking for the brands that they know and love. And in our case, that was our Games portfolio, that was PLAY-DOH, that was MARVEL, that was BEYBLADE. Those things all resonated over the course of the last week. So we wish it showing up a little earlier, but they did show up.

There's not a ton of time between Thanksgiving and Christmas this year.

No, it's late this year.

Like I'm even realizing that as a mother. I was just trying to frantically shop for gifts. But to your point on kind of what -- how our year has progressed, our results get a little bit mucky, that's my technical term, just when you think about all of the divested businesses, plus, we've had a significant reduction in our closeout volume. So given all of the effort that we did last year to clean up our inventory, we just haven't had to leverage that closeout channel. That's a good thing for us. On the bottom line, it absolutely adds margin and profit back into the business, but you do see that kind of impact the top line. And as we were moving through Q3, it was more acute than what we had planned at the beginning of the year. Again, very good from a profitability standpoint and restoring the fundamentals, but absolutely saw that kind of pace down, which is what kind of drove us to change our guidance. That was the biggest piece that drove us to change our guidance for the year to that 12% to 14%. As Tim said, we're pleased with what we saw with Black Friday that the thing to keep in mind, because of how late it is, is this replenishment factor. So you can always be hopeful that there's replenishment that comes in at the end of the year. I think we're counting on it to be more of something that impacts -- positively impacts our inventory in our retail inventory and there's a carry-on effect as we move into 2025, less about kind of impact to '24.

Maybe to that point so that you didn't have to leverage the closeout volume in 3Q. Presumably, that could be a factor that impacts 4Q as well. When we look to -- maybe you could confirm that I'm thinking about that the right way, but then when we look to 2025, some of these underlying dynamics that have negatively impacted the top line this year, whether it's closeout volumes, license exits, any way to size the impact of the business this year relative to your current guidance? And just to try and understand what's the underlying growth in the business that you're thinking about as you look to '25.

Yes. Good lots of questions in there, lots of points in there. So I'll take the closeout piece because you're right, that has been an overhang for us this year. I believe I said on the last earnings call, I quantified it for folks, I believe, I said it's roughly $100 million of headwind on the top line this year, but it provides a $20 million benefit on the bottom line, that mix. So that's -- when you think about the decline of 12% to 14% guide, 1/3 of it is roughly coming from not having that closeout volume. As the other piece that's dragging us is the exited brands that to your point, we start to -- we don't have that as a kind of a headwind as we move into '25. As we think about the go forward for next year, I don't want to get too far out ahead of guidance in the next kind of 4 weeks really starts to give us a good tell of how that first quarter is going to play out. Obviously, us keeping our inventory positions tight in the retail, making sure that they're staying and we're seeing that pull through on POS, that bodes well for what we should see from a closeout standpoint moving through Q1. We still believe that the category itself is going to be flattish, maybe up a point, down a point. We're kind of in that range. But, again, the next 4 weeks really help us cement how I will feel about '25.

I think there's another thing for us to think about, too, is when we think about what we've "exited" from a brand's perspective. In some cases, these are brands that we have licensed out. So whether that's -- as Gina mentioned, FURREAL FRIENDS or LITTLEST PET SHOP or brands that have already been out to our licensing partners for a number of years, like Lite-Brite or Spirograph or TONKA trucks, all part of the intellectual property portfolio that the company still owns and controls and still derives revenue from. So even though we may be selling in those particular cases less of those toys directly, we're deriving a royalty revenue from that. And so we have to keep in mind that we've got a couple of different business models that are working in our favor. And the thing that I like to try to remind our partners about is when you add all that up from a retail perspective and add up the retail dollars those represent, we actually are -- just that licensed portion of the business in toys adds another point of share to what our total share is in the category. So it is the power of the IP and the power of the portfolio.

Good segue. Maybe we can talk about your partners on the other side, to someone like Disney, MARVEL, Star Wars. You have talked about the Star Wars portfolio being a little bit softer this year. So, Tim, you've spent a lot of time in this industry, maybe you could just talk about -- characterize the health of the partner IP portfolio today within Hasbro. And then, 2024 was a bit of a lighter year from an overall industry entertainment perspective. So what does the pipeline look like in '25, '26? How do you kind of see that evolving going forward?

Yes. Disney is our largest and most important partner. Nothing about that has changed. There are fewer things that we've been able to take advantage of from a storytelling standpoint with Disney over the course of this year, but there is a nice base evergreen business that we continue to do, and we've actually seen some nice movement on MARVEL, especially in the back half of this year in terms of pickup across a collector. The collector portion of the business, there's a real robust fan portion of that business. There is role play from a kid's perspective, whether that's the Hulk Fist or that's the Wolverine Claws or whatever those might be, but those are doing well for us right now. Sequentially, over the course of the next couple of years, this starts to get better in terms of the content slate. In 2025, we've got 3 MARVEL movies: Captain America, which launches in the spring; Fantastic Four, later in the year; Thunderbolts, which is coming, all of which are good setups for what happens in 2026. And also on Star Wars, even though Star Wars has been weaker in terms of content slate, there are some things that are coming along. Skeleton Crew is a Disney+ series that just launched this week and/or season 2 comes out. So there are some things in the pipeline for '25. '26 is a pretty significant year. So Avengers: Doomsday will be the first Avengers movie in 7 years. That will be out in May of 2026. The Mandalorian & Grogu, which will be the first Star Wars feature film since the end of the last trilogy is coming in end of May in '26 and then Spider-Man 4 in July of '26. That's a lot. That's -- and as we now know, those are still meaningful catalysts. They are meaningful catalysts from a consumer engagement standpoint. Kids get reengaged. Fans are very engaged with those. And, of course, we create product that is specific to fans for those events. And the retailers are engaged. We spent some time. Actually, yesterday, I was in Minneapolis with Target, and we talked very specifically about how we get ready to take advantage of a pretty phenomenal year in 2016 for that particular portfolio.

As a follow-up to that, can you spend some time just talking about how the overall relationship with your retail partners has evolved since you joined and maybe kind of your perspective on the state of your relationship with your major retailers?

The relationship has become more sophisticated. In general, it is far less the transactional experience than it was. And if I go back to my early years, and we were calling on Toys "R" Us and Child World and all sorts of people that no longer exist. These are partners that are very thoughtful and strategic about where they want to go. They are very thoughtful about their own competitive landscape. They want to plan further ahead. We were -- the conversation we were having with Target yesterday was about '26 and '27. We've already been meeting with them in depth about 2025 activations and programs and events and calendars, but for '26 and '27, now they want to start to think about what -- because they're sharing with us, here's what we're seeing work. We're seeing this work in collabs. We're seeing this work in new promotional opportunities with store-wide events, how do we plug into those things, how do we bring our brands to bear? The good news for us is we bring to them, not only if we've done our job right, we bring good products, but we're bringing really powerful brands. And so their ability to lean in and do something more with a Monopoly or a PLAY-DOH or a TRANSFORMERS is not just about what it does in the toy aisle, it's what happens across the rest of the platform. We'll have that next year in 2025 with Peppa Pig. We have a big surprise for Peppa Pig next year in 2025. And so the conversation we've been having and planning and have been for a year already with the retailers is about how do we activate that experience, that excitement on Peppa, not just in toys, but in apparel and in home furnishings and in infant and -- we have a relationship with Pampers for Peppa. So how do we take all of those connecting points for the franchise and activate them and eventize them with the retailer? So they've gotten more sophisticated, we've gotten more sophisticated, and we're planning much further ahead.

Great. And, Gina, maybe coming back to you. You talked about this a little bit, but you've seen despite the negative top line this year, some goodness on the margin line in consumer products. You're expecting to end the year in the mid-single-digit range. You've talked about getting that to double digits over time, in line with what we see from some other consumer products peers. That is a big step to get from mid-single digits to double digits. So maybe you could just spend some time talking about the building blocks of margin expansion in that segment looking beyond '24. How should we think about how much is driven by incremental cost savings that you haven't realized yet versus how much is reliance on driving positive volume growth in that business?

Yes, we have been doing a lot of heavy lifting on margin over the last 1.5 years. And it's tough to see it all play through the P&L this year just given what is happening. On the top line, that volume deleverage, as we talk about it, has a pretty material impact on our margin. So kind of job one, as we head into '25 is really stabilizing that top line at CP business end. That alone just stabilizing that base allows us to kind of stop the margin bleed and helps us more proactively plan with our suppliers and just kind of reap some goodness down the line when you think about supply chain, inventory management, all of that. So job one, stabilize the top line of CP. The other piece is that we have been working on in the past, call it, 1.5 years. We will continue to work on all of the productivity initiatives that we have going within supply chain. I would still say we're in the early innings of getting all of the supply chain productivity out. We started by doing some of the basics of just reframing how we go to market within logistics, how we're managing our lanes and our shipping network. We're now onto our supplier, how we're managing that supplier base. Since we've been able to take down the SKUs and manage that inventory, we're having different conversations with our suppliers. As we move into '25 and '26, another piece of the puzzle that comes into place is what we're calling DTV or design-to-value. So this is going all the way upstream to the initial stages of the development of the product and making sure that we're developing with cost in mind and with that intersection with the play pattern and making sure that we understand kind of how do we -- how we optimize for cost without sacrificing kind of the play experience for consumers. And we're methodically moving through our entirety of our portfolio and figuring out where we can take cost out and not be detrimental, or in many cases, actually improve play experience. And then, of course, the third piece of margin is all in our overhead structure. Again, we've been making changes on that. There's still more to come. We continue to evolve as we build new capabilities across the organization where that's allowing us to kind of take cost out. I expect that to continue to be a factor of margin acceleration as we move into '25.

Awesome. And obviously, all this is absent potential tariffs, which is still a lot of unknowns, but you did state around, I think, 40% of your total volume is built in China. I think Chris did make a comment recently that you think you can get that to 20%, but correct me if I'm wrong. And maybe just talk about the work you're doing to mitigate the potential tariff impact. How you think about whether toys could potentially be exempt again? Maybe just broad strokes on kind of your playbook as you think about tariffs.

Sure. Yes. So, yes, roughly 40% of the company's revenue is sourced from China. So that is right. And we have been working for a couple of years actually to diversify away from China so that the tariffs in and of itself were not the catalyst for us to start this work. It's been something we've been working in partnership with our suppliers on for a while. And there is a pathway to get it down to that roughly 20% in, call it, 2 to 4 years' time, the time line really dependent on how fast our suppliers are able to continue to invest and kind of build the infrastructure in alternate locations. But we've been working side-by-side with them on that. So that is one mitigating factor, obviously takes a different kind of sense of urgency or importance just given tariffs. Other things that we have done, just knowing what could be ahead. Obviously, we're looking at inventory positions and figuring out which ones of our evergreen SKUs we don't want to go out of our SKUs out in inventory. We've done so much good work there. But there are evergreen SKUs that we can be more strategic on and thinking through those pieces. We've also made sure that we are building resiliency faster, even with alternate suppliers as well. And, of course, I mean, we're looking at pricing and what could -- the range of outcomes that could be, but there's still so much unknown. Obviously, we're watching very carefully where the messaging is going, and we're modeling, but more to come as we turn the corner in the next calendar year. Anything you would add?

No. I think we just -- we're working to stay flexible about this. As Gina said, we've been identifying other opportunities. Of course, the rest of the world is also identifying other opportunities in other regions. But we've been working in other markets from a sourcing standpoint for quite some time. The other thing that I will say that, you go back to the point about what we're trying to do from an overhead perspective, is from a design and development standpoint, one of the steps we're taking now is to start to move more of that work closer to the source so that we're not just doing all that work over here and then shipping it overseas and then spending time going back and forth. We're kind of shortening up that process, both from a distance and from a time standpoint to make sure that we can be faster or we can be more efficient as we're working with, especially new markets and new potential sources and new locations.

Great. Maybe we could come back to the licensing side of the business. So, Gina, you said 20% of revenue, more profit, obviously, a very margin-accretive business. You've had 2 incredible hits in the last year with Baldur's Gate 3 and MONOPOLY GO!, I think driving close to $200 million of profit for you. Obviously, it's challenging for any of us to, and you included, I'm sure, to predict that we might see more hits like this, but you talked about some of the other brands that you've been out licensing. And so it is more, I think, than those 2 brands. So maybe you could just spend some time contextualizing some recent wins you've seen in the licensing business outside of Baldur's Gate 3 and MONOPOLY GO! that maybe we all pay attention to. And how you're thinking about the licensing business overall contributing to top line and profit growth going forward?

Got it. I'll do that overall, and then, do you want to take that?

Sure.

To your point, it's not -- this isn't a new model for us, the licensing model, and especially on the digital side. Yes, you cannot predict a MONOPOLY GO!. You couldn't even predict a Baldur's Gate. Maybe Chris predicted a Baldur's Gate 3. But I don't know that many people could have predicted the Baldur's Gate 3. But our partnership with Scopely is another one of our great partnerships. We have lots of titles that Scopely is working with, and we continue to kind of ideate and feed kind of at the top end of the funnel. So we expect the digital side of licensing to continue to be a good contributor for us moving forward.

Yes. And it's not just any 1 or 2 big deals. It's sort of the depth and breadth of all of these partnerships across all of the various brands in the portfolio. So in Peppa Pig, we talk about Peppa Pig, and you may not think about this, this way. But at a retail value standpoint, Peppa Pig is a $1.2 billion property from a retail value standpoint. And some -- and frankly, the majority of that is not toys, it's other categories. It's apparel. It's home furnishings. It's baby. It's furniture. It's all these kinds of things that a consumer wants to engage with and bring into their lives based upon their love for Peppa Pig. And so that's one aspect of it. We do it with TRANSFORMERS. And I'll give you a good example on TRANSFORMERS, where we're working with a lot of partners both in toy and out of toy. On the digital side, we've got partnerships with Minecraft and Roblox, which are great platforms from a play standpoint. We're doing partnerships with LEGO. So LEGO is creating their own versions of TRANSFORMERS. We're doing partnerships with Hot Wheels, where they're doing it. We're doing partnerships with Ninja Turtles, where we're creating the van as a TRANSFORMER. So we're looking for a lot of different ways to bring this to life. And I know we've talked about Kayou, which are the trading cards that are being sold right now in China for MY LITTLE PONY. And, again, MY LITTLE PONY has been around for 40-plus years. And it's having a moment in China right now based upon these trading cards. We've sold 2.6 billion packs of these trading cards just in China. And now beginning to roll those out around the rest of the world. So -- and in all of those cases, those are franchises that are not just engaging with kids, but they're engaging with families and they're engaging with fans. And at the end of the day, when we look back at the ability to leverage the portfolio across both toy and licensing, it's because of that multigenerational appeal that the portfolio has, and so we just -- we lean into that.

Great. So you talked about toys, licensing, games, the last big segment to hit on, let's talk about MAGIC. The growth this year has been a bit above your expectations. But based on your guidance, you're still expecting it to be down for the year. A common pushback we do hear from investors, and it has been consistent for several years, is how do you get comfortable with sustainable growth in that brand? So can you remind us maybe looking forward at some of the launches that you've talked about that are planned for 2025? And just bigger picture, what's the right growth rate for MAGIC at this point?

It's the perennial question on MAGIC. Can you still grow? And if you look to the first 3 quarters of the year, MAGIC is up 5%. And to your point, we are calling it down for the year. That's really a factor of we're not having a holiday set for The Lord of the Rings that we had the previous year and just how the set timing plays out. So there's nothing in the underlying kind of health of the business that has us concerned on MAGIC. It is an extremely sticky business. I actually don't think we do a good enough job explaining how sticky this business is. And Kern and I were just looking at some of the kind of the mass facts on it, 50 million people have engaged with the game. And when you look at our MAGIC Arena, which is the digital expression of it, we have 13 million registered users. These are all folks that are probably in the older, call it, 15-plus folks that are playing the game, and they stay with it. Of that population, I think only 1/3 in any given time are new users. And those folks that are in the game are buying at least a set a year if not more than that, and -- our set and our ranges of sets. The price points there are depending on what you -- that can move you up and down that scale of dollars that they're spending. And so that underlying fan base, just the stickiness of it is what makes us feel like there's a sustainable kind of forward growth. The other piece then comes in is where all of the innovation that we have coming on the brand. Next year, we have -- we did our first Universes Beyond launch with Lord of the Rings, which was huge. That was back in 2023. As we turn the corner into 2025, we have 2.5 -- I'm calling it 2.5 sets within Universes Beyond. So 2 big ones that we've announced, one, a smaller one that we haven't quite yet announced. And just what we saw with Lord of the Rings and what that did, not only in terms of bringing in new users, it really helped to engage that active base that we have. And so we're expecting '25 and just Universes Beyond as we keep moving forward with MAGIC to provide a nice undercut of growth for us.

Great. We have a couple of minutes left. I did want to leave time if there's any questions in the room. No one. I'm shocked. Okay. Maybe it's a little bit -- yes, it is. And it's cold in here. To that point, the business has evolved over the last several years, you've described it. It's a play company, but you have game, toys, licensing. But when we take a step back, look at the business through the lens of those 3 segments going forward, how should we think about those 3 segments? And you touched on it a little bit with toys, maybe stable to up a little bit. But how should we think about those businesses contributing maybe to both top and bottom line growth?

Okay. Without getting into guidance. Without getting into guidance.

Yes, long term.

Yes, long term. So we've talked about toy running with the category or slightly above just when you think about us wanting to drive share. So we believe the category over time is always going to be hovering in that flattish, up 1, down 1 year, and we expect that, that is basically where our Toy business from a top line will perform. The story in Toy really is going to be about the value that we're driving as we kind of clean up the guts of the P&L and get that profitability back to where -- kind of more in line with our competitive set. So that as we think about the long-term model on Toy is think stable top line, much more profitable business. Our Games business is where there's higher levels of growth, whether it be in magic, what we just talked about, or some of these new ventures where we're headed with the video games, that growth -- the revenue growth is going to be coming from the Games side of the business. And that is very profitable for us as well. Our MAGIC business is the most profitable business that we have within the company. So when that grows, that does good for Hasbro overall. And then IP and Licensing continues to be an opportunity area for us. I mean, obviously, it's hard to predict a MONOPOLY GO! and a Baldur's Gate, but it does -- the strength in the bulk of our IP just provides us an opportunity to go and play in places that we don't have to invest our own capital, but it allows us to capitalize on growth trends even within other segments or other industries.

Great. Well, if there's really no questions in the room, I think that's a good place to end. And thank you, Gina and Tim, for joining. And thank you, everyone, for being here.

Thank you.

Thank you.