Company Reports

Hasbro continues to hold a leading position in the roughly $46 billion North American retail toy industry (Circana), developing and marketing well-known global brands that include Transformers, My Little Pony, and Nerf. The firm operates a relatively differentiated business model, thanks to its digital properties and games exposure, partner brand relationships, and licensing arrangements, strengths that can be better monetized with most of its entertainment-related assets now divested. The firm's evolving multimedia presence, including its 2026 expansion into self-published video games, aids in Hasbro's progress toward its Play to Win goals, which include operating margin expansion of 50-100 basis points annually between 2025 and 2027.

Hasbro's second-quarter results included 16% sales growth, stemming from 27% growth in the Wizards of the Coast and digital games segment (67% of sales). The 24.8% adjusted operating margin was hurt by a $56 million digital impairment as Hasbro refocuses on its highest conviction digital brands.

Hasbro continues to hold a leading position in the roughly $46 billion North American retail toy industry (Circana), developing and marketing well-known global brands that include Transformers, My Little Pony, and Nerf. The firm operates a relatively differentiated business model, thanks to its digital properties and games exposure, partner brand relationships, and licensing arrangements, strengths that can be better monetized with most of its entertainment-related assets now divested. The firm's evolving multimedia presence, including its 2026 expansion into self-published video games, aids in Hasbro's progress toward its Play to Win goals, which include operating margin expansion of 50-100 basis points annually between 2025 and 2027.

Hasbro's first-quarter sales of $1 billion and operating income of $270 million were each about $30 million above its April 23 preliminary estimates. Its 2026 forecast is for constant currency sales growth of 3%-5%, an adjusted operating margin of 24%-25%, and EBITDA of $1.40 billion-$1.45 billion.

Hasbro reported preliminary first-quarter results, including sales of $970 million-$985 million and adjusted operating income of $250 million-$260 million. For 2026, Hasbro maintained its 2026 forecast for constant-currency sales that rise 3%-5% and an adjusted operating margin of 24%-25%.

Hasbro continues to hold a leading position in the roughly $46 billion North American retail toy industry (Circana), developing and marketing well-known global brands that include Transformers, My Little Pony, and Nerf. The firm operates a relatively differentiated business model, thanks to its digital properties and games exposure, partner brand relationships, and licensing arrangements, strengths that can be better monetized with most of its entertainment-related assets now divested. The firm's evolving multimedia presence, including its 2026 expansion into self-published video games, aids in Hasbro's progress toward its Play to Win goals, which include operating margin expansion of 50-100 basis points annually between 2025 and 2027.

Hasbro's fourth-quarter sales growth of 31% stemmed from 86% growth at the Wizards and digital gaming segment and 7% increase in consumer products. The adjusted operating margin of 21.8% expanded nearly 1,200 basis points year over year, as mix benefits outweighed tariff costs.

Shares of Hasbro are up almost 50% year to date, building on gains achieved since the disposition of most of the entertainment business in December 2023, with the stock sitting at $83 per share now versus $51 at that time.

Hasbro continues to hold a leading position in the $42 billion North American retail toy industry (Circana), developing, manufacturing, and marketing well-known global brands that include Transformers, My Little Pony, and Nerf. The firm operates a relatively differentiated business model, thanks to its digital properties and games exposure, partner brand relationships, and licensing arrangements, strengths that can be better monetized with the most of its entertainment-related assets now divested. The firm's evolving multimedia presence, including its 2026 expansion into self-published video games, aids in Hasbro's progress toward its Play to Win goals, which include operating margin expansion of 50-100 basis points annually between 2025 and 2027.

In the third quarter, Hasbro posted 8% sales growth, bolstered by a 42% rise in the Wizards of the Coast and digital gaming segment. The adjusted operating margin of 25.6% fell 10 basis points, affected by weakness in consumer product sales due to tariff-related ordering patterns.

Hasbro continues to hold a leading position in the $42 billion North American retail toy industry (Circana), developing, manufacturing, and marketing well-known global brands that include Transformers, My Little Pony, and Nerf. The firm operates a relatively differentiated business model, thanks to its digital properties and games exposure, partner brand relationships, and licensing arrangements, strengths that can be better monetized with the most of its entertainment-related assets now divested. The firm's evolving multimedia presence, including its 2026 expansion into self-published video games, aids in Hasbro's progress toward its Play to Win goals, which include operating margin expansion of 50-100 basis points annually between 2025 and 2027.

Hasbro's second-quarter sales declined 1% as 16% growth in the Wizards of the Coast and digital segment was offset by a 16% decline in consumer products, or CP. With a richer mix of sales, adjusted operating margin expanded 20 basis points to 25.2%, a high-water mark for the period.

Hasbro continues to hold a leading position in the $42 billion North American retail toy industry (Circana), developing, manufacturing, and marketing well-known global brands that include Transformers, My Little Pony, and Nerf. The firm operates a relatively differentiated business model, thanks to its digital properties and games exposure, partner brand relationships, and licensing arrangements, strengths that can be better monetized with the most of its entertainment-related assets now divested. The firm's evolving multimedia presence, including its 2026 expansion into self-published video games, aids in Hasbro's progress toward its Play to Win goals which include operating margin expansion of 50-100 basis points annually over the next three years.

Hasbro's first-quarter sales jumped 17%, helped by a 46% increase in its Wizards of the Coast and digital gaming segments. The higher margin mix of sales led adjusted operating margin to expand 550 basis points to 25.1%, a first-quarter high-water mark for the firm.

Hasbro continues to hold a leading position in the $42 billion North American retail toy industry (Circana), developing, manufacturing, and marketing well-known global brands that include Transformers, My Little Pony, and Nerf. The firm operates a relatively differentiated business model, thanks to its digital properties and games exposure, partner brand relationships, and licensing arrangements, strengths that can be better monetized with the most of its entertainment-related assets now divested. The firm's evolving multimedia presence, including its 2026 expansion into self-published video games, aids in Hasbro's progress toward its Play to Win goals which include operating margin expansion of 50-100 basis points annually over the next three years.

In tandem with fourth-quarter results that included a 3% pro forma sales decline and 10% adjusted operating margin, Hasbro laid out its medium-term plan, Playing to Win, which targets mid-single-digit sales growth and 50-100 basis points of operating margin expansion annually.

Hasbro continues to hold a leading position in the nearly $28 billion North American retail toy industry (Circana), developing, manufacturing, and marketing well-known global brands that include Transformers, My Little Pony, and Nerf. The firm operates a relatively differentiated business model, thanks to its digital properties exposure, content creation ability, and key licensing arrangements, abilities that can be better monetized with the Entertainment One (EOne) entertainment-related assets now divested (2023). Production capabilities support Hasbro's multimedia presence, as does Discovery Family, a joint venture that brings Hasbro's brands to television, bolstering the firm's brand blueprint strategy. Hasbro has historically dominated the big-screen, building brand loyalty and generating new streams of revenue from its licensing businesses (like Star Wars and Marvel). We think Hasbro and the toy industry have modest runway for growth ahead through international growth (Asia-Pacific and emerging markets still provide longer-term growth potential through share gains) and acquisitions of strategic players that fit into Hasbro's portfolio (for example, D&D Beyond).

Although narrow-moat Hasbro's sales performance continues to flounder, we contend that the real story behind the firm's third quarter is in its profit metrics. Sales fell 15%, to $1.3 billion, with consumer products contracting 10% and Wizards of the Coast and digital, or WOTC, down 5%. However, Hasbro's CP segment sales were primarily affected by exited brands and lower closeouts, which resulted in a strong segment-adjusted operating margin of 15%, up nearly 400 basis points. This supported an enterprise level operating margin of 25.7%, a third-quarter high-water mark, despite some compression in the WOTC profit profile.

Hasbro continues to hold a leading position in the nearly $28 billion North American retail toy industry (Circana), developing, manufacturing, and marketing well-known global brands that include Transformers, My Little Pony, and Nerf. The firm operates a relatively differentiated business model, thanks to its digital properties exposure, content creation ability, and key licensing arrangements, abilities can be better monetized with the Entertainment One (EOne) entertainment-related assets now divested (2023). Production capabilities support Hasbro's multimedia presence, as does Discovery Family, a joint venture that brings Hasbro's brands to television, bolstering the firm's brand blueprint strategy. Hasbro has historically dominated the big-screen, building brand loyalty and generating new streams of revenue from its licensing businesses (like Star Wars and Marvel). We think Hasbro and the toy industry have modest runway for growth ahead through international growth (Asia-Pacific and emerging markets still provide longer-term growth potential through share gains) and acquisitions of strategic players that fit into Hasbro's portfolio (for example, D&D Beyond).

Thanks to exposure to the right strategic growth categories, narrow-moat Hasbro could capture stellar operating margin performance in its second quarter. While the consumer products segment continues to decline as the firm prunes underperforming brands and out-licenses certain lines (with sales down 20%, but just 6% on a like-for-like basis), the Wizards of the Coast, or WOTC, and digital gaming segment keeps outperforming, delivering 20% growth as Monopoly Go surpasses expectations. Moreover, as digital comprises a larger mix of the WOTC and digital segment, margins have delivered upside, with adjusted segment margins climbing nearly 1,700 basis points over last year. With WOTC and digital representing 45% of the total sales mix in the period, Hasbro printed a 25% adjusted operating margin, a high-water mark for the firm. Even if the benefits of Monopoly Go begin to erode, we think a full-year enterprise-level 20% operating margin is in sight. We expect the WOTC segment to face headwinds from lapping more launches in 2023, leading to a midteens segment sales decline in the back half of 2024.