Skip to content
    HAS
    Earnings call· Mar 2026(Q1 FY26)

    HASBRO Q1 FY26 earnings call HAS

    May 20, 2026 Source

    Executive summary

    Hasbro Q1 FY26 — Strong Wizards Performance and Cyber Incident Recovery

    Hasbro commenced FY26 with robust growth, primarily fueled by its Wizards of the Coast segment, which saw record-breaking Magic: The Gathering sales. Despite a cybersecurity incident causing temporary revenue and cash flow shifts, the company maintained its full-year guidance, citing strong underlying demand and effective cost transformation efforts. Management remains focused on its 'Playing to Win' strategy, leveraging strong IP and digital gaming investments while navigating macro headwinds like rising oil costs.

    Highlights

    5

    • Net revenue grew 13% year-over-year to $1 billion, driven by Wizards of the Coast.

    • Adjusted operating profit increased 29% to $287 million, with adjusted operating margin expanding 360 basis points to 28.7%.

    • Adjusted EPS rose 41% year-over-year to $1.47.

    • Wizards of the Coast segment revenue grew 26% to $582 million, with operating profit up 29% to $298 million.

    • Magic: The Gathering's 'Lorwyn Eclipsed' became the best-selling Premier set of all time, and 'Secrets of Strixhaven' has already surpassed it.

    Concerns

    5

    • Consumer Products adjusted operating loss was $41 million, a decline of $10 million year-over-year, due to higher royalty expense and incremental tariffs.

    • A cybersecurity incident in March is expected to incur $20 million in one-time operating expenses for remediation.

    • The cyber incident is expected to delay $40 million to $60 million of Consumer Products revenue from Q2 to the back half of the year.

    • Higher oil costs are anticipated to impact freight, resin, and packaging costs by approximately $30 million in the back half of 2026.

    • Cash flow from operations will experience lumpiness, with some Q2 receivables shifting to Q3 due to invoicing delays from the cyber event.

    Guidance & targets

    16
    CategoryTargetConfidence
    Consolidated Revenue Growth
    3% to 5%
    high materiality
    High
    Adjusted Operating Margin
    24% to 25%
    high materiality
    High
    Adjusted EBITDA
    $1.4 billion to $1.45 billion
    high materiality
    High
    Wizards of the Coast Revenue Growth
    mid-single-digit
    medium materiality
    High
    Wizards of the Coast Operating Margin
    low 40% range
    medium materiality
    High
    Consumer Products Revenue Growth
    low single digits
    medium materiality
    High
    Consumer Products Adjusted Operating Margin
    6% to 8% range
    medium materiality
    High
    Entertainment Segment Revenue Growth
    slightly positive
    low materiality
    High
    Entertainment Segment Operating Margin
    approximately 50%
    low materiality
    High
    Cyber Incident Remediation Expenses
    $20 million
    medium materiality
    High
    Consumer Products Revenue Delay (Cyber Incident)
    $40 million to $60 million
    medium materiality
    High
    Cost Transformation Gross Savings
    $150 million
    medium materiality
    High
    Oil-related Input Cost Impact
    $30 million
    medium materiality
    Medium
    Consumer Products Q2 Growth
    low single-digit rate
    medium materiality
    High
    Consumer Products Q3 Growth
    double-digit growth
    medium materiality
    High
    Wizards of the Coast H2 Growth
    low single-digit rates
    medium materiality
    Medium

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Wizards of the Coast
    Strong performance driven by Magic: The Gathering, with 'Lorwyn Eclipsed' and 'Secrets of Strixhaven' setting sales records. Product mix and scale offset higher royalty and operating expenses. Meaningful distribution gains within the Wizards Play Network.
    Operating Margin: 51.2%Operating Margin YoY Change: +140 bpsMagic Backlist Growth: double-digitSecret Lair Growth: double-digitMONOPOLY Go Revenue: $41 millionDigital and Licensing Revenue Growth: 3%
    		$582 million26%—$298 million
    Consumer Products
    Revenue was flat year-over-year, with growth in toy and game volume offset by a decline in licensing due to challenging prior-year comparisons. The segment experienced an adjusted operating loss due to higher royalty expense and incremental tariffs. POS performance was in line with expectations, and inventory levels remain healthy.
    Adjusted Operating Loss YoY Change: -$10 million
    		$398 millionflat—-$41 million
    Entertainment
    Revenue and adjusted operating profit were in line with expectations. Q1 profitability was favorably impacted by the timing of entertainment-backed revenues in the Consumer Products segment, specifically for PEPPA PIG.
    		$20 million——$20 million

    Operational metrics

    11
    Adjusted Operating Profit
    $287 millionincreased 29%
    Q1 FY26

    Company-wide adjusted operating profit.

    Adjusted Operating Margin
    28.7%up 360 bps
    Q1 FY26

    Company-wide adjusted operating margin, driven by favorable business mix and cost savings.

    Cost Transformation Gross Savings
    $37 million
    Q1 FY26

    Savings achieved in Q1, on track for full-year commitment.

    Total Hasbro Adjusted EBITDA
    $339 millionup 24%
    Q1 FY26

    Behind planned efficiencies across supply chain, product development, and SG&A.

    Strategic Investments
    $50 million
    Q1 FY26

    Funded in Q1.

    Shareholder Returns (Dividend)
    $99 million
    Q1 FY26

    Returned to shareholders via dividend.

    New Notes Issued
    $400 million
    Q1 FY26

    Proceeds used to repay November 2026 maturities and repurchase higher-rate, longer-dated debt.

    Tariff Expense Benefit
    $15 millionlower than initial guidance
    FY26

    Benefit reflected in the CP margin range, offsetting higher oil-related input costs.

    Wizards Play Network Stores
    11,000+
    Q1 FY26

    Number of stores participating in organized play events.

    MagicCon Las Vegas Badges Sold
    23,000+
    Q1 FY26

    Largest Magic event ever.

    Gem Squared Categories Growth
    22%
    2025

    Growth rate for gamified, entertainment-driven, multi-purchase, multigenerational categories, compared to 3% decline for the balance of the toy industry.

    Industry KPIs

    9
    MetricValueDetails
    EPS$1.47USD
    Revenue$1 billionUSD
    Inventory—
    Market share—
    Operating margin28.7%%
    Adjusted EBITDA ebita$339 millionUSD
    Operating income EBIT$287 millionUSD
    Tariff impact mitigation$50 millionUSD
    Share buyback capital return—

    Product announcements

    4
    ProductTypeDetails
    Magic Arena Marvel Super Heroesexpansion
    EXODUS (video game)launch
    Warlock (video game)launch
    Dungeon Masters (D&D series)launch

    Deals & partnerships

    2
    The Walt Disney CompanyCollaboration to feature Marvel Super Heroes on Magic Arena.

    Partnership announced for Magic Arena to feature full digital rights for the upcoming Marvel Super Heroes launch, extending the Magic ecosystem and reaching new fans.

    ScopelyOngoing partnership for the mobile game MONOPOLY Go.

    Scopely continues to manage MONOPOLY Go, which is described as a 'juggernaut' and a significant contributor to Hasbro's bottom line through licensing and product sales.

    Risks & headwinds

    6
    Cybersecurity Incident Remediation CostsFY26

    $20 million

    Mitigation: These expenses are one-time and will not impact adjusted EBITDA. Systems are being brought back online, with financial systems prioritized and other operational systems expected online by June. The situation is contained.

    Consumer Products Revenue Delay due to Cyber IncidentQ2 FY26 revenue delayed to H2 FY26 (mostly Q3)

    $40 million to $60 million

    Mitigation: Strong POS and upcoming entertainment slate provide good line of sight into recovery. Most of the delayed revenue is expected to shift into Q3.

    Rising Oil Costs (Freight, Resin, Packaging)back half of 2026

    approximately $30 million

    Mitigation: Actions underway include freight optimization, mix management, and operating spend reductions. Lower tariff expenses (a $15 million benefit) and continued productivity/pricing mix also help mitigate the impact.

    Lumpiness in Cash Flow from OperationsQ2 to Q3 FY26

    Some Q2 receivables shifting to Q3

    Mitigation: Caused by invoicing delays due to the cyber incident. Cash flow is expected to pick up and recover in Q3 and Q4.

    Tougher Q4 Comps for Wizards of the CoastQ4 FY26

    Moderated growth rates, potential decline in Q4

    Mitigation: Volume growth is absorbing the impact of incremental royalties and back-half investments behind 2027 digital game releases. Overall H2 Wizards growth is still expected to be low single-digits.

    Higher Royalty Expense and Incremental TariffsQ1 FY26

    Contributed to $10 million decline in CP adjusted operating loss

    Mitigation: Offset by product mix, scale, and cost savings in Wizards. For CP, the full-year margin range reflects benefit of lower tariff expense offset by higher oil-related input costs, with continued productivity and pricing mix providing further support.

    What to watch in Q2 FY26

    5

    Consumer Products Q2 Revenue Growth

    next quarter
    CurrentExpected low single-digit rate
    TargetActual Q2 growth rate

    Why it matters

    This will confirm the impact of the cyber incident on revenue delays and the effectiveness of mitigation efforts.

    So we still expect Q2 for consumer products to grow, albeit it's going to be kind of a low single-digit rate.

    Q&A highlights

    5

    Why was full-year guidance reiterated despite a strong Q1 beat and momentum, especially given potential cost increases and the cyber incident? Can you provide more specific Q2 expectations for Consumer Products and Wizards?

    Management stated that reiterating guidance is consistent with typical practice early in the year, especially with new releases and entertainment slate ahead, and ongoing cyber remediation. For Q2, Consumer Products is expected to grow at a low single-digit rate due to $40M-$60M revenue shift to Q3 from the cyber incident, while Wizards is expected to have a robust Q2 driven by Strixhaven and Marvel Super Heroes launches.

    “So we still expect Q2 for consumer products to grow, albeit it's going to be kind of a low single-digit rate. And then we expect that double-digit growth to really come into Q3. We think most of that $40 million to $60 million is going to shift into Q3.”

    asked by Megan Christine Alexander · answered by Gina Goetter

    2 min read6 chapters

    Detailed Narrative

    01

    Wizards of the Coast Momentum and IP Expansion

    Wizards of the Coast demonstrated strong momentum in Q1 FY26, with revenue growing 26% to $582 million. Magic: The Gathering's 'Lorwyn Eclipsed' set became the best-selling Premier set of all time, and the 'Teenage Mutant Ninja Universe is Beyond' collaboration exceeded expectations. The segment also saw record backlist sales, driven by demand for 'Avatar: The Last Airbender' and 'Final Fantasy' collaborations, indicating successful audience expansion and engagement. MagicCon events are also seeing record attendance globally, reinforcing the franchise's broad appeal.

    02

    Consumer Products POS Growth and Strategic Focus

    The Consumer Products segment, despite flat year-over-year revenue at $398 million, showed positive point-of-sale (POS) momentum and gained market share in key 'Gen Square' categories. These categories, characterized by gamified, entertainment-driven, multi-purchase, and multigenerational appeal, grew 22% in 2025 while the broader toy industry declined 3%. Upcoming tentpole releases like 'Star Wars,' 'Toy Story 5,' 'Spiderman,' and 'Avengers Doomsday' are expected to drive further growth, supported by lean retailer inventories.

    03

    Cybersecurity Incident Impact and Mitigation

    A cybersecurity incident in late March led to an estimated $20 million in one-time📎 remediation expenses and a delay of $40 million to $60 million in Q2 Consumer Products revenue, primarily shifting to Q3. The company temporarily shut down systems to protect its environment and is on track to restore all operational systems by June. Management emphasized that the situation is contained, and the financial impacts are already embedded in the full-year guidance, with strong confidence in revenue recovery.

    04

    Financial Performance and Cost Transformation

    Hasbro delivered a strong Q1 FY26 with net revenue up 13% to $1 billion and adjusted operating profit up 29% to $287 million, resulting in a 28.7% adjusted operating margin. Cost transformation efforts contributed $37 million in gross savings, keeping the company on track for its full-year commitment of $150 million. Adjusted EBITDA increased 24% to $339 million, reflecting planned efficiencies and margin expansion despite elevated royalties and investments in upcoming digital game launches.

    05

    Balance Sheet and Capital Allocation

    The company generated $338 million in operating cash flow in Q1, funding $50 million in strategic investments and returning $99 million to shareholders via dividends. Hasbro also initiated share repurchases under a new program and issued $400 million in new notes to repay November 2026 maturities and repurchase higher-rate, longer-dated debt. Capital allocation priorities remain focused on business investment (especially Wizards and digital gaming), debt reduction, and shareholder returns.

    06

    Navigating Macroeconomic Headwinds

    Management acknowledged a dynamic macro environment, including the impact of rising oil costs, which are expected to add approximately $30 million in costs for freight, resin, and packaging in the back half of 2026. However, the company is implementing various mitigation strategies, including freight optimization, mix management, operating spend reductions, and leveraging lower tariff expenses (a $15 million benefit from initial guidance), to offset these pressures and maintain its margin targets.

    AI-generated summary of the company’s earnings call. Not investment advice.