Hasbro, Inc. HAS reported second-quarter fiscal 2026 results, with earnings and revenues beating the Zacks Consensus Estimate. The top line increased year over year, while the bottom line declined from the previous year.
The quarter benefited from record performance at Wizards of the Coast, led by Magic: The Gathering, along with growth in Consumer Products and a favorable business mix. However, higher tariff costs, disruption related to unauthorized network access, increased operating expenses and weakness in the Entertainment segment partly offset these gains.
HAS’ Q2 Earnings & Revenues
In second-quarter fiscal 2026, HAS reported adjusted earnings of $1.28 per share, which declined 1.5% year over year but surpassed the consensus mark of $1.17 by 9.4%.
Hasbro, Inc. Price, Consensus and EPS Surprise
Hasbro, Inc. price-consensus-eps-surprise-chart | Hasbro, Inc. Quote
Net revenues increased 16.2% year over year to $1.14 billion and topped the consensus estimate of $1.05 billion by 8.94%.
Hasbro’s Wizards Segment Powers Growth
Wizards of the Coast and Digital Gaming revenues increased 27% year over year to $663.8 million. The segment’s performance was driven by strength in Magic: The Gathering and continued growth across digital and licensed gaming. Our model predicted the segment’s revenues to be $564 million.
Operating profit increased 12% to $270 million, while margin declined to 40.7% from 46.3% due to higher investments and a $56 million digital games impairment.
HAS’ Consumer Products Results Stay Mixed
Consumer Products revenues increased 5% year over year to $463 million despite disruption from unauthorized network access. Growth was supported by Star Wars, Marvel and broader category momentum. Our model predicted the segment’s revenues to be $453.7 million.
The segment posted an adjusted operating loss of $7.5 million versus an adjusted operating profit of $1.2 million a year ago, pressured by tariffs, an unfavorable mix, higher costs and seasonality.
Hasbro’s Entertainment Segment Faces Timing Pressure
Entertainment revenues declined 20% year over year to $12.8 million, reflecting the nature and timing of deals. Our model predicted the segment’s revenues to be $19.1 million.
Adjusted operating profit declined 15% to $8.6 million. Despite the lower profit, the adjusted operating margin expanded to 67.2% from 63.1%, supported by the mix of recognized deals.
HAS’ Profitability Reflects Volume and Mix Benefits
Adjusted operating profit increased 14% year over year to $282.2 million, driven by higher sales volume and favorable business mix. Adjusted EBITDA rose 9.4% to $330 million. Our estimate for the metric was $300.7 million.
The adjusted operating margin declined 40 basis points to 24.8% from 25.2%. Benefits from volume, mix, royalties and cost savings were offset by higher operating expenses, changes in the gross-to-net sales rate and nonrecurring items.
Hasbro’s Balance Sheet and Capital Allocation
Cash and cash equivalents were $880.5 million at quarter-end, up from $546.9 million a year earlier. Short-term investments totaled $497.7 million, while inventories declined to $353.2 million from $417.1 million. Long-term debt decreased to $3.04 billion from $3.32 billion.
Hasbro returned $133 million to its shareholders through dividends and share repurchases during the quarter and deployed $55 million toward debt reduction. The company paid $99 million in dividends and declared a quarterly dividend of 70 cents per share.
HAS Raises FY26 Outlook
Management now expects fiscal 2026 revenues to increase 5-7% in constant currency, up from its prior projection of 3-5% growth.
The adjusted operating margin is expected to be 25-26%, compared with the previous forecast of 24-25%. Adjusted EBITDA is projected between $1.45 billion and $1.50 billion, up from the earlier range of $1.40 billion to $1.45 billion.
Hasbro intends to continue investing in its core businesses, returning capital through dividends and share repurchases, and reducing debt.
HAS’ Zacks Rank & Other Key Picks
Currently, Hasbro has a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the Consumer Discretionary sector:
Flexsteel Industries, Inc. FLXS currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
The company delivered a trailing four-quarter earnings surprise of 59%, on average. FLXS stock has surged 88.8% in the year-to-date period. The Zacks Consensus Estimate for Flexsteel’s fiscal 2026 sales and EPS implies growth of 3.8% and 14.6%, respectively, from the year-ago levels.
The Marcus Corporation MCS currently sports a Zacks Rank #1. The company delivered a trailing four-quarter negative earnings surprise of 40.4%, on average. MCS stock has jumped 49.5% in the year-to-date period.
The Zacks Consensus Estimate for Marcus’ 2026 sales and EPS indicates an increase of 6.2% and 211.8%, respectively, from the year-ago levels.
Vince Holding Corp. VNCE currently carries a Zacks Rank of 2. The company delivered a trailing four-quarter earnings surprise of 635.7%, on average. VNCE stock has rallied 56.4% in the year-to-date period.
The Zacks Consensus Estimate for Vince Holding’s 2026 sales and EPS implies growth of 7.2% and 34.1%, respectively, from the year-ago levels.
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Hasbro, Inc. (HAS): Free Stock Analysis Report
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