Hasbro Raises 2026 Outlook as Magic Drives 15% Q3 Revenue Growth

Hasbro Inc. (NASDAQ: HAS) raised its full-year 2026 revenue, profitability and adjusted EBITDA guidance after third-quarter sales increased 15%, driven by record performance at Wizards of the Coast and growth in Consumer Products. The quarter also included about $55 million of benefit from tariff refunds, which contributed to the sharp expansion in operating margin.

For 2026, Hasbro now expects constant-currency revenue to increase 7% to 9%, compared with its previous forecast of 5% to 7%. The company projects an adjusted operating margin of 27% to 28%, up from 25% to 26% previously, and adjusted EBITDA of $1.575 billion to $1.625 billion, compared with the prior range of $1.45 billion to $1.50 billion. Its expected adjusted tax rate of 22.5% to 23.5% and capital spending of about $225 million were unchanged.

Third-quarter revenue reached $1.595 billion, up from $1.388 billion a year earlier. Reported operating profit rose 52% to $517.3 million, lifting the GAAP operating margin to 32.4% from 24.6%. Net earnings attributable to Hasbro increased to $394.5 million, or $2.77 per diluted share, from $233.2 million, or $1.64 per share.

On an adjusted basis, operating profit rose 52% to $541.2 million, while adjusted operating margin expanded to 33.9% from 25.6%. Adjusted net earnings were $412.9 million, or $2.90 per diluted share, compared with $238.7 million, or $1.68 per share, a year earlier. Adjusted EBITDA increased 46% to $604.5 million.

Hasbro attributed the operating-profit improvement to higher revenue, favorable business mix and cost productivity. Volume and mix added 5.3 percentage points to the reported operating margin, while cost-of-sales savings net of inflation added 4.4 points. Higher royalties and operating expenses partly offset those gains.

Magic drives Wizards growth

Wizards of the Coast and Digital Gaming remained the main growth engine. Segment revenue increased 31% to $747.2 million, led by Magic: The Gathering releases including The Hobbit and Reality Fracture. Tabletop gaming revenue rose 39% to $613.1 million, while digital and licensed gaming revenue increased 3% to $134.1 million.

Total Magic: The Gathering revenue grew 34% to $616.1 million, marking the franchise’s first quarter above $600 million. Wizards operating profit increased 46% to $367.4 million, and its operating margin widened to 49.2% from 44.0%, reflecting favorable mix and operating leverage from Magic. Hasbro said product development, marketing and other investments were included in the segment’s higher operating expenses.

Consumer Products revenue rose 4% to $827.9 million, supported by Marvel, KPop Demon Hunters and Transformers. Revenue increased 5% in North America, 9% in Asia Pacific and 5% in Latin America, while Europe was unchanged.

The segment’s reported operating profit more than doubled to $173.8 million from $80.1 million. Adjusted operating profit was $177.7 million, versus $88.9 million, and adjusted operating margin expanded to 21.5% from 11.2%. The adjusted result included a $48 million benefit from tariff refunds. Hasbro said productivity savings more than offset unfavorable volume and mix, while its operational-excellence initiatives helped absorb oil and other input-cost inflation.

Entertainment revenue increased 9% to $20.2 million. Adjusted operating profit rose 63% to $18.4 million, although the segment remained a relatively small contributor to consolidated sales.

Nine-month cash generation strengthens

For the first nine months of 2026, Hasbro’s revenue increased 15% to $3.735 billion. Adjusted operating profit rose 35% to $1.110 billion, and adjusted operating margin reached 29.7%, up 438 basis points. Adjusted earnings were $807.4 million, or $5.65 per diluted share.

Wizards revenue increased 28% to $1.993 billion during the period, while Consumer Products grew 3% to $1.689 billion. Entertainment revenue declined 13% to $53.3 million. Nine-month reported and adjusted results included a $56.4 million noncash impairment related to Digital Games, nearly offset by the tariff-refund benefit recognized during the period.

Operating cash flow increased to $907.3 million from $490 million, primarily reflecting Magic revenue growth. Hasbro returned $445 million to shareholders through dividends and share repurchases during the first nine months. The company also deployed $226 million toward debt reduction and prefunding selected maturities and issued $400 million to refinance 2026 maturities and retire higher-cost long-term debt.

Hasbro reported about $105 million of gross cost savings through the first nine months across supply chain, product development and selling, general and administrative expenses. Management said the company remained on track with its 2026 savings commitment and expects about half of gross savings to reach the bottom line, with the remainder helping offset higher royalties and input costs or fund business investment.

The outlook remains subject to risks including tariffs and the timing or amount of related refunds, dependence on manufacturing in China, consumer and retailer spending, product acceptance, foreign-exchange movements and the company’s ability to execute its cost-saving and sourcing-diversification plans. Hasbro also identified risks from unauthorized network access discovered in March 2026; related incremental legal and remediation costs totaled $1 million in the third quarter and $11.8 million for the first nine months.