Earnings call transcript: Hasbro Q1 2026 beats expectations, stock dips

Hasbro Inc. (HAS) delivered a robust Q1 2026 performance, significantly surpassing earnings expectations with an EPS of $1.47 against a forecast of $0.99, marking a 48.48% surprise. Revenue reached $1.0 billion, exceeding the anticipated $910.89 million. Despite these strong results, Hasbro’s stock fell 3.34% in premarket trading, reflecting investor concerns about broader market conditions or potential future challenges.

Hasbro reported a strong start to 2026, with Q1 results showcasing significant growth in both revenue and profitability. The company’s performance was bolstered by its Wizards of the Coast segment, which saw a 26% increase in revenue year-over-year. Overall, Hasbro’s strategic initiatives and product innovations have positioned it well in a competitive market.

Hasbro’s Q1 2026 earnings per share of $1.47 significantly beat the forecasted $0.99, resulting in a 48.48% earnings surprise. This strong performance reflects the company’s effective cost management and strategic growth initiatives.

Despite the positive earnings report, Hasbro’s stock declined by 3.34% in premarket trading, closing at $93.93. This movement contrasts with the company’s recent upward trend—the stock has gained 27% over the past six months and nearly 20% year-to-date. The pullback may reflect investor caution about valuation, as InvestingPro analysis suggests the stock is currently overvalued relative to its Fair Value. The company trades at a high Price/Book multiple of 21.21, which could be prompting profit-taking despite the strong quarterly results. Investors seeking deeper valuation insights can explore InvestingPro’s Most Overvalued stocks list for market-wide context.

Looking ahead, Hasbro remains optimistic about continued growth, with EPS forecasts for the upcoming quarters indicating sustained profitability. The company plans to leverage upcoming product releases and strategic partnerships to drive further revenue.

CEO Chris Cocks stated, "Our strong Q1 performance underscores our ability to execute on our strategic priorities and deliver value to our shareholders. We are well-positioned to capitalize on market opportunities with our innovative product lineup."

During the earnings call, analysts inquired about the potential impact of the cybersecurity incident on future financials and the company’s strategy to mitigate supply chain challenges. Executives reassured stakeholders of their robust response plans and ongoing efforts to optimize operations.

Overall, Hasbro’s Q1 2026 results reflect a strong operational performance, though investor sentiment remains cautious amid broader market uncertainties. An InvestingPro tip notes that while the company wasn’t profitable over the last twelve months, analysts predict profitability this year with forecasted EPS of $5.77. The company has also maintained dividend payments for 46 consecutive years, currently yielding 2.88%. For investors seeking comprehensive analysis, Hasbro is among the 1,400+ US equities covered by InvestingPro’s Pro Research Reports, which transform complex data into clear, actionable intelligence.

Operator: Good morning, welcome to the Hasbro 1st quarter 2026 earnings call. I’d like to turn the call over to Fred Wightman, Vice President, Hasbro Investor Relations. Please go ahead, sir.

Fred Wightman, Vice President, Investor Relations, Hasbro: Thank you. Good morning, everyone. Joining me today are Chris Cocks, Hasbro’s Chief Executive Officer, and Gina Goetter, 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 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. 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 Cocks. Chris?

Chris Cocks, Chief Executive Officer, Hasbro: 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 GEM2 categories. These results reinforce our confidence in the Play to Win strategy as Hasbro’s deep IP vault, 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 in organized play statistics we’ve seen since the pandemic. We followed that with the Teenage Mutant Ninja Turtles 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 Avatar: The Last Airbender and Final Fantasy. We’re only one quarter into the year, 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 has 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. 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&D is on a great trajectory. We launched Dungeon Masters, our first official D&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 GEM2 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 2 days away from Star Wars’ return to theaters for the first time since 2019 with The Mandalorian & 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 3 additional tentpole releases ahead, including Disney and Pixar’s "Toy Story 5," "Spider-Man: Brand New Day," and Marvel Studios’ "Avengers: 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 lots 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 that 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 Goetter, Chief Financial Officer and Chief Operating Officer, Hasbro: 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 c