Wizards of the Coast delivers record quarterly performance
Hasbro Inc. (NASDAQ:HAS) reported stronger-than-expected second-quarter results on Tuesday, as exceptional performance from its Wizards of the Coast business helped the toy and gaming company beat Wall Street forecasts and lift its full-year guidance.
Shares gained 1.73% in pre-market trading following the earnings release.
Adjusted earnings per share came in at $1.28, ahead of the consensus estimate of $1.13. Revenue increased 16% year over year to $1.14 billion, surpassing analyst expectations of $1.06 billion.
Magic: The Gathering reaches historic sales milestone
Magic: The Gathering generated more than $500 million in quarterly revenue for the first time in the franchise’s history, with sales climbing 32% to $545.3 million.
The company said the record performance was driven by the successful launch of the Marvel Super Heroes set.
“Hasbro posted another quarter of topline growth, led by Wizards of the Coast,” said Chris Cocks, Chief Executive Officer. “Magic: The Gathering eclipsed $500 million in quarterly revenue for the first time in its 30-plus year history, led by the record-breaking debut of Marvel Super Heroes.”
Gaming division offsets mixed performance elsewhere
The Wizards of the Coast and Digital Gaming division remained the company’s primary growth engine, with revenue increasing 27% to $663.8 million and operating profit rising 12% to $270 million.
Consumer Products revenue advanced 5% to $463.0 million despite disruption caused by unauthorized network access in late March.
Meanwhile, the Entertainment segment recorded a 20% decline in revenue to $12.8 million.
Overall operating profit reached $253 million, while adjusted operating profit increased 14% year over year to $282 million.
The quarter included a $56 million impairment charge related to Hasbro’s streamlined Digital Games portfolio. Reported net earnings totaled $1.12 per diluted share.
Company lifts full-year financial guidance
Following the strong quarterly performance, Hasbro increased its outlook for fiscal 2026.
The company now expects total revenue to grow between 5% and 7% in constant currency, compared with previous guidance of 3% to 5%.
Hasbro also raised its adjusted operating margin forecast to 25% to 26%, up from 24% to 25%, while increasing adjusted EBITDA guidance to a range of $1.45 billion to $1.50 billion from the previous range of $1.40 billion to $1.45 billion. The midpoint of the revised EBITDA outlook is $50 million higher than before.
During the quarter, Hasbro returned $133 million to shareholders through dividends and share repurchases and used an additional $55 million to reduce outstanding debt.
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