Hasbro (NASDAQ:HAS) released first-quarter financial results and hosted an earnings call on Wednesday. Read the complete transcript below.
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Summary
Hasbro reported a 13% revenue growth in Q1 2026, driven largely by Wizards of the Coast, with Magic: The Gathering setting new sales records.
The company maintained its full-year guidance, expecting 3-5% revenue growth, with strategic focus on high-growth categories such as gamified, entertainment-driven products.
Q1 net revenue was $1 billion, with adjusted operating profit up 29% and adjusted EPS up 41% year-over-year.
The cybersecurity incident in March is expected to delay $40-$60 million in consumer products revenue to later in the year, but overall guidance remains unchanged.
Management highlighted the success of new releases, strong partnerships, and upcoming entertainment slates as key growth drivers, while acknowledging challenges such as rising oil costs.
Full Transcript
OPERATOR
Good morning and welcome to the Hasbro’s first quarter 2026 earnings call. At this time, all parties will be in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the call, please press 0 on your telephone keypad. Today’s conference is being recorded. If you have any objections, you may disconnect at this time. Finally, I’d like to turn the call over to Fred Whiteman, Vice President, Hasbro Investor Relations. Please go ahead, sir.
Fred Whiteman (Vice President, Investor Relations)
Thank you and good morning everyone. Joining me today are Chris Cox, Hasbro’s Chief Executive Officer, and Gina Guider, Hasbro’s Chief Financial Officer and Chief Operating Officer. We’ll begin today’s call with Chris and Gina providing commentary on the company’s performance before taking 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. 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 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. These factors include those set forth in our annual report on Form 10-K, 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 would now like to introduce Chris Cox.
Chris Cox (Chief Executive Officer)
Thanks, Fred and good morning everyone. Hasbro started 2026 with Momentum. Revenue grew 13% powered by Wizards of the coast while consumer products posted point of sale growth and share gains across our key gem squared categories. These results reinforce our confidence in the playing to win strategy as Hasbro’s defi portfolio, industry leading licensing capabilities and world class partners position us for success today and into the future. Let’s dig into results starting with Wizards of the coast. Q1 showed that Magic’s record 2025 was no fluke. Lorwyn Eclipsed, which debuted in January, became the best selling Magic premier set of all time and delivered the highest engagement and organized play statistics we’ve seen since the pandemic. We follow that with the Teenage Mutant Ninja Universes beyond collaboration that outpaced internal expectations. More proof that our multi franchise strategy is expanding. The Magic audience backlist was once again a standout, setting a quarterly record thanks to demand for the Last Airbender and Final fantasy. We’re only one quarter into the year, but 2026 already represents the third largest backlist year in Magic’s history. We’re seeing record demand extend beyond tabletop and digital into live experiences too. MagicCon Las Vegas sold more than 23,000 badges, making it the largest magic event ever. That demand is global. MagicCon Amsterdam is on track to sell out as well. From our tentpole MagicCons to weekly organized play events across More than 11,000 Wizards play network stores, the flywheel of new player acquisition, distribution growth and durable retention are showing up in the numbers. Magic’s momentum has carried into Q2, where secrets of Strixhaven already have surpassed Lorwyn Eclipsed as the largest Magic premier set ever. The rest of the year features a blockbuster Universes beyond slate with Marvel superheroes the Hobbit and Star Trek. And yesterday, in partnership with the Walt Disney Company, we announced Magic arena will feature full digital rights for the upcoming Marvel Superheroes launch. This is a meaningful step forward in our strategy to extend the magic ecosystem across platforms and reach new fans wherever they play. Outside of Magic, Wizards of the coast teams are polishing our AAA video game launches, Exodus from Archetype and Warlock from Invoke. Both titles remain on schedule to launch next year and we’re excited to share Exodus extended showcase with fans later this summer. D and D is on a great trajectory. We launched Dungeon Masters, our first official D and D actual play series on YouTube featuring talent from Baldur’s Gate 3 alongside top creators in the tabletop space. Turning to consumer products, we’re continuing to see POS momentum with positive trends in first quarter that have continued through the end of April with lean retailer inventories. We remain on plan to grow the segment for the year. Our focus on gem squared categories, those parts of the toy industry that are gamified, entertainment driven, multi purchase and multi generational, continues to pay dividends. These are structurally advantaged categories with above industry growth and we gained share in many of our key categories in the first quarter. Looking ahead, we’re two days away from Star Wars return to theaters for the first time since 2019 with the Mandalorian and Grogu, we have a strong lineup of product on shelves and if early demand for our ultimate grogu is any indication fans are as excited as we are. We have three additional tentpole releases ahead, including Disney and Pixar’s Toy Story 5, Brand New Day and Marvel Studios Doomsday. That is a stacked content lineup that creates real opportunity across consumer products with positive early reads from FIFA Monopoly, including Blaster boxes that are resonating with collectors and live sellers alike. Category first innovation from the Play DOH brand this summer and K Pop Demon Hunters product hitting shelves in July. There’s a lot to look forward to at Hasbro. Before I hand off to Gina to walk through the financials, I want to offer a sincere thank you to our team and partners for delivering a great start to 2026. I want to give a special call out to our IT sales, finance and operations teams who have kept Hasbro open for business despite the cybersecurity incident and enhanced precautions we have taken. With that, I’ll turn it over to Gina.
Gina Guider
Thanks Chris and good morning everyone. We delivered a strong start to 2026 with Q1 results, on track across revenue, profit and margin. Net revenue in the first quarter was $1 billion, up 13% year over year, driven by performance in Wizards. Adjusted operating profit of $287 million increased 29% with an adjusted operating margin of 28.7%, up 360 basis points versus last year from favorable business mix and cost savings. Adjusted earnings per diluted share were $1.47, up 41% year over year, reflecting strong operating leverage and disciplined execution. Looking more closely at the segments Wizards’ momentum continued. Segment revenue grew 26% to $582 million behind the Strength in Magic. Operating profit increased 29% to $298 million with a 51.2% operating margin up 140 basis points versus last year. Product mix and scale were more than able to offset the headwind of higher royalty and operating expense. The Magic’s ecosystem remained healthy through the quarter, with both Backlist and Secret Lair posting double digit growth and we achieved meaningful distribution gains within the Wizards Play network, underscoring the durability of the franchise. Digital and licensing revenue was up 3% and monopoly Go delivered $41 million of revenue in line with our expectations. Consumer products revenue was $398 million essentially flat year over year, with growth in toy and game volume offset by a decline in licensing as we lap challenging prior year compares. Adjusted operating loss was $41 million, a decline of roughly 10 million versus last year on an adjusted basis. The loss reflects higher royalty expense. Incremental tariffs and the impact of prior year licensing strength. As we move through the quarter, P.O.S. performance was in line with expectations and both owned and retail inventory levels remain healthy, providing a good setup in advance of key theatrical windows as well as the upcoming seasonal builds. The Entertainment segment delivered $20 million in revenue and $20 million in adjusted operating profit which was also in line with expectations. Q1 profitability was favorably impacted by the timing of entertainment backed revenues in the consumer products segment, namely for Peppa Pig. Our cost transformation efforts delivered $37 million in gross savings which has us on track for our full year commitment of $150 million. Total Hasbro adjusted EBITDA was 339 million and up 24% versus last year behind planned efficiencies across supply chain product development and SGA supporting margin expansion even as we absorbed elevated royalties and incremental investments for our upcoming 2027 digital game launches. From a balance sheet and cash flow perspective, we generated $338 million in operating cash flow, funded $50 million in strategic investments and returned $99 million to shareholders via our dividend and we started share repurchases under our recently authorized share repurchase program. Finally, we issued $400 million of new notes with the proceeds going towards fully repaying the November 2026 maturities and the balance applied to the repurchase of higher rate longer dated debt. We are encouraged by our strong start to the year and believe we are well positioned to continue the momentum and deliver on our full year financial commitments. The macro environment continues to require agility including absorbing and offsetting the impact of rising oil costs across the business which impacts our freight, resin and packaging costs. While the impact of higher inputs won’t be realized until the back half of 2026, we have several actions underway across a variety of operating levers including freight optimization, mix management and operating spend reductions to mitigate the impact. As we look to our full year outlook, …
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