Hasbro(US:HAS)2026-02-10 14:32Financial Data and Key Metrics Changes - In Q4, net revenue was $1.5 billion, up 31% year-over-year, with adjusted operating profit increasing 180% to $315 million, resulting in a 21.8% operating margin [17][18] - For the full year, net revenue grew 14% to $4.7 billion, with adjusted operating profit increasing 36% to $1.1 billion and an adjusted operating margin of 24.2%, up nearly 400 basis points [18][20] - Adjusted earnings per diluted share were $5.54 for the full year [18] Business Line Data and Key Metrics Changes - Wizards revenue grew 86% to $630 million in Q4, driven by Magic, which was up 141% year-over-year [18][19] - Consumer products revenue in Q4 was $800 million, up 7%, while for the full year, it declined 4% to $2.4 billion [19][20] - Adjusted operating profit for Wizards was $284 million in Q4, resulting in a 45% operating margin, while consumer products delivered an adjusted operating profit of $113 million [19][20] Market Data and Key Metrics Changes - The company reached over 1 billion people annually through its brands, significantly increasing from an initial estimate of 585 million [6][7] - The Wizards Play Network saw a 22% increase in unique players participating in organized play, with over 1 million players by the end of 2025 [10] Company Strategy and Development Direction - The "Playing to Win" strategy focuses on two pillars: play and partnership, aiming to drive growth and profitability [5][6] - The company is expanding its partnerships with major franchises, including Harry Potter and K-Pop, to enhance its product offerings and market reach [8][12] - The company is leveraging AI to improve productivity and innovation, expecting to free up over 1 million hours of lower-value work [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to growth despite market volatility, with expectations for continued momentum in 2026 [16][21] - The company anticipates consolidated revenue growth of 3% to 5% year-over-year for 2026, with operating margins between 24% and 25% [22][24] - Management highlighted the importance of a strong entertainment slate and consumer engagement in driving future growth [22][23] Other Important Information - The company plans to restart share repurchases with a new $1 billion program, reinforcing its commitment to returning capital to shareholders [25] - The company achieved $893 million in operating cash flow and ended the year with $777 million in cash on the balance sheet [21] Q&A Session Summary Question: Magic's growth and future guidance - Management discussed several growth vectors for Magic, including distribution growth and player engagement, indicating a robust pipeline for 2026 [29][31] Question: Partnerships and their impact on growth - Management emphasized the strategic importance of partnerships in driving growth and enhancing brand engagement, with expectations for continued positive impact on revenue [35][39] Question: Wizards' margin performance - Management explained that while margins expanded in 2025, some contraction is expected in 2026 due to increased royalty expenses and costs associated with upcoming video game releases [43][45] Question: Consumer products revenue outlook - Management indicated that consumer products revenue is expected to grow low single digits, supported by a strong entertainment slate from partners [47][49] Question: Digital gaming pipeline - Management highlighted ongoing investments in digital gaming, with expectations for strong performance from upcoming titles like Exodus and Warlock [76][84]