Okay, great. Let's get started with our next session. Thank you, everyone, for taking the time to join us today. My name is Stephen Laszczyk, and I'm the lead analyst for the entertainment sector here at Goldman Sachs, and we are excited to welcome to the Communacopia + Technology Conference this year, Chris Cocks, the CEO of Hasbro, and Gina Goetter, the new CFO of Hasbro. Chris, Gina, thank you for taking the time to join us today. Thanks for having me. Stephen, thanks for having us. Absolutely. So, Chris, maybe starting with you—or actually, sorry, I wanted to get to Gina. I think there's a Safe Harbor that you wanted to— Oh, shoot! I don't have the Safe Harbor in front of me. Sorry. Kristen's gonna do our Safe Harbor. That anything we say today could be forward-looking statements, and you can access any comments we have on the forward-looking statements on our website. Thank you, Kristen. That- That was the one thing I was supposed to bring up here today. I think everyone's well aware of it, as I heard before, and you can find our Safe Harbor on our public websites as well, or you can reach out to me directly. But Chris, maybe starting with you, 2023 has been a big year for Hasbro so far, between executing against your Blueprint 2.0 strategy, you announced the sale of the eOne film and TV business, and you're adding some new members to your senior management team, including Gina, who we're lucky enough to have with us today. So maybe to start, could you talk about how you believe these developments have positioned Hasbro to execute against some of the key opportunities you see ahead to create value for shareholders? Yeah. So, I think Hasbro is kind of a classic turnaround business. We operate in three separate businesses: entertainment, games, and toys. And we have a different kind of motion and strategy for each. So in entertainment, it's been about right-sizing our footprint in that business and really focusing on Hasbro's IP. So we decided to exit out of our film and TV division, selling that to Lionsgate. I think that'll be a win for that team and a win for Lionsgate, and good for our shareholders as well, and our focus as a team. In toys, I think that's kind of more of a classic turnaround, where we're driving out costs from that business, we're building up our people capacity and our innovation capacity to take share, and I think over time, what our toy division has as its greatest asset is its brands. And I think there's some really fun adjacencies and brand expansions that we'll be able to pursue over the next couple of years. And then last but not least, is games, and games is all about driving a hot hand. We have an amazing portfolio of owned and operated games. Games has been, I think, one of the fastest-growing and most successful sectors in entertainment. Hasbro has certainly benefited from that, with an over $2 billion games business with over 30% operating profit margins. And we're leaning into that more and more, particularly in the digital side, whether that's licensed games, like we have with Baldur's Gate 3, which is based on D&D, or Monopoly GO! from our partners at Scopely, whether it's owned and operated, kind of, digital tabletop games that are adjacencies to huge brands like Magic and D&D, or, all-new AAA games and publishing capability, like we've been developing for the past several years, and I think you'll hear more about from us over time. So at the end of the day, I think our strategy is all about executing with excellence in each of those areas, making sure we have great people who are driving it, and making sure we have the right growth mindset to take advantage of the opportunities in each. So that's a great overview, and I definitely want to dive into each of those opportunities separately. But maybe starting with the recent management changes, 'cause it's a question we've been getting recently from investors. Your COO departed back in January, and Tim Kilpin joined as President of Toys, Licensing, and Entertainment in April. We obviously have Gina, who recently joined as well. How does the new management structure at Hasbro work, and what have been some of the key deliverables that we've seen so far since those new members have joined the team? Yeah, I think at the ground floor of any successful transformation and any successful turnaround for a company is having outstanding people at the helm. And I couldn't be happier with the people we've brought on board. Gina is our CFO, but nominally, she's actually our COO. She controls not just our finance organization, but our supply chain teams, our IT organizations, and our transformation management functions. She has an outstanding background doing that at absolutely blue chip companies, whether it was as a divisional leader at General Mills, or most recently as a CFO at Harley-Davidson, where they did a lot of great work, driving the profitability of that, like, hallowed motorcycle brand. Tim Kilpin joins us on our toy team. Tim's a nearly 40-year veteran of the toy industry. He has pioneered some of the biggest brands and franchises in toys, and I think he's gonna be outstanding, bringing on board, like, a very sophisticated way of driving franchise management, thinking about design, and helping us to drive a lot of value out of one of the best brand portfolios in entertainment. And then, beyond Tim and Gina, we have a host of other experts that we've either promoted in the company, 'cause Hasbro has a lot of native talent, that we feel like we can unleash, or bringing on other industry experts, whether it's the head of supply chain, new data analytics capabilities, new marketing capabilities, new communication capabilities. Thanks for that. Gina, one of your big initiatives over the last few quarters has been the Operational Excellence program- Mm-hmm. where you're, you've identified between $250 million and $300 million in potential cost savings that you're looking to carry out through 2025. Could you walk us through maybe how much progress you've made on that goal to date? Sure. where your cost-cutting initiatives have been most effective so far, and where there's still perhaps some more work to be done? Absolutely. So, back, it was October, November, when the company did Investor Day, we committed to that $250-$300 million of cost saves. Through the first part of 2023, we found about $100 million of it, $80-$85 million of it, $84 million to be specific, hit us here in 2023, and $20 million of it we actually realized back in 2022. So, kind of the first part of this year we found a third of those savings. Where they, they've really come in across the P&L. A huge focus within the supply chain, particularly within logistics. Not only has the broader logistics environment calmed a bit from the peaks of COVID, we took advantage of that. We went out and recast many of our contracts, so that, that drove some nice favorability within the P&L. But we've also seen some nice core cost savings within our broader operating expense budgets, whether it be within as we kinda redid the organization and created some org efficiencies. We're relooking at some of our core processes, particularly within product development. All of that is kind of bringing some savings within the P&L. So that first $100 million really focused on logistics, and focused on some of the people cost coming out. Got it. Thanks for that. And then as you execute on more of these cost savings- Mm-hmm. Should we expect them to flow directly to the bottom line, or, or are there areas to perhaps reinvest back- Yeah - into the business, perhaps in faster-growing segments like Wizards of the Coast? Sure. I think you're going to see a little bit of both, and as you think about, there are two separate sides of the business. Within toys, it's all gonna be about profitability, and a lot of the cost savings you'll see from us over the next couple of years is gonna go right into the margin. We know that we have to improve the profitability of that business over time. I think on the Wizards side, as we find cost savings opportunity, the opportunity there is to keep putting it back into the growth opportunities. There's some really good momentum across that business. Our job now is to free up the cash to be able to keep investing in those opportunities. But from a, how you're going to see the margin materialize, when you look at our margins through the first half of the year, while we have that $84 million in our, in our results right now, it's being offset by the higher cost to clean up the inventory. So you're not seeing a kind of margin improvement through the first half of the year. Mm-hmm. That starts to improve for us as we move through Q3 and Q4. You'll start to see those cost savings directly impact the margins. And then, as we move into 2024, we expect, particularly within the consumer products, you'll continue to see some nice margin acceleration. Yeah, and we'll certainly dive deeper into margins- Yeah, definitely. but that's helpful to frame that opportunity. But perhaps, maybe on the Operational Excellence program, is there anything that you've seen maybe to date that gives you confidence or perhaps the opportunity to see cost savings in excess of $300 million- Mm-hmm ... over, over the long term? Yeah, Gina, are you going to promise? I'm not. No, I'm not. I'm not going to commit to another... I am based on what I've seen in my four months, I'm confident with the numbers that we've put out there. The opportunity is really around complexity and simplification and getting after just operational, like, the how we're running our business. Mm-hmm. That will, that will contribute to that $300 million. So not committing to a higher number yet, but feel really good about the, the target that has been put out there. Fair enough. Mm-hmm. Maybe- More to come, dot, dot, dot. We'll stay tuned. Maybe pivoting to one of the segments that you mentioned you're reinvesting in then, and that's Wizards. Hasbro, you're showing a good bit of positive momentum in the Wizards and digital gaming segment recently with Baldur's Gate 3, Monopoly GO! performing particularly well in recent weeks. Gina, could you maybe talk a little bit more about the degree of success you're seeing for those games in particular, and perhaps any detail you could add on the financial contribution of those games- Sure ... in the third quarter or- Do you want to start with- No- I mean, You please, go for it. I was going to say, you just took, like, his favorite answer away from him on how the games are performing. So as a new in the gaming environment, what I have observed about these two games, from Baldur's Gate 3, and just how the game itself, the distribution, and how the fan base reaction has been, like, getting a 97 Metacritic score, again, new to gaming- Mm-hmm ... understand that that is a pretty big deal. And the momentum that it's creating, not only with our fan base, but our partners, has been enormous. And I know Larian, who is our chief partner in that development, is very pleased with the success of that game and already has ideas for where this could go next. So So that's always a good sign when you're working with a developer who not only is seeing a return on their investment, but is interested now in talking with you about what comes after that. Monopoly GO!, same thing, the most downloaded game, I think, within North America. That... And those don't come every year. Those are few and far between. So for us to take an asset and a brand as big as Monopoly and turn it into kind of a, a digital game, something that I don't know how many of you, how many of you have it downloaded on your phone? Do it. I... Yes, thank you. Are you addicted to it? Yeah. Yeah, so I mean, it is such an easy game and a way to bring people into the brand. From a revenue and how the business models work for both of them, they're a little bit different, how the revenue stream works. Think about Larian and our partnership in Baldur's Gate is a true kind of royalty stream. Monopoly GO!, similar setup, but a little bit of a different financial kind of model around that. Larian has, and Baldur's Gate will have a ramping royalty stream, so the more we sell, the more money that we're going to make, whereas Monopoly GO! is more of a standard, a standard contract that we've put in place. Anything more in terms of the framework of the splits that you can say on those deals in particular, or? In what regard? Just the in terms of licensing or royalty stream- Oh, yeah ... from those deals? Yeah. I would- if you think about how the contracts are, there's a pure royalty stream that is more Baldur's Gate. As you think about Monopoly GO!, there is a royalty stream, but there's also minimum guarantees that we've partnered with Scopely on. So there's a little bit more... I see it as a nice annuity that we have with Scopely and Monopoly GO! And then, as it over-delivers, that helps us over-deliver against that minimum guarantee. We tend to keep details of the contract- Mm-hmm ... confidential- Yeah, yeah ... between the companies. But they're both pretty lucrative, I think, for both sides. Scopely's doing fabulously well with Monopoly GO!, and I think Larian couldn't be more pleased with what they did with Baldur's Gate 3. I think the brands helped contribute to that, but I also think those two teams just knocked it out of the park. They're two incredibly highly rated games. I think Baldur's Gate 3, I think the peer games, in terms of how it's rated, are, like, GTA IV and the last Legend of Zelda. So, like, that's truly rarefied air. And Chris, I was going to save a longer-term question on Wizards for you. I'll bring it in now. Wizards, you've outlined in years past, you expect the segment to grow high single digits, on an annualized basis Baldur's Gate, Monopoly GO!. But maybe beyond that, what do you think drives that long-term annualized growth in the segment? What most excites you looking at it? Well, I think first and foremost, it's the category. Games, to me, is a true secular tailwind inside of the entertainment industry. Games are the biggest single, particularly digital games, are the biggest single category inside of all of entertainment. I think they've had a mid-single digit to high single-digit revenue CAGR for the last decade, and I don't think that's slowing down anytime soon. I f you look at Gen Z, if you look at the generation before Gen Z, even Millennials or my own Gen X, increasingly, as consumers are getting younger, their favorite brands increasingly are gaming brands. Like, play and the amount of time that you invest in these brands just are super powerful. And I think that drives our entire games portfolio, and our Wizards portfolio in particular. Magic: The Gathering has had a double-digit CAGR for the last 14 years. I think as Magic starts to get larger and larger, it starts to be kind of a factor of the law of large numbers. So do I think that we can continue to do double-digit revenue CAGRs? Probably not. But do I think we can grow the game equivalent to the overall games industry? Yeah, I totally think we do. Dungeons & Dragons, that is a brand that tends to dominate a relatively small category of tabletop gaming. It's probably... D&D's rule set probably drives 70%-80% of the play inside of the tabletop role-playing category. But as I think, as you see with something like Baldur's Gate 3, there's this massive adjacency with digital role-playing games, that if the TAM of tabletop role-playing is, call it, 50-60 million consumers, the total addressable market of video games is more like 600 million to a billion consumers, and the brand has incredible relevance in that area. So I think there's a lot of upside in D&D, both in licensing and in executing our own digital opportunities. And then, just generally speaking, digital, like, there's a massive opportunity both in licensing and our owned and operated games inside of that area. A s particularly when you look at categories like mobile, there's more and more of a premium that gaming companies are putting on brands that people have a strong affinity to, and break through the clutter of, like, these thousands of games that release literally every month. Whether it's Monopoly on the casual side, D&D or Magic on the more hardcore side, or Transformers or even G.I. Joe in kind of like the mid-core side Hasbro has this amazing vault of IP that I think gives us a lot of X factor in terms of value of the company and future potential of our brands. You mentioned the opportunity on the TAM side, the number of players or users interested in the IP. How predicated is your strategy in both digital and tabletop on expanding the new audiences through different partnerships, through different pieces of content? We have Lord of the Rings, Assassin's Creed, this year. We've had the D&D movie. How does that play a role in the outlook for revenue in that? Well, I surely think as the leader of arguably, as the leader of tabletop gaming, which I think Hasbro is, whether it's in board games or in kind of like trading card games or role-playing games, like we have with our board game portfolio, Magic: The Gathering or D&D. As the category leader, it's incumbent upon us to drive new player adoption and help to drive and grow the category, and so we certainly invest accordingly. We invest with our channel partners, particularly our Wizards Play Network with Magic and D&D. We invest with our retail partners. We invest with, like, our creators and inventors to bring new products to market, which we do on the order of dozens and sometimes even hundreds of new games per year for our board game portfolio. But, we can't be limited by the TAMs of the categories that we exist in today. We also have to be open to adjacencies to them as well. So digital tabletop expressions like Magic: The Gathering Arena or D&D Beyond is important. Licensed partnerships like we have with Scopely and Larian, I think are important. And then becoming our own publisher inside of digital games and taking advantage of that massive addressable market is also important to us. And it truly is an and, it's not an or. I think we can successfully drive tabletop game growth while also taking advantage of these exciting digital adjacencies. Got it. Maybe a question for both of you. You moved ahead with a resegmentation of your brand portfolio earlier this year. Could you just, maybe at a high level, explain what those notable changes were to the resegmentation and what you hope to communicate to investors through the resegmentation about current financials or maybe the company's priorities moving forward? Do you want to talk about what you did? Yeah, sure. What you're asking. So, this predated Gina a little bit, so I'll take this one. So traditionally, Hasbro has had this concept of franchise brands and, I think we call it, portfolio brands- Yeah ... basically speaking. And we did a refresh of how we defined what a franchise brand was versus a portfolio brand versus a partner brand. You know, I would say in our classic model, it was a little bit more qualitative, what became what. A partner brand was very clear. It was someone that we would work with as a partner, whether it was, like, one of Disney's brands or Beyblade, which we work with with Takara Tomy. But the difference between a franchise brand and a portfolio brand didn't have a lot of KPIs associated with it, so we put those in. So for a franchise brand, we need to have a minimum of around $150-$200 million of revenue. We need to see a path towards 15% operating profits over the next 3 years, and ideally, over the next 5 years, 20% or higher. And we need to see meaningful revenue growth associated with them. And then last but not least, we always want our franchise brands to be either the number one or number two brand in a category or one of the top growers in the category. So, for our franchise brands, we picked 5 categories we wanted to focus on: preschool, action, creativity, games, and then outdoor. And we picked kind of a, a relevant category captain in each. And so in 4 of those categories, we're the number one player in those categories, and in 1 of those categories, preschool, we're the fastest-growing player in that category. So it's a great way of helping people define what a franchise brand is and isn't, gives them something to aspire to internally. I think it's easier for investors to understand their importance because our franchise brands drive over 60% of our revenue and well north of 80, frankly, even more than 90% of our profitability. And it just, I think, makes our story a little bit easier to understand both internally and externally. And from my end, this, like, that 60% and 80% is important internally. How I've seen that come to life is as we are prioritizing our investment decisions, making sure that those franchise brands are set up kinda top to bottom with, do they have the innovation that they need? Do they have enough marketing support? Do we have the best people working on them? Like, that was another piece of the framework, is setting those kind of apart from all the other brands within our portfolio. And I think the team did a really nice job of saying, if there isn't a runway to meaningful either profit acceleration or revenue growth, how do we monetize these brands differently? Making some tough calls early about some sacred cows that had been with the previous team of how a brand was gonna be treated, and now it's gonna look a little bit different, but it could be more profitable for Hasbro in the long run. That was actually one of my follow-up questions- Mm. was evolution through the strategy, focusing on larger brands. Any key learnings since then, making some of those hard- Mm Decisions on what brands to focus on? And maybe as we look forward over the next couple of quarters, what toys or what brands can we expect to be most prominent out of, out of Hasbro over- Mm. the holiday season? Yeah, I mean, I, I tend to be kind of a simple guy, and so spreadsheets tell you a lot. So when you have a spreadsheet and you can say objectively, what's driving our revenue and what's driving our profitability, and then historically, what have they done, and are they at a low or not? That tends to be a fairly easy way to be able to segment brands, and it kind of naturally happened with our brands as well. I think what gets a little more complicated is when you take yourself off the spreadsheet and you have to communicate that to teams, a lot of which who've been pouring their blood, sweat, and tears into driving a brand or investing in a business or have a passion for a certain category. You got to be able to land that brand segmentation with this notion of, "Hey, all we're doing is saying, what are the franchise brands that exist today, and what do you need to be to be considered that?" So it gives... Hopefully, it gives spark some ambition and some desire in people who didn't quite make the cut to do things a little bit differently and reinvent themselves. And I think that's a lot of what's going on, particularly inside of our toy portfolio today. Mm. Now, that doesn't happen overnight. Rome wasn't built in a day. But it certainly gives our teams, I think, a framework to be able to think over the next 18-36 months about, "Hey, how can I expand the number of categories I'm in? How can I promote my brand and make it even bigger?" And hopefully, at the same time, it rewards our investors because we have very clear KPIs about what we want our brand portfolio to hit, and those will be accretive to the overall profitability of the company. I think we appreciate the spreadsheet simplicity as well. It's a great way to think about it. And maybe pivoting a little bit, Gina, Hasbro came into 2023 with higher levels of inventory than a typical year. You made significant progress clearing out some of that inventory- Mm-hmm through the first half of 2023. But that said, you mentioned on your last quarter call that there was still some work to be done. Could you maybe just give us an update on how inventory levels have been trending in the second quarter and when you expect them to fully normalize? I know there's some nuance between your own inventory- Yeah, yeah and then retail inventory. Sure. To get that back. It's always, like, the fully normalized is always the catch question. Yeah, I would say the company, again, prior to my time, really prioritized cleaning up inventory coming out of last year, and through the first half, we are down substantially. At Q2, we reported we were down 16% overall with inventory. Our retailers were down about the same. So down 16% for our own inventory, down about the same with the retail inventory. But within that, when you look at our toy business, it was down about 24%. And we've said for the year, our goal is to bring our inventory levels down to 20%. In terms of, does that get us back to normal or healthy? It gets us pretty darn close. I mean, I think there's always room to optimize inventory, especially as we're reducing complexity and kinda trying to simplify our operation, but it gets us in a lot better position, both one, going into the holiday, but then two, as we come out of it and start next fiscal year, 2024, we'll be in a much healthier spot. Maybe going into the holiday- Mm-hmm ... I'm curious what you're hearing on the retail front from your retail partners in terms of consumer demand and perhaps their willingness to restock heading- Mm, mm-hmm ... into the holiday season. And how's what you've been hearing from your retail partners impacted your outlook for the rest of the year? Yeah. I don't know that we're hearing the same thing from all of our retailers. There's kind of a camp that is really leaning into the big toys and share growth and winning the season, and there's another camp that's looking at the macro outlook and still remaining quite cautious, and probably still has a little bit of some scars or some whiplash from the inventory situation from last year. They just finally are getting themselves healthy. So we've got both sides, both sides of the coin that we're dealing with, and our commercial teams are partnering very closely with all of them to figure out kind of where their strategies are as a retailer, and making sure we've got the right product, the right placement at the shelf heading into the holiday. Again, we're going in a much healthier position, so that helps. In terms of our outlook for the year on toy, there is no question that we need to see a change in the trend for the overall category as we move through September here. We really haven't seen it to date through August. August was still a pretty rough month in terms of category movement. But we're hopeful that as the retailers get through the back to school, and they're done resetting their shelves for the holiday, we start to see that trajectory change. For us, for our outlook we've called down -3% to -6%. We're assuming that the category starts to improve. We're assuming that the health of the consumer does not deteriorate significantly. If we don't see that here in September, like, that, that's gonna put pressure on that toy business in that, in that Q4. So there's no doubt that if you think about our phase in Q3, Q4, Q4 is a bigger quarter for us than Q3, just based on what we're seeing play through on the category. Now, on the flip side, we've got our games business, including board games, that is doing quite well. And we've committed in our, in our last earnings call, we said we, we see growth to high single digits, and we feel pretty confident in our ability to achieve that. That kicks off a nice mix for us. So as that business continues to perform and continues to grow, that helps our margin profile. So revenue, we're cautiously watching what's gonna happen over the next few weeks within the category on toy, and if that's gonna help give us a nice tailwind as we think about holiday. And then on the margin side of the business, we're feeling pretty good about the margin guidance that we put out there, both between, like, this mix that I talked about, as well as we've got some good momentum within our cost savings initiatives that will allow us to keep kind of the P&L intact. Is it fair to say on the consumer side, the next month or so is probably when you'll get a good sense of how that demand is shaping up? Absolutely ... for the holiday season? Yeah. And then thinking back to last year, and I know as we got into the earlier days of earlier parts of the holiday season, there was some correction on the retail side from what they were seeing in demand. Is perhaps any opportunity for that, perhaps in reverse, if we're not going in with stronger demand, we see that develop for retailers to ramp up? I'd be curious if you'd comment on that, and then just from Hasbro's perspective as well, your nimbleness to ramp up- Mm-hmm ...and down production- Yeah ... into to holiday. Yeah. We learned a lot coming out of last year. And again, I wasn't here, so I'm learning from their learnings from last year. But just the increased communication and transparency on information, not only with our retailers, but within our own internal teams- Mm-hmm ... our commercial and our supply chain teams, to be able to respond more real time to changes in demand. We've learned a lot. We've put more processes in place to do that. Again, the next 4 weeks are critical. We need to see that movement in the category trend, 'cause there comes a part in the holiday season where you can't, there's lead time with supply chain. So the next 6 weeks are really critical for us to watch, to see that is the trend kind of moving? Are the product placements in the right spot? We have pretty good availability from a capacity standpoint to make pivots as needed. Obviously, if we get too close into December, us being able to impact December, movement at the shelf with changes, that gets tougher. Mm-hmm. But we have some agility right now to be able to pivot. Got it. Maybe switching gears and digging deeper into the consumer and entertainment side of the business. T hinking back, Hasbro let go of Disney Princess at the end of last year, but renewed its license with Marvel and Lucasfilm. With Disney, can you talk a little bit about that decision to renew Princess and... or to not renew Princess and focus more on Marvel and Lucasfilm? Yeah. So, it takes two sides inside of that. The Disney Princess brand are some fantastic brands, really big inside of girls and dolls. I think we had assumptions that we could grow that faster than we could, and maybe drive costs that were better than what we ultimately were able to drive at the volume we were able to create. And it wasn't a profitable business for us. So while we lost quite a bit of top line, it's probably the loss of Disney Princesses for us is probably the equivalent of 4%, maybe 5% of our annual POS. It's actually profit positive for us as a company. On the flip side, action figures, we're the number one action figure company in the world and have been. We invented the category back with G.I. Joe back in the 1960s, and I think we continue to be a great innovator there. Disney has been, whether it's Lucasfilm before Disney or Disney since they acquired Lucasfilm and Marvel, they're our number one partner inside of that portfolio. Mm-hmm. We've been driving a fantastic business that I think has been mutually profitable for us and mutually profitable for them. We've recently been expanding that partnership into additional game spaces, whether it's board games and new categories like preschool. So, we did Spidey and His Amazing Friends last year, which was one of the top two new growth drivers inside of preschool, and this year we're pretty pumped about Star Wars: Young Jedi Adventures. Helpful. I wanna make sure we get to the sale of eOne, and then also some questions on margins and leverage as well. But on your second quarter call, you had announced the agreement to sell the film and TV portion of eOne to Lionsgate for approximately $500 million. Chris, could you maybe just talk about the rationale for selling that part of eOne? And then, for the business that's remaining, I'm most curious in the vision for how that business is going to be run within Hasbro and the ultimate goal of those assets that remain. Yeah, I mean, I think I'll echo a prior comment, which is, I'm, I'm a passionate believer in the power of games and, more generally, the power of play to build relationships with consumers. I think that's been the secret sauce of Hasbro for the 100 years that we've existed, and I think it's gonna be the secret sauce for the next 100 years of our success... You know, eOne brought a lot of assets to the table, but after three years of integrating them, less than 5% of our efforts inside of the film and TV division were around driving Hasbro brands. That category had quite a bit of margin contraction with the accelerated shift to streaming and more proprietary distribution, and kind of the decline of theatrical, particularly for mid-size and kind of long-tail films that eOne tended to specialize in. W hile it's painful to have to make a decision to divest something, 'cause it's disruptive to the employees and, requires some different communication to your investors, it was absolutely the right thing to do. I think it's the right thing for that team. Lionsgate's, much more of a natural fit for them, in terms of their distribution prowess and management capability, and I think it's the right fit for Hasbro. It frees up a lot of management focus. I think it frees up some cash for us, and I think just from an investor perspective, makes us a much easier to understand business in terms of what our value proposition is. And the follow-on corollary to that, naturally a more profitable business on a margin basis as well. Gina, on margins- Mm-hmm. You mentioned earlier the opportunity for margins to inflect in the back half of the year. Yeah. You're calling for 20-50 basis points of margin expansion for the year as a whole. Could you maybe walk us through in a little bit more details some of the drivers of the back half inflection, and then as we think out- Mm. over a longer term Mm-hmm ... what are the key puts and takes and key opportunities investors should keep in mind about margin progression post-2023? Sure. Okay, good question. Yeah, as we think about the back half specifically, it really comes down to two things. The first is that our supply chain productivity and cost savings is gonna more than offset the inflation, in some areas within the supply chain, the deflation. So that, that is a positive margin contributor to, for us. The second piece of it is just the mix benefit that we get as, as games continues to grow, and, and we talked about it a little bit in, in our Q2 call, where Q2 Magic was down year-over-year. Like, that trend is all about the timing and the phasing of when the releases were coming. So the back half, there's a nice mix benefit that we pick up as a result of just the kind of where, where the revenue is gonna flow. As we go into 2024 and you think about margin acceleration, it's some of the same pieces, so mix is a positive. We do anticipate that the cost savings initiatives that we put in place, both within the supply chain and within operating expense, are gonna more than offset inflation. So whether it's inflation within the supply chain or inflation within our people cost, the cost savings will more than offset that. On the overall operating expenses side, we've seen, again, some favorability this year, but most of that is gonna happen in 2024 and 2025 as we really start shifting the model of how we're working, that cost savings will start to flow next year and the following. Yep. That's helpful. Well, one of the other key debates we're having on margin at the moment is the consumer product segment has historically lagged- Yeah ... what we've seen from peers. Just curious, your updated take. Is there a structural reason why that should persist, or is there an opportunity for- No. ... maybe that's more to market, closer to what we see in the broader- Sorry, was that too soon? Was that too quick of an answer? No, we collectively agree that the margin profile for CP has lagged. It's down. It shouldn't be. In fact, I kinda teased with a group that we talked with earlier. When I was interviewing with Chris, I asked him, like, "Why are, why is the margin on a CP business, why is it so low?" So I think structurally, a lot of the overhead for the company sat within toy. And so you have both the kind of corporate overhead, I mean, think about it, Wizards really was operating in its own kind of siloed structure and running its business kinda soup to nuts on its own, and then you had the toy business. You have the corporate overhead, plus then you had all of the infrastructure in place to run toys, which was a pretty siloed and fragmented infrastructure. Chris has fixed much of that before I got here, of, like, rejiggering how the company was gonna run, but that will take, that will take cost out. Then, as we continue to focus on just the profitability of the business and the efficiency of the operation, the toy operation specifically, we took our eye off the ball. As we moved into this asset-light model as a company, we really kinda took kinda our foot off the gas in working with manufacturing and making sure that cost was staying low. That is now a renewed area of focus for us. So as we think about toy, profitability needs to improve. That is kinda job one for that business, and it's essential for us to get back to growth there. We have to improve the profitability. Yeah, I would just summarize, as when you think about Hasbro, our entertainment is about right-sizing it, our games are about fueling that very high profit flame, and toy, it's about driving out costs, driving up share, and then driving growth. And that'll be kind of the next 36 months. Great place to end. Chris, Gina, thank you. Yeah, thank you. Stephen, thank you so much for having us. Thank you.