WEBVTT - Hasbro CEO Chris Cocks Talks 2026 Outlook, Earnings

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<v Speaker 1>Welcome to our global TV and radio audiences. I'm Danny

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<v Speaker 1>Berger alongside Isabelle Lee and Danielle Paully. Hasborrough shares are

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<v Speaker 1>surging after the company raised It's for your outlook, topping

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<v Speaker 1>second quarter expectations. With Magic the Gathering once again driving growth,

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<v Speaker 1>the franchise topped five hundred million dollars in quarterly revenue

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<v Speaker 1>for the first time in its thirty eight plus year history.

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<v Speaker 1>Joining US now is Hasbroro CEO Chris Cox. Chris, wonderful

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<v Speaker 1>to have you on. Congratulations for this milestone, and I

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<v Speaker 1>know that this has been a huge part of your

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<v Speaker 1>growth strategy and it's paying off with Magic the Gathering.

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<v Speaker 1>But I do have to start on asking. Last time

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<v Speaker 1>you and I had spoken, one of the other big

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<v Speaker 1>parts of your growth strategy was your video game division.

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<v Speaker 1>But you've now announced that you're canceling multi multiple video

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<v Speaker 1>game projects. Can you just walk us through the thinking.

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<v Speaker 2>Well, I think most video game companies in a given

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<v Speaker 2>year will have the variety of products in different stages

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<v Speaker 2>of development, and we're no different. I think what we

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<v Speaker 2>did is over the last sixty nine months, we took

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<v Speaker 2>a relook at our portfolio and said, Okay, what can

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<v Speaker 2>Hasbro be best in the world at what can we

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<v Speaker 2>uniquely do differently than anyone else? And we decided to refocus,

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<v Speaker 2>and you know, the decision we made was trading card.

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<v Speaker 3>Games and role playing games.

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<v Speaker 2>We're really vital to franchises like Magic the Gathering and

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<v Speaker 2>D and D. We're doubling down on those, but other

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<v Speaker 2>categories like strategy games, action stealth. You know, we work

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<v Speaker 2>with over one thousand partners around the world with a

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<v Speaker 2>very large licensing business. Were the number one digital licenser

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<v Speaker 2>in the world, working with nearly one hundred partners. We

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<v Speaker 2>can work with those kinds of partners who are experts

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<v Speaker 2>in those genres and create a real one two punch

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<v Speaker 2>Hasbro being a leader in TCGs and RPGs and then

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<v Speaker 2>our partners really helping to extend our brands elsewhere. And

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<v Speaker 2>that's really kind of what today's messaging was all about.

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<v Speaker 4>And sticking with games, how are you using AI when

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<v Speaker 4>you develop these?

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<v Speaker 2>AI is still pretty early days. We use it across

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<v Speaker 2>the company mostly for productivity. Our toy division does it

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<v Speaker 2>for some concepting, but at the end of the day,

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<v Speaker 2>a human is driving all the taste decisions and the

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<v Speaker 2>ultimate execution inside of games and video games, I would

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<v Speaker 2>say AI is basically not used at all.

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<v Speaker 3>You know, will that change over time. I think we'll

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<v Speaker 3>look at what.

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<v Speaker 2>The state of the tools are, where the industry is going,

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<v Speaker 2>and certainly we will use what makes sense. I think

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<v Speaker 2>the video game industry has a real history of being

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<v Speaker 2>an early technology adopter, and you know, we'll take our

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<v Speaker 2>marks from what the best in the business are doing.

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<v Speaker 4>What are you seeing with respect to consumer behavior or

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<v Speaker 4>demand that's maybe not yet showing up in the data,

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<v Speaker 4>but that you're planning for.

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<v Speaker 2>Well, gosh, I think the biggest thing that we're seeing

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<v Speaker 2>is this boom in these categories that we call GEM squared,

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<v Speaker 2>those categories that are aimified, entertainment driven, multi purchase and

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<v Speaker 2>multi generational. You know, I think other companies maybe call

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<v Speaker 2>it kid elks. That's been a power trend over the

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<v Speaker 2>last couple of years, and we certainly see it taking

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<v Speaker 2>off moving forward. I think you're seeing that in strength

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<v Speaker 2>with Magic the gathering. You're seeing that with you know,

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<v Speaker 2>growth that we have in Marvel and Star Wars, which

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<v Speaker 2>is really fan generated. You know, the kid business continues

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<v Speaker 2>to be good, but fans are really what's being explosive

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<v Speaker 2>in that and with new initiatives like we're seeing with

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<v Speaker 2>you know, traditionally kid products like Plato, with what we're

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<v Speaker 2>doing with a new product called Blooms, which is, you know,

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<v Speaker 2>an ability for older consumers to create beautiful bouquets of

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<v Speaker 2>bouquets of flowers, to build and display. I think that

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<v Speaker 2>build and display dynamic, that play being more than just

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<v Speaker 2>something for kids, collection, being more than something for just

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<v Speaker 2>nerds like myself, but broader. I think that's powering the

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<v Speaker 2>entire play industry right now, and as a power trend

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<v Speaker 2>that I don't think is going to go away anytime soon.

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<v Speaker 1>Can I just say I think nerds is better than Kittles,

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<v Speaker 1>Like I would rather be referred to as a nerd

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<v Speaker 1>than a kindle. I'm just going to put that out there, Chris. Look,

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<v Speaker 1>when it comes to maybe some of the more like

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<v Speaker 1>traditional toys, the things that rely on imports, I know

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<v Speaker 1>this industry has had a lot of volatility, and at

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<v Speaker 1>the moment, the White House has been relying on Section

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<v Speaker 1>one twenty two tariffs that expires this Friday. How are

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<v Speaker 1>you and the team thinking about that expiration? Are you

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<v Speaker 1>looking at any hedging options bracing for anything in particular,

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<v Speaker 1>especially as you start to lock in holiday shipments.

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<v Speaker 2>I think it's been a pretty volatile environment over the

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<v Speaker 2>last couple of years, between trade policy, you know, commodities pricing.

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<v Speaker 3>We've certainly seen that with oil.

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<v Speaker 2>I think our focus is just let's have really good

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<v Speaker 2>solid fundamentals. Let's have a broad based, diversified business where

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<v Speaker 2>we don't rely too much on.

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<v Speaker 3>Any one thing.

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<v Speaker 2>You know, for Hasro, we have Magic the Gathering, which

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<v Speaker 2>is a huge power brand for us. We have a

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<v Speaker 2>huge licensing business that's heavily diversified, and we have a

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<v Speaker 2>gloved toy business. And so I think by having that diversification,

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<v Speaker 2>by having brands that have a variety of different target audiences,

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<v Speaker 2>we're able to weather whatever the market or whatever policies

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<v Speaker 2>are thrown at us. And you know, I think that

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<v Speaker 2>underlies kind of the strength and bullishness of the rays

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<v Speaker 2>that we had for this year and our midterm guide

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<v Speaker 2>for twenty twenty seven and beyond.

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<v Speaker 4>You mentioned Magic, and we know that it keeps driving

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<v Speaker 4>your growth. But do you think Hasbro is becoming too

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<v Speaker 4>reliant on one power franchise.

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<v Speaker 2>Well, I think what you don't see maybe under the

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<v Speaker 2>hood in an artifact of our reporting is just how

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<v Speaker 2>big our licensing business is. Hasro is the third biggest

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<v Speaker 2>licenser in the entire entertainment industry behind I think only

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<v Speaker 2>Warner Brothers today. That's a big business for us. That's

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<v Speaker 2>very profitable, you know. Sizing it, I'd say it's seven

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<v Speaker 2>hundred to seven hundred and fifty million dollars generating operating

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<v Speaker 2>profits in excess to sixty percent. So when you think

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<v Speaker 2>about Magic, that's a big business for us. But when

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<v Speaker 2>you think about that licensing business, that's also another very

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<v Speaker 2>strong leg in our stool.

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<v Speaker 3>And then when you couple with that with a.

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<v Speaker 2>Very diversified toy business that goes across a whole bunch

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<v Speaker 2>of different categories and a whole bunch of different audiences,

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<v Speaker 2>I really think has rose a multi leg story, a

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<v Speaker 2>multi leged growth story, and a multi leged profit story,

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<v Speaker 2>with each of them starting to fire on all cylinders,

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<v Speaker 2>like what you saw last quarter and you saw continue

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<v Speaker 2>into this quarter.

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<v Speaker 4>Yeah, this quarter's revenue was very high, and your business

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<v Speaker 4>has been extremely resilient to what's been going on in

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<v Speaker 4>the broader economy. My question is around the consumer and

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<v Speaker 4>if you're seeing any slow down and spending in any

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<v Speaker 4>particular segments or anything that might impact future revenue.

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<v Speaker 2>I think if you would have asked me that a

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<v Speaker 2>couple quarters ago, we would have said, yeah, you know,

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<v Speaker 2>we were seeing more of a K shaped kind of

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<v Speaker 2>recovery or K shaped consumer behavior. But if anything, we're

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<v Speaker 2>seeing broadening strengthen the consumer. You know, we're seeing across

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<v Speaker 2>price points, We're seeing it across demographics, we're seeing it

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<v Speaker 2>across income groups. The toy industry as a whole is

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<v Speaker 2>up over three percent through May. You know, Hasbro is

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<v Speaker 2>certainly benefiting from that, and it's very broad based across

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<v Speaker 2>multiple retailers, multiple genres, and multiple consumer types. So hey,

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<v Speaker 2>Chris Ivan much point. I just want to jump in

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<v Speaker 2>by the consumer strengthening.

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<v Speaker 1>I just want to jump in just because we have

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<v Speaker 1>forty five seconds left. I know, you know the game

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<v Speaker 1>stop business while you partner with them, any again, just

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<v Speaker 1>quickly here. Any thoughts on Ryan Cohen's attempt to buy eBay.

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<v Speaker 2>No thoughts on game stops overall strategy. I'm glad that

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<v Speaker 2>they're leaning into trading cards and collectible is. They're one

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<v Speaker 2>of our fastest growing accounts, and so we're partnering with

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<v Speaker 2>them closely on.

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<v Speaker 1>That very well diplomatically answered love that, Chris, thank you

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<v Speaker 1>so much for joining US. Hasboro's CEO, Chris Cox