Hasbro ((HAS)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Hasbro’s recent earnings call painted a picture of robust growth, particularly driven by the standout performance of MAGIC: The Gathering and the Wizards of the Coast division. Despite these successes, the company faces ongoing challenges in its Consumer Products segment, primarily due to tariffs and declining revenue. Nonetheless, Hasbro remains optimistic about its future, buoyed by promising new partnerships and a strong content lineup for 2026.
Strong Revenue and Profit
Hasbro reported an impressive 8% year-over-year increase in net revenue, reaching $1.4 billion. This growth was mirrored in the company’s adjusted operating profit, which also rose by 8% to $356 million. These figures underscore Hasbro’s ability to capitalize on its strategic initiatives and market demand.
MAGIC: The Gathering Growth
A significant contributor to Hasbro’s revenue surge was MAGIC: The Gathering, which saw its revenue skyrocket by 55% to $459 million. This remarkable growth reflects a 40% increase year-to-date, highlighting the game’s enduring popularity and strategic importance to Hasbro’s portfolio.
Wizards of the Coast Performance
The Wizards of the Coast division also delivered strong results, with revenue increasing by 42% to $572 million. The division’s operating margin stood at an impressive 44%, driven by gains in both tabletop and digital formats, showcasing the division’s diversified strength.
Positive Outlook for 2026
Looking ahead, Hasbro is optimistic about its future, projecting full-year revenue growth in the high single digits and adjusted operating profit growth exceeding 20%. This positive outlook is supported by strategic initiatives and market positioning.
Successful Cost Transformation
Hasbro’s cost transformation efforts have yielded approximately $150 million in gross savings year-to-date. This achievement keeps the company on track to meet its full-year targets, demonstrating effective cost management strategies.
New Partnerships and Content
The company announced exciting new partnerships, including a collaboration with Netflix for KPop Demon Hunters. Additionally, Hasbro’s 2026 content lineup looks strong, featuring anticipated releases like Toy Story 5, Star Wars, and Marvel projects.
Consumer Products Revenue Decline
Despite overall growth, Hasbro’s Consumer Products segment experienced a 7% decline in revenue year-over-year. This downturn was attributed to retailer shifts and tariff expenses, presenting challenges that the company aims to address.
Tariff Impact on Margins
Tariffs are expected to impact Hasbro’s margins significantly, with a projected $60 million effect on the 2025 P&L. This challenge underscores the external pressures facing the Consumer Products segment.
Adjusted EPS Decline
The earnings call also revealed a 3% decline in adjusted earnings per diluted share, attributed to higher tax rates and foreign exchange impacts. This highlights some of the financial headwinds the company is navigating.
Guidance
Hasbro’s forward-looking guidance remains positive, with expectations for high single-digit revenue growth and an adjusted operating margin between 22% and 23%. The company also anticipates adjusted EBITDA to rise to approximately $1.25 billion, reflecting confidence in its strategic direction and market opportunities.
In conclusion, Hasbro’s earnings call reflects a company in a strong growth phase, driven by standout performances from MAGIC: The Gathering and Wizards of the Coast. While challenges persist in the Consumer Products segment, Hasbro’s strategic initiatives and partnerships position it well for future success. Investors and market watchers will be keen to see how these dynamics play out in the coming quarters.