Hasbro Q1 Earnings Call Highlights

Key Points

• Hasbro posted a strong Q1 with revenue up 13% year over year to $1 billion, while adjusted operating profit rose 29% and adjusted diluted EPS climbed 41%. Growth was led by Wizards of the Coast and the continued strength of Magic: The Gathering.
• Wizards of the Coast was the standout segment, with revenue up 26% to $582 million and operating margin reaching 51.2%. Management highlighted record-performing Magic releases, strong backlist sales, and a growing slate of Universes Beyond collaborations.
• Hasbro kept full-year guidance unchanged despite cybersecurity-related disruptions and higher input costs. The company expects some revenue and cash flow to shift into later quarters, but still sees 3% to 5% constant-currency revenue growth and $1.4 billion to $1.45 billion in adjusted EBITDA for 2026.

Hasbro NASDAQ: HAS reported a stronger start to 2026, with first-quarter revenue rising 13% year over year to $1 billion, driven primarily by momentum at Wizards of the Coast and continued strength in the company’s Magic: The Gathering franchise.

Chief Executive Officer Chris Cocks said the quarter reinforced Hasbro’s confidence in its “Play to Win” strategy, citing the company’s intellectual property portfolio, licensing capabilities and partnerships. “Hasbro started 2026 with momentum,” Cocks said, adding that Consumer Products posted point-of-sale growth and share gains in key categories.

Chief Financial Officer and Chief Operating Officer Gina Goetter said adjusted operating profit rose 29% to $287 million, while adjusted operating margin expanded 360 basis points to 28.7%. Adjusted diluted earnings per share increased 41% year over year to $1.47.

Wizards of the Coast Leads Growth

Wizards of the Coast revenue grew 26% in the quarter to $582 million, supported by strength in Magic. Segment operating profit increased 29% to $298 million, with operating margin rising to 51.2%.

Cocks said Magic’s “record 2025 was no fluke,” pointing to the January debut of Lorwyn Eclipsed, which he said became the best-selling Magic premier set of all time. He also cited the Teenage Mutant Ninja Turtles Universes Beyond collaboration, which outperformed internal expectations.

Backlist sales also set a quarterly record, helped by demand for Avatar: The Last Airbender and Final Fantasy. Cocks said 2026 already ranks as the third-largest backlist year in Magic’s history after just one quarter. MagicCon Las Vegas sold more than 23,000 badges, making it the largest Magic event ever, while MagicCon Amsterdam is on track to sell out, he said.

Goetter said both Backlist and Secret Lair posted double-digit growth, while the company achieved distribution gains within the Wizards Play Network. Digital and licensing revenue increased 3%, and Monopoly GO! generated $41 million in revenue, in line with company expectations.

Cocks said Magic’s momentum has continued into the second quarter, with Secrets of Strixhaven surpassing Lorwyn Eclipsed as the largest Magic premier set ever. The year’s upcoming Universes Beyond slate includes Marvel Super Heroes, The Hobbit and Star Trek. Hasbro also announced with The Walt Disney Company that Magic Arena will include full digital rights for the upcoming Marvel Super Heroes launch.

Consumer Products Stable as Entertainment Slate Builds

Consumer Products revenue was $398 million, roughly flat year over year. Goetter said growth in toy and game volume was offset by a decline in licensing as the company lapped difficult prior-year comparisons. The segment posted an adjusted operating loss of $41 million, about $10 million worse than a year earlier on an adjusted basis, reflecting higher royalty expense, incremental tariffs and the impact of prior-year licensing strength.

Cocks said point-of-sale trends were positive in the first quarter and continued through the end of April. He said the company remains on plan to grow the segment for the year, supported by lean retailer inventories and focus on Hasbro’s GEM2 categories — products that are gamified, entertainment-driven, multi-purchase and multi-generational.

Hasbro pointed to several upcoming entertainment-driven opportunities, including The Mandalorian & Grogu, Disney and Pixar’s Toy Story 5, Spider-Man: Brand New Day and Marvel Studios’ Avengers: Doomsday. Cocks also mentioned positive early demand for Ultimate Grogu, FIFA Monopoly products, upcoming Play-Doh innovation and K-pop Demon Hunters products expected to reach shelves in July.

During the question-and-answer session, Cocks said retailers are behaving as Hasbro expected and that strong categories have supported retailer ordering. Goetter added that owned and retail inventories remained healthy entering the year and through the first quarter.

Cybersecurity Incident Delays Some Revenue

Hasbro executives addressed a cybersecurity incident that occurred at the end of March. Cocks thanked the company’s IT, sales, finance and operations teams for keeping the company “open for business” despite the incident and related precautions.

Goetter said Hasbro expects three impacts in 2026 from the incident. The company anticipates about $20 million of additional one-time operating expenses tied to remediation, which will not affect adjusted EBITDA. It also expects $40 million to $60 million of Consumer Products revenue to shift from the second quarter into the back half of the year, mostly into the third quarter. In addition, some receivables are expected to move from the second quarter into the third quarter because of delayed invoicing, affecting cash flow timing.

In response to an analyst question, Goetter said Hasbro took down systems to protect its environment and prioritized restoring financial systems so it could report earnings and file required disclosures. She said the company is working to bring order management, shipping and invoicing systems back online and expects that process to be completed around June. “The situation itself has been contained,” she said, adding that Hasbro does not foresee future risk from the incident.

Guidance Maintained Despite Cost Pressures

Hasbro maintained its full-year outlook. The company continues to expect consolidated revenue to grow 3% to 5% year over year on a constant-currency basis, adjusted operating margin of 24% to 25%, and adjusted EBITDA of $1.4 billion to $1.45 billion.

Goetter said Wizards remains on track for mid-single-digit revenue growth with operating margins in the low 40% range. Consumer Products is expected to grow in the low single digits for the year, with adjusted operating margin of 6% to 8%. Entertainment revenue is expected to be slightly positive year over year, with operating margins of about 50%.

Cocks said holding guidance after the first quarter was consistent with Hasbro’s typical approach, given that it remains early in the year and several product and entertainment releases are still ahead. Goetter said the company is also still working through the final phases of cyber remediation.

Hasbro said it is managing higher oil-related input costs tied to freight, resin and packaging. Goetter estimated the full-year impact at about $30 million, assuming oil remains around $100 per barrel. She said the pressure is largely concentrated in Consumer Products, although freight affects the broader company. Hasbro expects to offset the impact through tariff favorability, productivity actions, cost savings, mix management and pricing.

Cash Flow, Debt and Capital Returns

Hasbro generated $338 million in operating cash flow during the quarter, funded $50 million in strategic investments and returned $99 million to shareholders through dividends. Goetter said the company also began share repurchases under its recently authorized program.

The company issued $400 million of new notes, using proceeds to fully repay November 2026 maturities and apply the balance toward repurchasing higher-rate, longer-dated debt.

Goetter said the strong first-quarter cash flow reflected Magic’s performance, including deliveries from both the fourth quarter and first quarter. However, she said cash flow will be “lumpy” during the year because of the cyber incident, with some expected second-quarter cash collections shifting into the third quarter.

Goetter said Hasbro’s capital allocation priorities remain unchanged: investing in the business, particularly in Wizards, digital gaming and licensing, while continuing to return cash to shareholders through dividends and buybacks.

About Hasbro NASDAQ: HAS

Hasbro, Inc is a global play and entertainment company, known for designing, manufacturing and marketing a diverse portfolio of toys, games and consumer products. Founded in 1923 as Hassenfeld Brothers and headquartered in Pawtucket, Rhode Island, the company has grown into one of the foremost names in the toy industry, with a presence in retail, digital and entertainment channels worldwide.

The company's brand portfolio features iconic properties such as Monopoly, Play-Doh, Nerf, My Little Pony and Transformers.

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