Hasbro (HAS) CEO Chris Cocks says the company’s first quarter challenged conventional thinking that American consumers are retreating due to high gas prices and a new wave of inflation.
The reason is simple: people are prioritizing their children.
“There’s birthdays, Christmas, etc. They’ll make sure their kids are well taken care of. And toys are a small kind of thing that brings joy to a home. And then I think the second thing, it’s a little luxury for people. You know, when the price of dining out eclipses $100, when filling up the tank eclipses $70 to $80, it’s nice to just buy something fun from a fandom that you love and that’s affordable,” Cocks said on Yahoo. Initial Finance Offer (video above).
Despite several wins for Hasbro in the quarter, shares fell 8% in trading on Wednesday. The company maintained a cautious outlook for the rest of the year amid uncertainty over demand and more normalized growth in “Magic: The Gathering.”
Top Yahoo Finance Chat with Cocks Comments
-
About Star Wars: “Ultimate Grogu is probably the highest-end collectible we’ve ever made. I think it sold out in about 20 minutes when we put it up for sale on Hasbro Pulse. And I think it’s just one of the many, many really cool toys we have for the ‘Mandalorian and Grogu’ movie, which comes out this weekend.”
-
On the collectibles market: “I think collectibles are a way to bond with others. And, you know, they just create friendships and ways to express your fandom. So that’s the first thing; I think the second thing is that collectibles really started to take off, particularly trading cards, in the ’90s. So, a group of people who were 6 to 10 years old, from 1993 to 1999, when “Magic” was invented and Pokémon were invented, are now 30 years.”
-
On Hasbro’s claim for $50 million worth of tariff refunds: “According to our forecasts, we don’t have any tariff refunds planned. I think if we get them this year, it would be at the end of the year.”
First Quarter Earnings Analysis
-
Net sales: +13% year over year to $1 billion, vs. estimates of $962.9 million
-
Diluted earnings per share: +41% year over year to $1.47, vs. estimates of $1.20
What else caught our attention?
-
The outlook for 2026 was reiterated: 1) Sales increased by 3% to 5% in constant currency; 2) Adjusted operating margin from 24% to 25%; 3) Adjusted EBITDA from $1.4 billion to $1.45 billion.
-
Wizards of the Coast and Digital Gaming segment operating margins in the first quarter: 51.2% versus 49.8% last year.
-
Q1 Consumer Products segment operating margins: -10.2% vs. -7.8% last year.