Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Hasbro's turnaround is gaining momentum, powered by a surge in Magic,
Speaker 2: the gathering revenue from the popular card game more than
Speaker 2: doubled in the fourth quarter, boosted by its tie ins
Speaker 2: to other products such as Avatar, The Last Airbender, and
Speaker 2: Final Fantasy, as well Strength and Hasbro's Wizards of the
Speaker 2: Coast and Digital Gaming division, which holds Magic and D
Speaker 2: and D help lift overall sales fourteen percent, underscoring with
Speaker 2: the CFO Gina Getter called a year of strong operational execution.
Speaker 3: Joining us now for more insights.
Speaker 2: Is Hasbro's CEO, Chris Cox. And Chris, you're essentially, you know,
Speaker 2: the designer of this business as it is structured.
Speaker 3: Right now, what do you mean of the quarter?
Speaker 2: Give us your overview, because it looks like Wizards are
Speaker 2: just absolutely crushing it.
Speaker 1: Well, we're really pleased with the quarterly results, and I
Speaker 1: think it's beyond just Wizards. Our licensing businesses up, our
Speaker 1: toy business return to growth, growing seven percent in the quarter,
Speaker 1: and then of course Wizards had just a remarkable quarter
Speaker 1: and a remarkable year sequentially, just growing more and more
Speaker 1: as we went through the year, and we're seeing that
Speaker 1: momentum continue into this year. I think the year was
Speaker 1: really punctuated, as you kind of said in the lead
Speaker 1: up by Magic the Gathering. You know that business is
Speaker 1: over one point seven billion dollars now. It grew nearly
Speaker 1: sixty percent last year, and that's on top of a
Speaker 1: kegger over the last ten years of sixteen percent per year.
Speaker 1: So I think it's a testament to a great team.
Speaker 1: I think it's a testament to a great game and
Speaker 1: a fantastic fandom.
Speaker 4: There has been some signs, not you necessarily, but mattel
Speaker 4: earnings retail sales, that there was weakness in December. I
Speaker 4: know when it comes to divisions like toys you have,
Speaker 4: which I'm sure one Matt Miller's already bought for his
Speaker 4: daughter's tie ups with things like K Pop Demon Hunters.
Speaker 4: What did December look like specifically for that segment. Was
Speaker 4: there some weakness that we've seen elsewhere?
Speaker 3: Well?
Speaker 1: I think I think for us what we saw was
Speaker 1: a sequential improvement as we went through the holiday. We
Speaker 1: had a great Black Friday and Cyber Monday. It was
Speaker 1: a little bit of a dip in like the first
Speaker 1: and second week in December, but then the end of
Speaker 1: the month ended with a real bang, you know. For Hasro,
Speaker 1: our toy division grew share I think eighteen of the
Speaker 1: last twenty weeks of the year, and I think that
Speaker 1: was on the strength of really good entertainment, really quality toys.
Speaker 1: We had a great year for Bayblade transformers, Marble, our
Speaker 1: Pepa Pig business return to growth in the back half,
Speaker 1: and then our board game business did pretty well. What
Speaker 1: I think maybe you're seeing across divergent results across different
Speaker 1: toy companies is really you know, it's tough to say
Speaker 1: there's one toy market. I think it's a tale of
Speaker 1: two cities. I think the companies that are focused on
Speaker 1: gamified entertainment driven multi purchase, multi generational play something we
Speaker 1: call gem square or a lot of people use shorthand
Speaker 1: for kidults, they're really thriving. They're multiples, are strong twenty plus,
Speaker 1: their growth rates are in the mid single digits to
Speaker 1: high single digits, and they're you know, growing with the
Speaker 1: growing marketplace. I think toy companies that are focused more
Speaker 1: on traditional toys, toys aimed at kids, kind of one offs,
Speaker 1: not truly systematized. You know, that's a hit driven business
Speaker 1: without a very strong moat, and I think you're seeing
Speaker 1: it in terms of what their multiples look like and
Speaker 1: contraction in that business.
Speaker 2: By the way, well I read about five at least
Speaker 2: five Peppa Pig books last night.
Speaker 3: Are you a kidult? I object to that, Dad, I
Speaker 3: object to that turn of phrase.
Speaker 2: But I get what you're saying, which is that more
Speaker 2: and more people, you know Danny's age or even my age,
Speaker 2: are buying and playing these kinds of games, especially Wizards
Speaker 2: and the digital games. Does that help to offset business
Speaker 2: that's maybe hurt by tariffs, Chris, because it strikes me
Speaker 2: that those businesses, the cards and the video games aren't
Speaker 2: as hurt by the by the by the taxes on imports.
Speaker 1: Oh yeah, I mean for sure, there's a couple of
Speaker 1: things at play. First off, you know, those collector oriented businesses,
Speaker 1: gamified and adult oriented businesses tend to not be tariff exposed.
Speaker 1: You know, Magic the gathering, the majority of the product
Speaker 1: that we sell in the US is printed in the US,
Speaker 1: so there's no tariffs associated with the digital games don't
Speaker 1: have tariffs because they're public. They're made and published here
Speaker 1: in the US for audiences, So that really helps and
Speaker 1: then last, but not least, because you're dealing with audiences that,
Speaker 1: you know, twenty thirty, forty, in my case, fifty years
Speaker 1: old or more, they tend to have a better personal
Speaker 1: balance sheet. They tend to have, you know, less elasticity
Speaker 1: of demand, and so you just have a bit more
Speaker 1: pricing power even when you have to take prices if
Speaker 1: there's something that's tariff exposed. With kids, you tend to
Speaker 1: be dealing with families on budgets. You know, they're pinching
Speaker 1: pennies a little bit more. You know, parents are always
Speaker 1: going to prioritize their kids, but you know, there's only
Speaker 1: so many dollars to go around during Christmas or Birthday.
Speaker 1: So you know, I think, you know, seventy percent of
Speaker 1: our business, maybe upwards of eighty percent of our business
Speaker 1: are focused on that collector gamified business, and then moving forward,
Speaker 1: probably ninety to ninety five percent of our investment are
Speaker 1: focus there. And I think that's what investors are appreciating
Speaker 1: today about our story.
Speaker 4: So if that's the case, in the success Chris, are
Speaker 4: you going to be making more Magic the Gathering video games?
Speaker 1: Well, we have Magic the Gathering Arena, which has been
Speaker 1: a very successful product for us. It's probably the most
Speaker 1: successful on board to Magic. We will be continuing to
Speaker 1: invest in that platform, and certainly, you know, we have
Speaker 1: probably ten games in development. Magic is certainly an important
Speaker 1: brand for us inside of that pipeline.
Speaker 2: I wanted to ask about your move. You know, I
Speaker 2: visited you guys. I was lucky enough to go to
Speaker 2: Wizards in Seattle, and I also came up to your
Speaker 2: place in Pawtucket, Rhode Island. My first time in Rhode Island.
Speaker 2: But you're you're moving up to Boston or you've moved
Speaker 2: up to Boston, Massachusetts. What drew you to being town
Speaker 2: and and and what do you make of I guess
Speaker 2: they're different tax treatments and different politics there.
Speaker 3: So how have you have you settled in?
Speaker 1: Well, I'd say politically there isn't a huge difference between
Speaker 1: Rhode Island and Massachusetts, so that wasn't a real fact
Speaker 1: doctor for us. You know, Hasbro has deep roots across
Speaker 1: New England, particularly in Massachusetts. Milton Bradley was founded there
Speaker 1: back in eighteen sixty. Parker Brothers was founded in Salem, Massachusetts,
Speaker 1: I think back in the eighteen nineties. So we're no
Speaker 1: strangers to Boston. You know, really what we were looking
Speaker 1: for is we were looking for a bigger market in
Speaker 1: terms of the number of people that we could recruit.
Speaker 1: You know, Boston is roughly eight to nine times the
Speaker 1: size of you know, the of Pawtucket and certainly Providence,
Speaker 1: where we've been based. And then it's just easier access.
Speaker 1: You know, a big part of our business is partnership.
Speaker 1: It's partnership with retailers, it's partnership with licensers. We have
Speaker 1: over one thousand partners crossing five thousand collaborations. And it's
Speaker 1: nice to be in a major travel hub like Boston
Speaker 1: because it just makes it easier for us to be
Speaker 1: accessible and easier for us to get to our partners
Speaker 1: as well.
Speaker 2: Chris, by the way, is no stranger to Boston, or
Speaker 2: I should say to Cambridge, okay, right, because you went
Speaker 2: to Harvard.
Speaker 3: Oh, no big deal, no big deal. And by the way,
Speaker 3: he played football at Harvard. See.
Speaker 2: I used to think Magic and D and D were
Speaker 2: like games for nerds, But I meet people like Chris
Speaker 2: and Gina Getter who used to work at Harley Davidson.
Speaker 2: I met like the strongest man in the world in
Speaker 2: Seattle who is like the head of their magic division there.
Speaker 4: So my cousin loves magic the gathering and he is awesome, which,
Speaker 4: by the way, doesn't mean that you're not a nerd, Chris,
Speaker 4: because nerds are fantastic and wonderful people. So I don't
Speaker 4: think we should brandish that label. Hey, just before you
Speaker 4: go on this topic of Rhode Island versus Massachusetts, because
Speaker 4: Rhode Island at the moment is debating this millionaire attack
Speaker 4: something that Massachusetts already has something similar as a CEO.
Speaker 3: How do you feel about that?
Speaker 4: Does it change at all the business environments or is
Speaker 4: it something you support? How do you think about that?
Speaker 1: Well, I try not to make business decisions based on
Speaker 1: my personal finances or personal situation. You know, moving to
Speaker 1: Boston had a lot of talent advantages, it had a
Speaker 1: lot of transportation advantage, and it's just a big, dynamic city.
Speaker 1: So that's really how we thought about that. We actually
Speaker 1: have a dual HQ, So Boston is one side of
Speaker 1: our HQ, Seattle's the other, and that just represents kind
Speaker 1: of where our business is. Boston really anchors toys and licensing,
Speaker 1: and Seattle anchors are our gaming business.
Speaker 4: Hey, Chris, we really appreciate your time today has we're
Speaker 4: a CEO Chris Cox. Please come join us again soon