Hasbro Q1 2025 Earnings Report

Hasbro EPS Results

• Actual EPS: $1.04
• Consensus EPS: $0.67
• Beat/Miss: Beat by +$0.37
• One Year Ago EPS: $0.61

Hasbro Revenue Results

• Actual Revenue: $887.10 million
• Expected Revenue: $770.60 million
• Beat/Miss: Beat by +$116.50 million
• YoY Revenue Growth: +17.10%

Hasbro Announcement Details

• Quarter: Q1 2025
• Date: 4/24/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, April 24, 2025
• Conference Call Time: 8:30AM ET

Hasbro (NASDAQ:HAS), together with its subsidiaries, operates as a toy and game company in the United States, Europe, Canada, Mexico, Latin America, Australia, China, and Hong Kong. The company operates through Consumer Products; Wizards of the Coast and Digital Gaming; Entertainment; and Corporate and Other segments. The Consumer Products segment engages in the sourcing, marketing, and sale of toy and game products. This segment also promotes its brands through the out-licensing of trademarks, characters, and other brand and intellectual property rights to third parties through the sale of branded consumer products, such as toys and apparel. Its toys and games include action figures, arts and crafts and creative play products, dolls, play sets, preschool toys, plush products, sports action blasters and accessories, vehicles and toy-related specialty products, games, and other consumer products; and licensed products, such as apparel, publishing products, home goods and electronics, and toy products. The Wizards of the Coast and Digital Gaming segment engages in the promotion of its brands through the development of trading cards, role-playing, and digital game experiences based on Hasbro and Wizards of the Coast games. The Entertainment segment engages in the development, production, and sale of entertainment content, including film, television, children's programming, digital content, and live entertainment. The company sells its products to retailers, distributors, wholesalers, discount stores, specialty hobby stores, drug stores, mail order houses, catalog stores, department stores, and other traditional retailers, as well as e-commerce retailers; and directly to customers through its e-commerce websites under the MAGIC: THE GATHERING, Hasbro Gaming, PLAY-DOH, NERF, TRANSFORMERS, DUNGEONS & DRAGONS, PEPPA PIG, and other brand names. Hasbro, Inc. was founded in 1923 and is headquartered in Pawtucket, Rhode Island.

Hasbro Q1 2025 Earnings Call Transcript

Presentation

[Operator]

Good morning, and welcome to the Hasbro First Quarter twenty twenty five Earnings Conference Call. At this time, all parties will be in a listen only mode. Today's conference call is being recorded. If you have any objections, you may disconnect at this time. At this time, I'd like to turn the call over to Kristin Levy, Hasbro Investor Relations.

[Operator]

Please go ahead.

[Kristen Levy, Senior IR Manager at Hasbro]

Thank you, and good morning, everyone. Joining me today are Chris Cox, Hasbro's Chief Executive Officer and Gina Gether, Hasbro's Chief Financial Officer and Chief Operating Officer. Today's call will begin with Chris and Gina providing commentary on the company's performance, and then we'll plan to take your questions. Our earnings release and presentation slides for today's call are posted on our investor website. The press release and presentation include information regarding non GAAP adjustments and non GAAP financial measures.

[Kristen Levy, Senior IR Manager at Hasbro]

Our call today will discuss certain adjusted measures, which exclude these non GAAP adjustments. A reconciliation of GAAP to non GAAP measures is included in the press release and presentation. Please note that whenever we discuss earnings per share or EPS, we are referring to earnings per diluted share. Before we begin, I would like to remind you that during this call and the question and answer session that follows, members of Hasbro management may make forward looking statements concerning management's expectations, goals, objectives and similar matters. There are many factors that could cause actual results or events to differ materially from the anticipated results or other expectations expressed in these forward looking statements.

[Kristen Levy, Senior IR Manager at Hasbro]

These factors include those set forth in our annual report on Form 10 ks, our most recent 10 Q, in today's press release and in our other public disclosures. We undertake no obligation to update any forward looking statements made today to reflect events or circumstances occurring after the date of this call. I'd now like to introduce Chris Cox. Chris?

[Chris Cocks, CEO & Director at Hasbro]

Thanks, Fred, and good morning. Q1 delivered another clear proof point of our playing to win strategy at work. Play focused, partner scaled, and performing. Revenue rose 17% led by a surging magic business and continued strength in licensing. Wizards was up 46%.

[Chris Cocks, CEO & Director at Hasbro]

Consumer Products was down 4%, driven by quarterly phasing due to a later Easter, but still ahead of plan. Both segments beat expectations. Adjusted operating profit jumped 50%, a result of favorable mix and the cost discipline embedded in our transformation program. Our games portfolio, an industry leading licensing business, remains standout performers high growth, high margin, and structurally resilient due to lower exposure to international sourcing. On tariffs, we acknowledge the challenge posed by the current global trade environment.

[Chris Cocks, CEO & Director at Hasbro]

While no company is insulated, Hasbro is well positioned. Our U. S. Games business benefits from largely digital or domestic sourcing, maintaining low COGS and healthy margins. We make many of our board games just up the road in East Longmeadow, Massachusetts, not far away from where Milton Bradley printed his first board games in the 1860s.

[Chris Cocks, CEO & Director at Hasbro]

Wizards has low tariff exposure with sub-ten million dollars in expected duty for the year. Most of our domestic supply is produced in North Carolina and Texas, with the balance from Kyoto, Japan. Our licensing business is primarily digital or minimum guarantee based with manageable partner exposure. While our toys segment faces higher exposure, we're responding proactively. Our asset light sourcing model means we can rapidly shift production to help mitigate tariff impacts.

[Chris Cocks, CEO & Director at Hasbro]

We're accelerating our $1,000,000,000 cost savings plan to offset tariff pressures internally. While targeted pricing actions remain likely, we are prioritizing key price points and strengthening retail partnerships. We will work to capture market share and shelf space through our growth and optimized brands at critical consumer friendly price points, particularly $999 and $19.99 dollars We want the hundreds of millions of families and fans we serve each year to keep experiencing unbeatable value at the shelf, whether it's an all new home playset for Peppa Pig and her growing family, a play booster for Magic's Final Fantasy Universes Beyond collaboration, or a hot new action figure for Marvel's upcoming Fantastic Four movie. We're also thinking long term as we play to win, especially with partners, a superpower of Hasbro's. This week, we announced the extension of our multi decade licensing agreement with Disney Consumer Products for Marvel and Star Wars with enhanced category rights in preschool, PLAY DOH, action, and role play.

[Chris Cocks, CEO & Director at Hasbro]

Combined with the Marvel agreement for Match of the Gathering, our collaboration with one of the world's most valuable brand portfolios has never been stronger. Expect more announcements of new partnerships with leading brands across toys, games and video games aimed at all demographics, further solidifying our position for long term success. Looking ahead, while we remain hopeful for a more predictable and favorable U. S. Trade policy environment, we must acknowledge the costs imposed by current tariffs.

[Chris Cocks, CEO & Director at Hasbro]

Even with Hasbro's relative strength and flexibility, logistics are becoming more complex and changes in receivables and shipping dynamics present a challenge. Ultimately, tariffs translate into higher consumer prices, potential job losses as we adjust to absorb increased costs and reduced profits for our shareholders. Our guidance is unchanged, supported by our robust games and licensing businesses and our strategic flexibility, but prolonged tariff conditions create structural costs and heightened market unpredictability. Hasbro produces a substantial amount of product in The U. S.

[Chris Cocks, CEO & Director at Hasbro]

And around the world, has served as an engine of local jobs, creativity, and innovation for over one hundred years and licenses to hundreds of American companies employing tens of thousands of American workers across toys, games, entertainment, experiences, and more. As such, we fully endorse the toy association's advocacy for zero tariffs on toys and games globally, either on US exports or on imports. Other toy associations around the world are quickly joining the advocacy efforts. We believe there should be free and fair trade for toys, an industry critical not only to hundreds of thousands of American jobs, but also to the joy and developmental well-being of millions of children, families, and fans across The U. S.

[Chris Cocks, CEO & Director at Hasbro]

And worldwide. Before handing it over, let me extend my sincere thanks to our team and partners. Our strong performance amid challenging conditions can be directly attributed to your dedication, agility, and shared ambition. In an unpredictable environment, our greatest assets remain our people and our valued partners. They are what truly enable us to play to win.

[Chris Cocks, CEO & Director at Hasbro]

Now, over to Gina.

[Gina Goetter, CFO & COO at Hasbro]

Thanks, Chris, and good morning, everyone. We are off to a strong start in 2025, delivering growth across revenue, profit and operating margin, while continuing to execute on our strategic priorities. Our Q1 performance reflects early traction from our Playing to Win strategy, ongoing transformation initiatives and a continued focus on cost discipline and profitable growth. Net revenue in the first quarter was $887,000,000 up 17% versus prior year, driven by growth in MAGIC and MONOPOLY GO. Adjusted operating profit increased 50% to $222,000,000 reflecting a 25.1% adjusted margin, a 5.5 improvement over last year due to the favorable business mix.

[Gina Goetter, CFO & COO at Hasbro]

Adjusted earnings per diluted share rose 70% to $1.04 driven by top line growth, margin expansion and broader expense management. From a segment perspective, Wizards of the Coast and Digital Gaming once again led the charge. Segment revenue grew 46% to $462,000,000 with growth across both Magic tabletop and digital licensing. Magic delivered a strong quarter with revenue up 45%, driven by healthy demand for recent releases and ongoing engagement in backlist content. The strong performance in Q1 reinforces our confidence in the momentum and stickiness of the business across our core consumers.

[Gina Goetter, CFO & COO at Hasbro]

Our licensed digital gaming portfolio grew 56% in Q1, driven by MONOPOLY GO lapping the minimum guarantee for the final quarter. This game is now celebrating its second anniversary and has announced the next third party IP collaboration with Lucasfilms and Star Wars launching in the game on May 1. Operating margin in Wizards reached 49.8%, up 11 points year over year, driven by mix and leverage from top line growth. Consumer Products revenue declined 4% to $398,000,000 finishing slightly better than our original expectations behind strength in licensing. Importantly, the segment's adjusted operating loss of $31,000,000 improved 18% versus last year and adjusted operating margin improved 140 basis points, reflecting progress in our cost transformation and lower promotional activity.

[Gina Goetter, CFO & COO at Hasbro]

Through the first quarter, we saw minimal impact from tariffs across our cost structure or customer order patterns. The Entertainment segment declined modestly, with revenue down 5% to $27,000,000 primarily due to deal timing. Segment adjusted operating profit held flat year over year at $17,000,000 Across total Hasbro, we continue to unlock savings from our transformation. Total adjusted EBITDA was $274,000,000 up 59% versus the prior year, with margin expansion supported by $22,000,000 of gross cost savings from our operational excellence initiatives. On the cash side, we generated $138,000,000 in operating cash, funded $52,000,000 in strategic investments and returned $98,000,000 to shareholders via our dividend.

[Gina Goetter, CFO & COO at Hasbro]

We also paid down $50,000,000 in long term debt, keeping us on track to meet our gross leverage target of 2.5 times by 2026. As we look at the remainder of the year, we're encouraged by the strength of our Q1 results and the early execution of our strategic priorities. That said, we're operating in a dynamic macro environment. The expanded rate on imports from China and potential reciprocal tariffs and other toy manufacturing hubs, including Vietnam and India, is creating volatility and introducing a range of scenarios for how the year could unfold. To stay ahead of this uncertainty, we're making targeted operational pivots.

[Gina Goetter, CFO & COO at Hasbro]

We're further rationalizing our SKU portfolio to prioritize velocity and margin, reassessing our logistics routes and manufacturing to reduce exposure and accelerating efforts to diversify our sourcing footprint. Today, roughly 50% of our U. S. Toy and game volume originates from China, and we're accelerating plans to bring that down meaningfully starting this year. China will continue to be a major manufacturing hub for us globally, in large part due to specialized capabilities developed over decades.

[Gina Goetter, CFO & COO at Hasbro]

In parallel, we're partnering closely with our customers to manage inventory flows and work through a range of pricing strategies tailored to different trade outcomes and protect key price points. These actions ensure we remain agile and margin focused even as the external conditions evolve. With that context, let's turn to our 2025 total company outlook. We are pulling a lot of levers and making a number of puts and takes in our assumptions. The net is we are keeping full company guidance unchanged.

[Gina Goetter, CFO & COO at Hasbro]

While we are dealing with a wide range of potential tariffs, retailer and consumer outcomes, our games business and our strategic flexibility gives us options. I'd like to spend a couple of minutes to unpack how we are modeling the cost of tariffs, impacts the toy category, both in terms of retailer ordering and consumer takeaway, and provide more color on our supply chain and pricing direction. Our forecast assumes various scenarios for China tariffs ranging from 50% to the rate holding at one hundred and forty five percent and ten percent for the rest of world. This translates to an estimated $100,000,000 to $300,000,000 gross impact across the enterprise in 2025 before any mitigation. As I mentioned, our team has moved quickly to offset activating a range of levers, including sourcing optimization and diversification, coordination with retail partners on SKU assortment and promotion activity and readying targeted pricing actions.

[Gina Goetter, CFO & COO at Hasbro]

We've also modeled multiple scenarios around how the tariffs could impact our consumer products revenue, anchoring our assumptions to prior significant events, including the 02/2008 and 02/2009 Great Recession and COVID. Factoring in all the mitigating levers, we estimate that the net profit impact in 2025 to be between 60,000,000 to $180,000,000 The range in outcomes is dependent on final trade policy, customer order patterns and consumer behavior. Turning to the Wizard segment. Given the broad based strength in the Q1 results, we are raising our full year outlook and now expect revenue to grow mid to high teens with a low 40s operating margin. This increase is driven by strong demand signals we're seeing across upcoming Universes Beyond releases, including Final Fantasy, Spider Man and The Last Airbender.

[Gina Goetter, CFO & COO at Hasbro]

These sets are generating early excitement across both core and new fan segments, reinforcing the strength of our multi franchise strategy. As we scale these temple releases, it's important to note that we will begin to accumulate higher royalty expenses starting in Q2. This is fully contemplated in our outlook and consistent with the broader strategy to grow high margin franchise led revenue across our portfolio and attract new and lapsed fans. The momentum in Wizards provides a strategic buffer as we navigate broader cost pressures in consumer products. At this stage, we don't have sufficient clarity to credibly adjust our full year consumer products guidance.

[Gina Goetter, CFO & COO at Hasbro]

The range of potential outcomes tied to the evolving tariff environment remains wide, and we are continuing to assess the implications in real time. Until we see greater certainty on the scope and timing of these trade measures and how they could influence customer order patterns and consumer behavior, we believe it is prudent to leave our outlook unchanged while actively managing the levers within our control. As part of this, we're accelerating elements of our cost savings program, now targeting 175,000,000 to $225,000,000 in gross savings this year as we look for additional profit offsets. Despite macro uncertainty, a combination of CP mitigation, Wizzard's outperformance and accelerated cost savings gives us a line of sight to delivering on our full year financial commitments. Our capital allocation priorities for the year are unchanged.

[Gina Goetter, CFO & COO at Hasbro]

We continue to invest behind the core growth engines of the business, namely Magic and digital games, while maintaining discipline and flexibility in an evolving macro environment. In light of current trade uncertainty, we are placing even greater emphasis on balance sheet health and liquidity. We remain committed to our long term leverage targets and are taking a balanced approach to returning capital and prioritizing debt reduction. We have kept our Q2 dividend unchanged. To wrap up, as we move through the rest of 2025, we're executing with focus, scaling our high margin growth engines, actively managing volatility and accelerating cost transformation.

[Gina Goetter, CFO & COO at Hasbro]

Our Q1 performance affirms the durability and advantage of our diversified model and gives us line of sight to delivering full year commitments even in a dynamic environment. We remain disciplined in capital deployment, responsive to external risks and confident in our ability to create value across the balance of the year. We'll now turn it back to the operator to take your questions.

[Operator]

We'll now be conducting a question and answer session. You would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

[Operator]

In the interest of time, we ask that participants limit themselves to one question and one follow-up. One moment please while we poll for questions. Thank you. Our first question is from Christopher Horvers with JPMorgan. Please proceed with your question.

[Christian Carlino, Equity Research Associate at J.P. Morgan]

Hi, good morning. It's Christian Carlino on for Chris. Appreciate the color on how you're thinking about tariffs. But just given the consumers felt so much inflation over the past couple of years, could talk through the different scenarios you're thinking about in the event the 145% on China holds and how toy spend is impacted relative to the broader impact on the consumer's wallet?

[Chris Cocks, CEO & Director at Hasbro]

Sure. Good morning, Christian. Before I answer the question, in case there was any doubt, we kicked off the call with Fred Whiteman, our new VP of Investor Relations. It wasn't Kristen Levy with a serious cold.

[Gina Goetter, CFO & COO at Hasbro]

So, is still here.

[Chris Cocks, CEO & Director at Hasbro]

Yes, Kristen is still here. Kristen is still in the room. So, we've looked at a variety of scenarios. And I would say we have a pretty cautious outlook in terms of what the impacts of the current tariff regime would have. Basically, see the impact to consumer spending on the toy category consistent with what happened with the 02/2008, '2 thousand and '9 recession.

[Chris Cocks, CEO & Director at Hasbro]

The toy category was down roughly mid single digits. Hasbro fared a bit better at that time based on entertainment roadmaps and innovation that we had as well as Wizards of the Coast. And then in terms of what we think the inflationary outlook looks like in terms of prices in the category, we went back to 2020 and 2021 with the early days of COVID. So we basically see a combination of inflation and some recessionary pressures on the macro. That said, we think the toy category early in 2025 and we think this will extend throughout the year, we'll kind of reassert its traditional focus on resiliency or its traditional position of resiliency.

[Chris Cocks, CEO & Director at Hasbro]

It tends to be a category of small luxuries. It tends to be a category, which is heavily gift oriented. And so we think it's going to fare better than other discretionary categories or other experience categories. So that's kind of the puts and the takes we have. Obviously, if tariffs change, that outlook will change.

[Chris Cocks, CEO & Director at Hasbro]

But right now, that's our basis at 145% with China and 10% everywhere else.

[Christian Carlino, Equity Research Associate at J.P. Morgan]

Got it. That's really helpful. Could you talk to what are your conversations with retailers like? There's media reports about some big players canceling orders from China, but it sounds like you're not seeing that. And could you maybe talk about how much of this pressure is being absorbed by maybe the third party manufacturers versus the retailers?

[Christian Carlino, Equity Research Associate at J.P. Morgan]

And are you seeing retailers go to more direct imports to negotiate direct with the manufacturers? Just any color there on how the impact is being shared across the supply chain? Thanks.

[Gina Goetter, CFO & COO at Hasbro]

Got it. Good morning, Christian. Our conversations with the retailers are pretty fluid. For as many curveballs that are being thrown at us, the same kind of curveballs are being thrown to them. And everyone is taking a slightly different approach with how they're managing their inventory and their order pattern.

[Gina Goetter, CFO & COO at Hasbro]

So we haven't seen on the big three, we're not seeing a ton of canceled orders and different thinking of how they're going to approach the holiday. But we are having very active discussions on how we're managing inventory as we move through, say, this Q2 period and then Q3, which is when you tend to see the resets start to happen ahead of the holiday season. So nothing hugely material in terms of orders being canceled or seeing instances as you said in your or asked in your question of them going directly to the manufacturer. But we are seeing some shifts in how we're thinking about the phasing throughout the year.

[Chris Cocks, CEO & Director at Hasbro]

Yes. Just to add a little bit more color. I would say our first principle in all of this is don't overreact. And I think our retail partners have appreciated that perspective. Now, Hasbro is able to come from a privileged perspective on that, somewhere around 45% to 50% of our U.

[Chris Cocks, CEO & Director at Hasbro]

S. Sales are either domestically sourced or based on digital or licensing from domestic companies. So that gives us a little bit more buffer than the typical toy company, which is 80% plus of their volume comes from China and most of it the rest from Southeast Asia. So, in terms of our discussions with retailers, we're talking a lot about, okay, how can we keep prices as consistent as possible for consumers, especially for items that we think will be fantastic gifts that kids will be asking for and moms and dads and aunts and uncles will want to give. That said, we are having discussions around pricing more broadly.

[Chris Cocks, CEO & Director at Hasbro]

At this level of tariffs, I don't think you can avoid it. But generally speaking, I think it's a set of discussions in the spirit of partnership. The one thing I'll add to a little bit on what Gina said is, we are seeing a change from direct import to domestic and that will change the nature of the timing of when our orders will be fulfilled. I think Q2 is pretty dynamic, but I definitely think Q2 will be impacted on direct import. Now that said, we might be able to compensate for it on domestic.

[Chris Cocks, CEO & Director at Hasbro]

We'll probably have to give you guys some updates as the quarter goes on future conferences.

[Gina Goetter, CFO & COO at Hasbro]

How about this for the longest answer ever to this question? I'm going to add one more point to Chris' comment. The other strength or opportunity that we have with our retailers, the discussions that we're having, we're anticipating some shelf opportunities and stepping into some white space. So again, with the health of our inventory, with the health of our supply chain and how diversified we are, we're also using this opportunity to partner with all of our retailers to step into some new opportunities as well. So we're trying to play both defense and offense at the same time.

[Christian Carlino, Equity Research Associate at J.P. Morgan]

Super helpful. Thank you very much. Best of luck.

[Operator]

Our next question is from Megan Klap with Morgan Stanley.

[Megan Clapp, Executive Director at Morgan Stanley]

Hey, good morning. Thanks so much. My first question is just a bit more of a clarification, and then I have a follow-up on Wizzards. So the clarifying question is, Chris, I think you said something or I know you said something in your prepared remarks just about prolonged the potential for prolonged tariffs creating structural costs and uncertainty. And I wanted to just clarify, is that meant to say that the exposure or the kind of the headwind that Gina talked about this year, could that get worse

[Megan Clapp, Executive Director at Morgan Stanley]

Is that what you were meaning to imply from a cost perspective? Obviously, you'll have to lap through it as it rolls into 2026 given inventory. But I just wanted to maybe if you could expand upon what exactly that comment meant.

[Chris Cocks, CEO & Director at Hasbro]

Yes. Well, I think it's two things. I think the first thing, you're correct in that, right now, we're able to basically defer paying a bunch of tariffs because for the first four or five months of the year, we're not having a large number of deliveries. So there will be incremental tariff exposure that you'd have next year if the current duties continued. That would be a headwind.

[Chris Cocks, CEO & Director at Hasbro]

The second thing is by moving things around in our supply chain, we have a lot of flexibility like by the end of this year, hundreds of SKUs will be for The U. S. Will be moved from China based manufacturing to alternate locations. And I think we're going to meaningfully accelerate our diversification efforts in terms of where we can source product from. Right now, we source it from eight countries that's probably going to expand to nine to 10 in the very near term.

[Chris Cocks, CEO & Director at Hasbro]

And think you're going to meaningfully see a big difference in terms of the percentage of product coming from China to The U. S. Much faster than what we previously communicated. Some of that though comes with a cost. When we manufacture board games in The U.

[Chris Cocks, CEO & Director at Hasbro]

S, it is significantly more expensive to manufacture here than it is in China for instance. If we move products like sourcing for Play Doh from China, which is where it's dominantly sourced from The U. S. Today to Turkey, which we've been using to source to Europe. There is a cost associated with that because the logistics in Turkey are just kind of different.

[Chris Cocks, CEO & Director at Hasbro]

And we were looking at that across multiple product lines. We feel like over time, we'll be able to manage the bulk of that and we'll be able to make these changes on a cost neutral basis. But at least in the midterm, that increased complexity and that increased load on new logistics centers will have some costs associated with our outlook.

[Gina Goetter, CFO & COO at Hasbro]

Yes. Megan, as you think about the phasing of that gross impact that I had in my prepared remarks of 100,000,000 to $300,000,000 that is really all in the back half. So just as you think about what that is going to mean for 2026, the absolute kind of annualized number goes up. Now to Chris' point, all of the work that we have to diversify our supply chain and move kind of move product around, that will help to mitigate probably the bigger number that you would calculate. But that's why kind of as you think this year's impact versus next year's impact, there's still a material cost headwind coming at us.

[Megan Clapp, Executive Director at Morgan Stanley]

Okay. That's really helpful. Makes a lot of sense. And then just a follow-up on Wizard. So really strong performance in MAGIC, in particular, in 1Q.

[Megan Clapp, Executive Director at Morgan Stanley]

It sounds like you're raising the guide both for the 1Q outperformance versus your expectations as well as some better expectations for the remainder of the year. Is there any way to kind of parse out what is being raised for 1Q versus the rest of the year? And related to that, you're incorporating some additional, it seems like conservatism just around the consumer into CP. Are you doing the same in Wizards?

[Chris Cocks, CEO & Director at Hasbro]

Well, we'll tag team this between Gina and I.

[Gina Goetter, CFO & COO at Hasbro]

Tag team mode today.

[Chris Cocks, CEO & Director at Hasbro]

Yes. I'd say Wizards had meaningful outperformance in Q1. We also think it's going to do pretty darn well in Q2. Just to give some color on that, Final Fantasy will be the best selling set of all time on day one. It already is.

[Chris Cocks, CEO & Director at Hasbro]

And so then it will have room to run-in Q3 and Q4. And we feel really good about the back half releases as well, particularly the new Universe is beyond sets. As we look at Wizards, our store count is up 20% versus what it was 18 months It's very clear to us that Universes Beyond as a strategy has increased the total active installed base of MAGIC players both in terms of reigniting lapsed fans as well as bringing in new fans. And just historically MAGIC has been very economically macro resilient. In 02/2008, '2 thousand and '9, it was growing double digits.

[Chris Cocks, CEO & Director at Hasbro]

It's a passion based game that's not really tied and the collectors aren't really tied to the S and P 500 or the performance thereof. So we feel pretty good about where Wizards is sitting and pretty confident in guidance raise for it.

[Gina Goetter, CFO & COO at Hasbro]

So if you think about then the phasing of the year, remember back in February, we said that Q1 and Q4 for Wizards were going to be the strongest growth quarters. And we continue to believe that. As you look at the ones though sandwiched in the middle of Q2 and Q3, they're stronger. Q2 is going to look a little bit goofy because of some of the comps. So we are expecting Q2 revenue to be down in Q2.

[Gina Goetter, CFO & COO at Hasbro]

Magic will be up. It will be a healthy Magic growth business, but we're comping one to a lesser extent the difference in Baldur's Gate and MONOPOLY GO this year versus last year. But then also remember to a bigger extent we had a favorable licensing settlement last year that benefited revenue that we're lapping. So when we come to Q2, you'll see probably low single digit declines in revenue. And then from a margin standpoint, still very healthy, but you'll see that big step up in royalty expense as we launch Universus Beyond.

[Gina Goetter, CFO & COO at Hasbro]

So I think the way that most models have been set with that growth Q1, Q4, that's the right way to think about it. And the middle two quarters got a little bit better, but there's a little bit of bumpiness just given comps.

[Megan Clapp, Executive Director at Morgan Stanley]

Okay. Super helpful. Thank you.

[Gina Goetter, CFO & COO at Hasbro]

Thanks, Megan.

[Operator]

Our next question is from James Hardiman with Citi.

[James Hardiman, Director - Leisure and Travel Analyst at Citi]

Hey, good morning. Thanks for taking my question. So wanted to dig in a little bit. I think Chris, you talked about the conservative nature of the guide. And I guess specifically, I think it's slide 16, the bridge slide.

[James Hardiman, Director - Leisure and Travel Analyst at Citi]

And I love a good bridge.

[Gina Goetter, CFO & COO at Hasbro]

I love a good bridge slide. Everyone loves a good bridge slide. Everybody loves a

[James Hardiman, Director - Leisure and Travel Analyst at Citi]

good bridge. So

[James Hardiman, Director - Leisure and Travel Analyst at Citi]

I want to make sure we're all capturing all the information that's in that slide. I think what this would suggest is that you're factoring in the full brunt of the 145% and anything less than that would ultimately have led to a higher adjusted EBITDA guide versus where you previously were? And then I think there were also some comments about sort of the industry assumptions in the prepared remarks. Guess, the second part of the question would be, I mean, GFC level industry declines and COVID level inflation, is that also sort of what's built into this unchanged EBITDA guide? And if we get anything better than that, would that also ultimately be upside to the number?

[Gina Goetter, CFO & COO at Hasbro]

Yes. Do want to start?

[Chris Cocks, CEO & Director at Hasbro]

Good morning, James. I just want to clarify my quote because on advice of counsel, you'll never hear me say conservative on a call and I always say cautious. So but I'm going to let Gina take this one.

[Gina Goetter, CFO & COO at Hasbro]

Good clarification. So good questions. I think your synopsis is generally right. So and when you look at the waterfall chart on Page 16, what is embedded in that red bar is that higher tariff rate of 145% and an assumption that the retail sales follow similar trends to what we saw in 02/2008 and 02/2009. Like the overall kind of macro was down, call it, 6% to 8%, and that's what we have factored in to our outlook for that kind of worst case scenario.

[Gina Goetter, CFO & COO at Hasbro]

Now to your point, if we weren't on the worst case and we go to the other side, would our guide be up? Yes, probably. However, one of the muscles that we're flexing is we're pulling in and accelerating a lot of the cost savings pipeline initiatives that we had in motion. So there could be if it starts to mitigate some, you might see us slow down or rethink the pacing of some of those. But by and large, I mean, the strength of Wizards and the momentum that we have there in and of itself would have probably taken us over if that red bar wasn't there.

[James Hardiman, Director - Leisure and Travel Analyst at Citi]

Got it. That all makes a ton of sense. And then maybe help us sort of handicap the risk of the rest of the world. It seems to me that at least one of the incremental surprises coming out of Liberation Day was the heavy handed nature on the rest of the world, right, outside of China. And so much of your diversification strategy has been to move out of China into some of these other countries that are now being tariffed to a certain degree, at least that 10% number.

[James Hardiman, Director - Leisure and Travel Analyst at Citi]

And who knows what's ultimately going to happen in July. But maybe help us understand the CP exposure to the rest of the world, specifically those 10% tariff countries and how you think about, again, moving production out of China. A lot of these countries seem like safe havens and I don't know, how do you even make decisions in this current environment?

[Chris Cocks, CEO & Director at Hasbro]

Thanks. Well, I think that goes back to first principle just answering your last question which is don't overreact. Our assumption is that we will get to a reasonable and logical trade policy ultimately once all the negotiations are done. We're not making any kind of hopeful assumptions happens soon. Our guidance is based off of one hundred and forty five percent and ten percent reciprocal everywhere else.

[Chris Cocks, CEO & Director at Hasbro]

And we're assuming that that holds for the balance of the year. If the reciprocal tariffs increased and China did not change, that would be a headwind obviously and we would have to take that into account. In terms of how we're thinking about the rest of the world in terms of a market and not just as a supply, a source of supply, we see it as an opportunity. Our business is under indexed a bit inside of Europe. We see a lot of retailer excitement for some of the new product lines we have, the new Peppa Pig products that we have, all the great Marvel stuff that we have coming out.

[Chris Cocks, CEO & Director at Hasbro]

MAGIC certainly is looking like it's going be a winner in markets like Europe and Japan. So we see some potential for upside there, especially as we kind of prioritize where our SKUs are going and where our marketing dollars are going in terms of market upside. APAC likewise, we see some opportunities there. And then the other thing that we're doing a lot of is starting to look at ODMs in Vietnam, India and even China in terms of more value skews and getting more aggressive about real low price points and driving some breakthrough pricing opportunities for market like LatAm and Southeast Asia via our everyone plays initiative as part of play to win. So, I'd say 01/1945 and '10 is our base outlook.

[Chris Cocks, CEO & Director at Hasbro]

If that changes to the negative, it certainly is a headwind. What we don't necessarily have factored into our guide though is, hey, is there any market upside in terms of shifting SKUs and shifting our marketing priorities. And so we'll play that out over the next couple of months.

[Gina Goetter, CFO & COO at Hasbro]

Yes. With our team, we're really trying to avoid the analysis paralysis and the churn that that can cause on decision making. So we're staying very focused on what is known. And right now what is known is the 145,000,000 and the $10,000,000 All of the moves that we're making both within our supply chain as well as with our customer base, we would categorize as no regret moves. Like it's good for us to have a more diversified footprint, we'll just keep moving down that path.

[James Hardiman, Director - Leisure and Travel Analyst at Citi]

Got it. That's really helpful. Thanks, Chris. Thanks, Gina.

[Gina Goetter, CFO & COO at Hasbro]

Thank you.

[Chris Cocks, CEO & Director at Hasbro]

Thanks.

[Operator]

Our next question is from Arpine Kocharyan with UBS. Please proceed with your question.

[Arpine Kocharian, Executive Director at UBS Group]

Hi. Thanks for taking my question, and thanks for all the detail you already provided. Sorry to go back to the tariff sensitivity slide, but could you maybe clarify, is it fair to assume that those mitigating efforts will include bringing China exposure for consumer products below substantially below the 50% mark? I think you had given 40% exposure for China for 2026 before. I guess, do you have a sense of where that could be for next year as of today to the extent you can predict that?

[Arpine Kocharian, Executive Director at UBS Group]

And then in terms of other mitigating factors, you know, whether it's cost saves, you know, to find ways to make things cheaper or taking pricing, Is it possible for you to detail sort of assumptions there? Let's say making things cheaper could offset x percent of impact and then pricing will offset the rest to the extent it's possible to quantify? I know it's very difficult at this point. You're probably looking at 1,000 factors.

[Gina Goetter, CFO & COO at Hasbro]

1,000 factors, that's probably right. Good questions and good morning. I'll start by saying first, we are a global company. China is going to continue to remain an important manufacturing hub for us. And while our U.

[Gina Goetter, CFO & COO at Hasbro]

S. Toy and gate business is roughly 55% of our revenue, 45% of it is okay with getting goods from China. So China is always going to be a manufacturing hub for us. As we think about our moves from the 50 to your point, we said back in February, we're on a path to move to under 40 by 2026. We are speeding that up.

[Gina Goetter, CFO & COO at Hasbro]

So we are accelerating our efforts there. It will we're targeting to be below that 40% by 2026. We are still kind of nailing down final plans and final product lines and what all this is going to mean with our with the supplier base, etcetera. So I'm not going to give you percentage now. But I think that the path we were on to get to 40 by 2026 is going to be faster than that.

[Gina Goetter, CFO & COO at Hasbro]

As you think about then the mitigating levers that we have, again, I'm not going to give you exact dollars because they're all in the way that you've laid it out, they're all kind of muddled together. But there's really if you go from that gross impact, I'll just anchor to the high end of the range of $300,000,000 kind of gross exposure down to the 180,000,000 what we're seeing is the net impact. There's really three big things to focus on. And we've talked a lot about the supply chain. That's the first big thing.

[Gina Goetter, CFO & COO at Hasbro]

And just how we're both shifting products around our existing manufacturing base, how we're managing inventory levels, how we're then kind of accelerating diversification that provides a big mitigating lever for us. The second piece is and how we're managing our product in the broader portfolio. So we have done a significant amount SKU reduction leading up our SKU kind of rationalization as we led into this year. We're continuing to evaluate what makes sense in this current environment for The U. S.

[Gina Goetter, CFO & COO at Hasbro]

Market. So some of our higher priced items or products that we just don't think are going to be tenable with from a profitability standpoint with 145 percent tariff on, we're taking different choices on. So that's kind of the next lever is that we're really focused on all of our DTV efforts and how that influences product cost, we're accelerating there. And then the third piece of mitigating actions has everything to do with customer and commercial. How we're thinking about pricing and readying the pricing actions, how we're managing our allowances with the retailers.

[Gina Goetter, CFO & COO at Hasbro]

Now all and when we talk about allowances, those are all the dollars that are sitting within gross to net, how we put those either to better use or drop them altogether. So taken together, supply chain, how we're thinking about product, how we're thinking about commercial customer pricing, that's what gets us to kind of that $120,000,000 difference between gross to net.

[Arpine Kocharian, Executive Director at UBS Group]

That's very, very helpful, Gina. Thank you. And then one quick follow-up. Have you done any price elasticity of demand work to basically say X percent of growth in pricing is x percent impact on demand. I know it's difficult, right, especially in this environment.

[Arpine Kocharian, Executive Director at UBS Group]

But anything you could share with investors to help them think through pricing as a mitigating factor?

[Chris Cocks, CEO & Director at Hasbro]

Well, we have. There's not a lot that I can share publicly since most of it's proprietary. We definitely think $9.99 and $19.99 are important. We definitely think innovation and having a toy that has a must have factor to it, something that the kid asks for and is based off of a passion based purchase is also super important. And then last but not least, having great brands backed by fantastic fan bases and big entertainment moments is also super important.

[Chris Cocks, CEO & Director at Hasbro]

And so when you look at like what we just announced with Disney, there's no bigger brands in the toy aisle than Marvel and Star Wars. We're thrilled to be extending our multi decade partnership with them. We've been working with the Disney Walt Disney Company since the 1950s. I think Snow White was and Cinderella were one of our first collaborations together. And I love their roadmap, what they have coming up in 2026 and what they just announced at their Star Wars event in Japan A Week or so ago for 2027, I think, bodes pretty favorably for what the future is for that.

[Chris Cocks, CEO & Director at Hasbro]

And that's just one partnership in a series of partnerships that you're going to be hearing from us over the next several months and quarters that we're going to be able bring the best brands to our aisles that have the highest pricing power and the surest demand. And I think that's going to position us favorably over the long term.

[Arpine Kocharian, Executive Director at UBS Group]

Thank you very much.

[Operator]

Thank you. Our next question is from Eric Handler with ROTH Capital.

[Eric Handler, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Good morning. Thanks for the question. You had pretty significant outperformance from MAGIC in the quarter, at least relative to my model. I wonder if you could sort of rank like where all that upside came from?

[Chris Cocks, CEO & Director at Hasbro]

So, think it's a couple of things. We did have a bit of an extra set or half an extra set in terms of a remastered set. Our backlist performed very, very well. And then early ordering for Tartar Dragonstorm has been very strong. So probably the biggest thing was like the backlist over performance.

[Chris Cocks, CEO & Director at Hasbro]

And then Secret Lair has actually been doing pretty well. I mean, whole Magic business is just it's difficult to identify just one thing. Really, I think what we're seeing on Magic is an expansion of the player base. And when you expand the player base, it's just a great opportunity to engage them with more products and kind of create a network effect amongst the players in the collecting community. And we see that only strengthening as the year goes.

[Eric Handler, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Thanks, Chris. And then, one question on sort of manufacturing, like how easy is it to just pick up and leave a China manufacturing plant? How much lead time do you need to sort of switch over to another country? And can you do that before peak manufacturing times for the holidays for this year? Is this more of a 2026 event?

[Gina Goetter, CFO & COO at Hasbro]

Yes, good question. Yes, I would I'll say it's more of a 2026 event. I mean, obviously, the moves and the work is happening now. And it depends on capabilities. There are some countries that have the capabilities and the infrastructure in place.

[Gina Goetter, CFO & COO at Hasbro]

So it's just a matter of kind of the development and quality engineering work that needs to happen to shift. In others, there's a brand new build of capability. So it kind of runs the spectrum in terms of the length of time. But if you kind of anchor back to what we said in February, it was going to take us a couple of years to move from that 50% down to under 40 And now we're saying, oh gosh, we're going to get there a lot sooner. So we're speeding up the time to get that diversification.

[Chris Cocks, CEO & Director at Hasbro]

And it depends on the category, Eric. So, for PLATO, it's send the boat to The U. S, don't send the boat to Italy from Turkey. And then send the boat from China to Europe. For NERF, where we have a very large India based footprint, we are able to like change production, but not necessarily where the SKUs are produced.

[Chris Cocks, CEO & Director at Hasbro]

So, we are changing what the SKU mix looks like inside of the aisle for The U. S. So that we can favor India based SKUs, which maybe are older SKUs, but are tried and true. But the benefit there is most of our competition, the white label competition and some of our other named competitors, they're solely China based. So we actually could come to market with a pricing advantage versus them.

[Chris Cocks, CEO & Director at Hasbro]

So it's category by category. I think where you're going to find China based manufacturing the stickiest is really anything with electronics, anything with super high end deco and then surprisingly anything made out of foam.

[Gina Goetter, CFO & COO at Hasbro]

Except for darts.

[Chris Cocks, CEO & Director at Hasbro]

Except for darts.

[Gina Goetter, CFO & COO at Hasbro]

Except for darts.

[Chris Cocks, CEO & Director at Hasbro]

But like foam role play, that tends to be a very specialized set of capabilities of Chinese manufacturing.

[Operator]

Thank you. Our next question is from Alex Perry with Bank of America.

[Alexander Perry, Director, Equity Research at Bank of America]

Hi, thanks for taking my questions here and congrats on a strong quarter. Good morning. Gina, I just wanted to bridge some of your comments on the segment guide. So the outlook for CP unchanged, but now factoring in bigger levels of industry declines, I think you were at sort of flat to down 4% last time in the CP top line guide. You raised the Wizard's top line guide pretty significantly.

[Alexander Perry, Director, Equity Research at Bank of America]

Op margins come up, but reiterated sort of consolidated full company guide. I guess is the puts and takes like a lower CP implied op margin offset by the higher Wizard's op profit contribution? Like I just wanted to make sure we're sort of clear on the segment puts and takes. Thanks.

[Gina Goetter, CFO & COO at Hasbro]

Yes. Good question. I mean, I think that we spelled out Wizard, that's and that should be pretty clear of we're rising both. We're rising both raising both the revenue outlook and the operating margin outlook. In terms of CP, we're leaving it unchanged just given the wide range in potential outcome here.

[Gina Goetter, CFO & COO at Hasbro]

So when you think of the net impact of 60,000,000 to $180,000,000 if it's on that higher end of the range of 180,000,000 you'll see a higher revenue loss and you'll see those operating margins to your point they're going to come down in the mid single digit range. Just as it absorbs we just can't absorb the entirety of cost impact in that margin structure. But if you go to the other end of the range, if we net out there, if the trade policy kind of starts to calm down a bit, if we don't see as much negative reaction from consumers or our customer order patterns remain steady, we end in that lower end of the range, we stay then within spitting distance of our original guide. So that's why right now we just don't have enough clarity to narrow that down any further. Hopefully, by the time we get to July, we're able to provide a bit more precision there, but it's a pretty wide guide.

[Gina Goetter, CFO & COO at Hasbro]

But I think how you said it in terms of mid single digits on CP and then you've got the wizards both the wizards upside as well as trying to accelerate all of these cost savings in the pipeline, that's what's helping to absorb it.

[Alexander Perry, Director, Equity Research at Bank of America]

Really helpful. And then just my follow-up question. I wanted to circle back on price. And what parts of the portfolio do you have the most ability to raise price? Would you ever consider price increases on parts of the portfolio that seem like they have significant momentum right now like magic or will it all be sort of concentrated in the toward portfolio where you're seeing the most tariff exposure?

[Chris Cocks, CEO & Director at Hasbro]

I think we're going to pick and choose. So pricing is ultimately going to be a discussion with our retail partners. And ultimately, what price ends up on shelf is up to them. We're going to work hard to try to figure out how to hit those magic price points for the items that we think are most exciting and or minimize any price increases associated with hot items that we think have a lot of good innovation. So, we've got a lot of cool products coming out this fall.

[Chris Cocks, CEO & Director at Hasbro]

We're refreshing the entire Peppa Pig line with the new baby on the way. We think Play Doh Barbie is the most exciting new innovation to hit the arts and crafts category potentially ever. We think that's a huge collaboration and happy to be partnering with Mattel on it. Likewise, we have a lot of opportunities across board games and games. MAGIC is really on fire.

[Chris Cocks, CEO & Director at Hasbro]

I think our default is to not pass on price wherever possible and instead to drive share and drive shelf space opportunities. That said, we are going to have to raise prices inside of 145% tariff regime with China. We're just trying to do it as selectively as possible and minimize the burden to the fans and families that we serve.

[Alexander Perry, Director, Equity Research at Bank of America]

Perfect. That's incredibly helpful. Best of luck going forward.

[Gina Goetter, CFO & COO at Hasbro]

Thanks, Alex. Have a good day.

[Operator]

Our next question is from Steven Lasix with Goldman Sachs.

[Stephen Laszczyk, Vice President at Goldman Sachs]

Hey, good morning. Thanks for taking the questions. Curious if you'd update us a little bit more on the conversations maybe you're having at this point with retailers going into holiday. I imagine most retailers are trying to stay as flexible as they can for as long as they possibly can ahead of any potential reprieve on the tariff side. Could you just remind us maybe of the timing of how that plays out throughout the year and maybe when is the last possible moment that retailers would need to make a decision around holiday orders as we head into late summer, early fall?

[Gina Goetter, CFO & COO at Hasbro]

Yes. Good morning, Stephen. Yes, the very fluid is how I would describe discussions with our retailers. And to your point, right now, in this moment where we're sitting in April, the holidays are a long ways away. So when you think about order patterns, what we are planning for, and I think Chris said it in Q and A here already this morning, we're planning for Q2 to have a pretty material shift in both kind of DI versus Dom as the retailers themselves are managing their inventories.

[Gina Goetter, CFO & COO at Hasbro]

So some of that order pattern that anticipated pattern that we've seen in Q2 does look different. As we think about the back half of the year, when we can model out our revenue, there's not a material change in terms of the back half of the year really represents about still call it 60%, sixty five % of our revenue base. We expect our inventory to then kind of be more moving out from us to our retailers to be more back half loaded into Q3 and Q4. We don't see any material change in how retailers are thinking about the holidays. But to your point, they are making decisions right now.

[Gina Goetter, CFO & COO at Hasbro]

Do I take it here in May and June? Or do I wait until we're closer to the holiday resets, which are going to happen in call it September, October. So that's how we've contemplated our phasing. That's what is all embedded in our guide in the range of outcomes. But if you think about what CP is going to look like in Q2, it's going to be a down quarter for us just given the change in the order patterns there.

[Gina Goetter, CFO & COO at Hasbro]

And then we kind of build back as we move through Q3, Q4.

[Stephen Laszczyk, Vice President at Goldman Sachs]

Thanks. That's really helpful. And then maybe one on MONOPOLY GO. It looks like revenues accelerated here in the first quarter. Curious if you could just speak a little bit more to the momentum you're seeing there, what's been working so well to keep that IP going?

[Stephen Laszczyk, Vice President at Goldman Sachs]

Then any updates to your outlook in terms of the decay you're factoring into the guidance?

[Chris Cocks, CEO & Director at Hasbro]

Well, I think first and foremost, Scopely has made game based on a fantastic brand. So, it's very sticky. They're having excellent player engagement. They're doing good events with major partners. They just announced a new one with Star Wars, which I think kicks off in a month or so.

[Chris Cocks, CEO & Director at Hasbro]

So, they've just been doing a really good job. And I think they're getting to a more mature place in terms of how much they have to spend in terms of driving new player engagement, new player adoption, which is what which was a favorable aspect of the quarter for us. I think our previous guidance of about $10,000,000 a month in terms of what we'll make is fair for the balance of the year and what we're currently modeling in our outlook.

[Stephen Laszczyk, Vice President at Goldman Sachs]

Great. Thank you both.

[Operator]

Our next question is from Jamie Katz with Morningstar.

[Jamie Katz, Analyst at Morningstar]

Hey, good morning. I just

[Jamie Katz, Analyst at Morningstar]

want to ask a quick question on POS, which was in the back of the document of the slide deck today. I guess I'm trying to triangulate the strong revenue performance with sort of weaker market share performance. And I'm wondering if maybe

[Jamie Katz, Analyst at Morningstar]

that's a

[Jamie Katz, Analyst at Morningstar]

function of just decreasing inventories or working down inventories at retailers. There's something else maybe that I'm missing?

[Chris Cocks, CEO & Director at Hasbro]

We entered the year with pretty lean inventories with our retail partners. And so there is an opportunity there would be kind of what I would say on that.

[Gina Goetter, CFO & COO at Hasbro]

Yes. Our CP performance in the first quarter was the toy part of it was pretty on our planned expectation. As Chris said, we didn't have anything crazy in terms of having a clear inventory and promotions like that because we came into the year pretty healthy. Licensing was what drove the upside on revenue in the quarter.

[Jamie Katz, Analyst at Morningstar]

Okay. And then can you

[Jamie Katz, Analyst at Morningstar]

talk a little bit about what you guys

[Jamie Katz, Analyst at Morningstar]

are seeing at value price points? I think from other consumer discretionary firms, we're just hearing incremental weakness across that consumer base? Thanks.

[Chris Cocks, CEO & Director at Hasbro]

I don't think we have any real thunderous insights to share with you right now in terms of what the consumer behavior is. Generally speaking, toys as a category did pretty well in first quarter and Easter kind of went off as expected. So I think people are continuing to buy toys. Personally, I don't think we're seeing any indication that people are pulling forward like holiday buys or summer buys. Toys tend to be a occasion based purchase or a purchase of passion and consumers are behaving normally.

[Jamie Katz, Analyst at Morningstar]

Thanks so much.

[Operator]

Our next question is from Kylie Kohe with Jefferies.

[Kylie Cohu, Consumer Equity Research at Jefferies]

Hey. Good morning, you guys, and thanks for taking my question. All of the color around the CP exposure is super duper helpful, but I was wondering to dig into the Wizards exposure a little more. I know it's small, but I do believe you do source some from Japan. But I was curious if there were any other countries to call out or details to add for rest of the world for that segment specifically.

[Gina Goetter, CFO & COO at Hasbro]

Yes. The exposure for WizardMagic is pretty minimal. I mean and it's embedded in the Wizard's bar in the bar chart embedded in the wizard's guide. So on a kind of twelve month basis, call it $5,000,000 to $10 ish million of exposure. To your point, we do have manufacture in Japan.

[Gina Goetter, CFO & COO at Hasbro]

We do also manufacture over in Europe a bit. The bulk of the manufacturing is coming from The U. S.

[Chris Cocks, CEO & Director at Hasbro]

Yes. The only thing in Wizards that we import from China is like D and D box sets. So that's actually where that's actually a bigger input on the tariff duties I mentioned for Wizards than the Japanese duties for MAGIC.

[Kylie Cohu, Consumer Equity Research at Jefferies]

Perfect. No, that is super helpful. And then, just kind of following back up on the POS trends. I think, you know, you mentioned that licensing did better than expected. But I was just curious, like, what were those bright spots specifically?

[Kylie Cohu, Consumer Equity Research at Jefferies]

That would just be helpful. And kind of what did you see, you know, anything around Easter? Obviously, there's a timing shift this year. Anything that performs particularly well?

[Chris Cocks, CEO & Director at Hasbro]

Well, on licensing, certainly, My Little Pony continued to perform well and had a favorable year over year comp. MONOPOLY GO is doing quite well. And then in terms of POS for our brands, we had Transformers was up, Dual Master sorry, Beyblade was up. We had a good quarter in terms of Marvel. Those are probably like the big bright spots for us on POS.

[Kylie Cohu, Consumer Equity Research at Jefferies]

Awesome. Super helpful. All

[Chris Cocks, CEO & Director at Hasbro]

right. Thanks.

[Gina Goetter, CFO & COO at Hasbro]

Thanks, Kylie.

[Operator]

Thank you. There are no further questions at this time. This does conclude today's conference. We thank you for your participation. You may now disconnect your lines.

Participants

Executives

• Kristen Levy, Senior IR Manager
• Chris Cocks, CEO & Director
• Gina Goetter, CFO & COO

Analysts

• Christian Carlino, Equity Research Associate at J.P. Morgan
• Megan Clapp, Executive Director at Morgan Stanley
• James Hardiman, Director - Leisure and Travel Analyst at Citi
• Arpine Kocharian, Executive Director at UBS Group
• Eric Handler, MD & Senior Research Analyst at Roth Capital Partners, LLC
• Alexander Perry, Director, Equity Research at Bank of America
• Stephen Laszczyk, Vice President at Goldman Sachs
• Jamie Katz, Analyst at Morningstar
• Kylie Cohu, Consumer Equity Research at Jefferies