Hasbro (NASDAQ:HAS) reported third-quarter revenue growth of 15% and a 52% increase in adjusted operating profit, led by continued momentum at Wizards of the Coast and Digital Gaming and improved profitability in Consumer Products.
Chief Executive Officer Chris Cocks said the company delivered “another strong quarter with record profitability,” citing growth across all three operating segments. Third-quarter net revenue totaled $1.6 billion, while adjusted operating profit reached $541 million. Adjusted operating margin expanded 830 basis points to 33.9%, and adjusted diluted earnings per share rose 73% year over year to $2.90.
Chief Financial Officer and Chief Operating Officer Gina Goetter said favorable business mix, cost productivity and tariff refunds supported the margin improvement. Through the first nine months of 2026, Hasbro generated $3.7 billion in net revenue, up 15%, and $1.1 billion in adjusted operating profit, up 35%.
Magic drives Wizards growth
Wizards of the Coast and Digital Gaming revenue increased 31% to $747 million during the quarter. Magic: The Gathering revenue rose 34% to $616 million, surpassing $600 million in quarterly revenue for the first time, according to Cocks.
Cocks said growth was broad-based across new releases, backlist products and Secret Lair offerings. The Hobbit, released in August, became the fourth-best-selling Magic set in the game’s history, while October’s Reality Fracture release exceeded internal expectations.
Goetter said third-quarter Wizards results included about $40 million in Magic sales that the company had previously expected to occur during the fourth quarter, primarily related to Reality Fracture. Management said the timing shift would weigh on fourth-quarter comparisons but was not indicative of weaker demand.
During the question-and-answer session, Cocks said Reality Fracture was among the best-performing Premier Sets Hasbro has released, while The Hobbit performed more like a larger release despite having fewer stock-keeping units. He also cited higher player engagement and expanded distribution. Magic is now available in close to 40,000 retail locations, including more than 13,000 Wizards Play Network stores.
Hasbro said Magic’s organized-play participants during the first nine months of 2026 were more than 40% above the full-year 2024 total. Cocks added that pre-release participation for The Hobbit was the company’s highest for a Universes Beyond release, while MagicCon Atlanta sold out and badge sales rose nearly 30% from the prior year.
The company expects Magic to grow again in 2027, supported by six major releases with full product suites. Cocks said a full suite of Commander decks and collectible products can create a sales difference of 50% or more per set relative to a more limited release. Hasbro also announced Marvel: Darkhold Destiny, an original Marvel storyline for Magic that will include a new character and companion comic.
Digital games and licensing strategy
Hasbro confirmed that its science-fiction role-playing game Exodus is scheduled to launch April 7, 2027. Cocks said the game was approaching 1 million wishlists, which he said compared favorably with other recent releases. The company’s Dungeons & Dragons action-adventure title, Warlock, is also planned for 2027.
Goetter said the launches will affect Wizards margins next year because of non-cash amortization expense. Management expects Wizards operating margins to be in the high 30% range during 2027, compared with expected 2026 operating margins of about 44% to 45%. Goetter said game amortization, particularly in the first year after launch, would be the largest unusual factor affecting 2027 profitability.
Hasbro began separately reporting licensing revenue this quarter, combining digital gaming licensing revenue, including Monopoly Go!, with licensed consumer-products revenue. Total licensing revenue was $144 million in the quarter and $417 million for the first nine months, down 4% year over year. Goetter attributed the decline primarily to $26 million of non-recurring licensing items in the prior year and difficult comparisons for Kaiju My Little Pony trading cards.
Cocks said Hasbro’s licensing businesses generate nearly $700 million in annual revenue across consumer products, digital and entertainment. The company is emphasizing an asset-light approach through licensed consumer products, location-based entertainment, digital licensing, entertainment and music.
Consumer Products profitability improves
Consumer Products revenue rose 4% to $828 million, as the toy and game business recorded its fourth consecutive quarter of growth. Marvel was a standout, with revenue up more than 35%, supported by theatrical releases from Marvel Studios.
Consumer Products adjusted operating profit doubled to $178 million, including about $48 million in tariff refunds. Adjusted operating margin improved to 21.5% from 11.2% a year earlier. Goetter said supply-chain productivity, lower distribution costs, disciplined operating spending and favorable mix offset higher input costs.
Owned inventory ended the quarter at $359 million, down 10% year over year. Goetter said both company-owned and retail inventory were clean entering the holiday season. Management expects Consumer Products revenue to be roughly flat to slightly positive in the fourth quarter, reflecting a difficult comparison tied to prior-year tariff-related changes in shelf-set timing and replenishment orders.
Cocks said the company sees potential for Consumer Products to grow faster than low single digits over the medium term. He cited upcoming product opportunities including Harry Potter, The Legend of Zelda, KPop Demon Hunters, a new Spider-Man film, an Avengers film and the Star Wars 50th anniversary.
Outlook raised and buyback target increased
Hasbro raised its full-year outlook and now expects constant-currency revenue growth of 7% to 9%, with adjusted EBITDA of $1.575 billion to $1.625 billion.
- Wizards revenue is expected to grow 16% to 18%, with operating margins of about 44% to 45%.
- Consumer Products revenue is expected to increase 1% to 3%, with adjusted operating margin of 8% to 10%, including the tariff-refund benefit.
- Entertainment revenue is expected to grow 3% to 5%, with operating margin of about 65%.
Through the first nine months, Hasbro generated $907 million in operating cash flow, up 85% year over year. The company ended the quarter with $851 million in cash and $576 million in short-term investments. It contributed $226 million toward debt reduction and returned $445 million to shareholders through dividends and share repurchases.
Given the stronger cash-flow outlook, Hasbro raised its 2026 share-repurchase target to $400 million from $200 million. The company had repurchased $149 million of stock through the first nine months and said it expects to remain active during the rest of the year.
About Hasbro (NASDAQ:HAS)
Hasbro, Inc is a global branded entertainment company that develops and markets toys, games, entertainment experiences and consumer products. Its portfolio includes well-known brands such as Monopoly, Play-Doh, Transformers, Nerf, My Little Pony, Dungeons & Dragons and Magic: The Gathering.
The company serves consumers through a range of channels, including retail, e-commerce, digital gaming, entertainment content and licensing. Hasbro also works with third-party partners to extend its brands into film and television, apparel, publishing and other consumer products.
