Speaker 1: Welcome to our global TV and radio audiences. I'm Danny
Speaker 1: Berger alongside Isabelle Lee and Danielle Paully. Hasborrough shares are
Speaker 1: surging after the company raised It's for your outlook, topping
Speaker 1: second quarter expectations. With Magic the Gathering once again driving growth,
Speaker 1: the franchise topped five hundred million dollars in quarterly revenue
Speaker 1: for the first time in its thirty eight plus year history.
Speaker 1: Joining US now is Hasbroro CEO Chris Cox. Chris, wonderful
Speaker 1: to have you on. Congratulations for this milestone, and I
Speaker 1: know that this has been a huge part of your
Speaker 1: growth strategy and it's paying off with Magic the Gathering.
Speaker 1: But I do have to start on asking. Last time
Speaker 1: you and I had spoken, one of the other big
Speaker 1: parts of your growth strategy was your video game division.
Speaker 1: But you've now announced that you're canceling multi multiple video
Speaker 1: game projects. Can you just walk us through the thinking.
Speaker 2: Well, I think most video game companies in a given
Speaker 2: year will have the variety of products in different stages
Speaker 2: of development, and we're no different. I think what we
Speaker 2: did is over the last sixty nine months, we took
Speaker 2: a relook at our portfolio and said, Okay, what can
Speaker 2: Hasbro be best in the world at what can we
Speaker 2: uniquely do differently than anyone else? And we decided to refocus,
Speaker 2: and you know, the decision we made was trading card.
Speaker 3: Games and role playing games.
Speaker 2: We're really vital to franchises like Magic the Gathering and
Speaker 2: D and D. We're doubling down on those, but other
Speaker 2: categories like strategy games, action stealth. You know, we work
Speaker 2: with over one thousand partners around the world with a
Speaker 2: very large licensing business. Were the number one digital licenser
Speaker 2: in the world, working with nearly one hundred partners. We
Speaker 2: can work with those kinds of partners who are experts
Speaker 2: in those genres and create a real one two punch
Speaker 2: Hasbro being a leader in TCGs and RPGs and then
Speaker 2: our partners really helping to extend our brands elsewhere. And
Speaker 2: that's really kind of what today's messaging was all about.
Speaker 4: And sticking with games, how are you using AI when
Speaker 4: you develop these?
Speaker 2: AI is still pretty early days. We use it across
Speaker 2: the company mostly for productivity. Our toy division does it
Speaker 2: for some concepting, but at the end of the day,
Speaker 2: a human is driving all the taste decisions and the
Speaker 2: ultimate execution inside of games and video games, I would
Speaker 2: say AI is basically not used at all.
Speaker 3: You know, will that change over time. I think we'll
Speaker 3: look at what.
Speaker 2: The state of the tools are, where the industry is going,
Speaker 2: and certainly we will use what makes sense. I think
Speaker 2: the video game industry has a real history of being
Speaker 2: an early technology adopter, and you know, we'll take our
Speaker 2: marks from what the best in the business are doing.
Speaker 4: What are you seeing with respect to consumer behavior or
Speaker 4: demand that's maybe not yet showing up in the data,
Speaker 4: but that you're planning for.
Speaker 2: Well, gosh, I think the biggest thing that we're seeing
Speaker 2: is this boom in these categories that we call GEM squared,
Speaker 2: those categories that are aimified, entertainment driven, multi purchase and
Speaker 2: multi generational. You know, I think other companies maybe call
Speaker 2: it kid elks. That's been a power trend over the
Speaker 2: last couple of years, and we certainly see it taking
Speaker 2: off moving forward. I think you're seeing that in strength
Speaker 2: with Magic the gathering. You're seeing that with you know,
Speaker 2: growth that we have in Marvel and Star Wars, which
Speaker 2: is really fan generated. You know, the kid business continues
Speaker 2: to be good, but fans are really what's being explosive
Speaker 2: in that and with new initiatives like we're seeing with
Speaker 2: you know, traditionally kid products like Plato, with what we're
Speaker 2: doing with a new product called Blooms, which is, you know,
Speaker 2: an ability for older consumers to create beautiful bouquets of
Speaker 2: bouquets of flowers, to build and display. I think that
Speaker 2: build and display dynamic, that play being more than just
Speaker 2: something for kids, collection, being more than something for just
Speaker 2: nerds like myself, but broader. I think that's powering the
Speaker 2: entire play industry right now, and as a power trend
Speaker 2: that I don't think is going to go away anytime soon.
Speaker 1: Can I just say I think nerds is better than Kittles,
Speaker 1: Like I would rather be referred to as a nerd
Speaker 1: than a kindle. I'm just going to put that out there, Chris. Look,
Speaker 1: when it comes to maybe some of the more like
Speaker 1: traditional toys, the things that rely on imports, I know
Speaker 1: this industry has had a lot of volatility, and at
Speaker 1: the moment, the White House has been relying on Section
Speaker 1: one twenty two tariffs that expires this Friday. How are
Speaker 1: you and the team thinking about that expiration? Are you
Speaker 1: looking at any hedging options bracing for anything in particular,
Speaker 1: especially as you start to lock in holiday shipments.
Speaker 2: I think it's been a pretty volatile environment over the
Speaker 2: last couple of years, between trade policy, you know, commodities pricing.
Speaker 3: We've certainly seen that with oil.
Speaker 2: I think our focus is just let's have really good
Speaker 2: solid fundamentals. Let's have a broad based, diversified business where
Speaker 2: we don't rely too much on.
Speaker 3: Any one thing.
Speaker 2: You know, for Hasro, we have Magic the Gathering, which
Speaker 2: is a huge power brand for us. We have a
Speaker 2: huge licensing business that's heavily diversified, and we have a
Speaker 2: gloved toy business. And so I think by having that diversification,
Speaker 2: by having brands that have a variety of different target audiences,
Speaker 2: we're able to weather whatever the market or whatever policies
Speaker 2: are thrown at us. And you know, I think that
Speaker 2: underlies kind of the strength and bullishness of the rays
Speaker 2: that we had for this year and our midterm guide
Speaker 2: for twenty twenty seven and beyond.
Speaker 4: You mentioned Magic, and we know that it keeps driving
Speaker 4: your growth. But do you think Hasbro is becoming too
Speaker 4: reliant on one power franchise.
Speaker 2: Well, I think what you don't see maybe under the
Speaker 2: hood in an artifact of our reporting is just how
Speaker 2: big our licensing business is. Hasro is the third biggest
Speaker 2: licenser in the entire entertainment industry behind I think only
Speaker 2: Warner Brothers today. That's a big business for us. That's
Speaker 2: very profitable, you know. Sizing it, I'd say it's seven
Speaker 2: hundred to seven hundred and fifty million dollars generating operating
Speaker 2: profits in excess to sixty percent. So when you think
Speaker 2: about Magic, that's a big business for us. But when
Speaker 2: you think about that licensing business, that's also another very
Speaker 2: strong leg in our stool.
Speaker 3: And then when you couple with that with a.
Speaker 2: Very diversified toy business that goes across a whole bunch
Speaker 2: of different categories and a whole bunch of different audiences,
Speaker 2: I really think has rose a multi leg story, a
Speaker 2: multi leged growth story, and a multi leged profit story,
Speaker 2: with each of them starting to fire on all cylinders,
Speaker 2: like what you saw last quarter and you saw continue
Speaker 2: into this quarter.
Speaker 4: Yeah, this quarter's revenue was very high, and your business
Speaker 4: has been extremely resilient to what's been going on in
Speaker 4: the broader economy. My question is around the consumer and
Speaker 4: if you're seeing any slow down and spending in any
Speaker 4: particular segments or anything that might impact future revenue.
Speaker 2: I think if you would have asked me that a
Speaker 2: couple quarters ago, we would have said, yeah, you know,
Speaker 2: we were seeing more of a K shaped kind of
Speaker 2: recovery or K shaped consumer behavior. But if anything, we're
Speaker 2: seeing broadening strengthen the consumer. You know, we're seeing across
Speaker 2: price points, We're seeing it across demographics, we're seeing it
Speaker 2: across income groups. The toy industry as a whole is
Speaker 2: up over three percent through May. You know, Hasbro is
Speaker 2: certainly benefiting from that, and it's very broad based across
Speaker 2: multiple retailers, multiple genres, and multiple consumer types. So hey,
Speaker 2: Chris Ivan much point. I just want to jump in
Speaker 2: by the consumer strengthening.
Speaker 1: I just want to jump in just because we have
Speaker 1: forty five seconds left. I know, you know the game
Speaker 1: stop business while you partner with them, any again, just
Speaker 1: quickly here. Any thoughts on Ryan Cohen's attempt to buy eBay.
Speaker 2: No thoughts on game stops overall strategy. I'm glad that
Speaker 2: they're leaning into trading cards and collectible is. They're one
Speaker 2: of our fastest growing accounts, and so we're partnering with
Speaker 2: them closely on.
Speaker 1: That very well diplomatically answered love that, Chris, thank you
Speaker 1: so much for joining US. Hasboro's CEO, Chris Cox