00:00CEO Chris Cox joins us now. And Chris it's great to have you on the program. Great talk Hasbro again.
00:08I wonder if there's a risk that many
00:09investors don't really understand your business model and the products in which you see the most growth since they're concerned
00:17about
00:18more concerned about maybe the petroleum intensive toys with which they associate normally Hasbro and the industry.
00:27Yeah, well, I'd certainly say we have some exposure to petroleum, but it's relatively light. The majority of our business
00:35is games which are made of paper and frankly domestically sourced and then licensing and digital which is just bits
00:43and bytes. So, you know, that's the vast majority of our business and the vast majority of where our growth
00:49has been coming from. And, you know, you can never make promises and guarantees about the future.
00:55But when you look at a business like Magic, it's grown on average 16% per year for the last
01:0110 years and just clocked in over 20% in our first quarter. So we're starting off the year pretty
01:06good.
01:06Yeah, 26% was the growth at Wizards, which because I'm familiar with the business. I have been at your
01:13headquarters, Wizards headquarters in Seattle as well as your headquarters here on the East Coast.
01:20I understand how much that accounts for. I think more than half of quarterly revenue and growing at a strong
01:29clip. Have investors just misunderstood the story of Hasbro?
01:39I'm not sure. I don't think I'm just looking at the nine percent or now seven and a half percent
01:44drop and wondering why the sell off. You know, we're worried about inflation. We're worried about the consumer.
01:49But it seems like those who are buying your IP continue to do so.
01:55Well, I mean, I would look at a down day like today as a buying opportunity, frankly.
02:01You know, I think we have a lot of strong structural advantages. You know, when you think about Hasbro, you
02:08need to think about it being a collector's gaming and IP company.
02:12And those are all growth businesses. You know, we frame our opportunity in terms of audience and category in an
02:20acronym called Gem Squared.
02:22And so those are categories that are gaming driven, entertainment driven, multi-purchase and multi-generational.
02:29In 2025, categories that we define as Gem Squared were up 22 percent versus the rest of the toy industry
02:36was down 3 percent.
02:38And most of our capital, most of our brands, most of our growth is invested behind those Gem Squared insights
02:46and those Gem Squared brands.
02:47You saw it in Q1 where, you know, we grew 13 percent.
02:52You see it in our guidance where we're projecting, you know, kind of a mid-single-digit growth rate for
02:58the company.
02:59And you see it in the bottom line where our profits have never been stronger and our profit growth and
03:05our profit margins are some of the best in the industry.
03:08Chris, I think if I may, at least it seems like the analyst community's reaction is kind of what you're
03:12talking about, this idea that your growth has been so strong, 13 percent in the first quarter.
03:17I mean, look at last year, the success and growth of Magic the Gathering.
03:21Why is there like a slight step down to the single digits?
03:24What sort of changes as the year goes on that you don't get that like, you know, low teens growth
03:29and success that you've seen?
03:31Well, I think we're a diversified business.
03:33I think, you know, we always start the year with a tempered outlook about what we think the business can
03:40do.
03:40And, you know, we like to we like to we like to under promise and over deliver, which is something
03:46that I think we've done now for nine, maybe 10 quarters and consistent consistently.
03:52I think that's good for investors.
03:53I think that's good for our internal teams.
03:55And I think that's good for our fans.
03:57We have, I guess, a bit of a fanboy in our producer, Will Shaker, in the control room.
04:02He's writing, tell me about the movies, guys.
04:03So you have a big theatrical slate coming, right?
04:06Star Wars, another edition there.
04:08Toy Story.
04:09I think it's the fifth one, Spider-Man Avengers.
04:13What do you expect from that in terms of toy sales, which are, you know, the obviously the resin, the
04:19petroleum based products are getting hit with cost pressures.
04:24But I would imagine you'll have some pricing power as well here.
04:29Yeah, yeah.
04:30And we do.
04:31You know, our we think $100 barrel oil has about a $30 million cost headwind for us.
04:37But I think you have to look at that in the context of a business that generates $1.4 to
04:42$1.45 billion in EBITDA per year.
04:45So it's a relatively manageable set of cost pressures for us that we can offset inside of a large and
04:53diversified set of operations.
04:54And I think you're right.
04:55Our entertainment slate is second to none.
04:58We've got The Mandalorian and Grogu opening this weekend, the first big new Star Wars movie, I think in seven
05:03years.
05:05You know, so far, toy sales for that have been selling at a robust clip, including one of the coolest
05:11toys we've ever made, the Ultimate Grogu, which is a $599 super high-end animatronic collectible.
05:20Then we have Toy Story 5, which is always great for our official company mascot, Mr. Potato Head and his
05:28family.
05:29Those sales always go through the roof on that.
05:31Then we have Spider-Man, a brand-new day, which is the first Spider-Man movie in a couple years.
05:37And, you know, based on early previews that we've seen, it looks fantastic.
05:42And then we're going to cap the year off with The Avengers Doomsday, which is, like, bringing back all the
05:49original cast and really propelling that story forward.
05:52So I think from an entertainment perspective, certainly in the short term, we look fantastic.
05:57And I think the story only gets better in the midterm.
06:00You know, next year we have the Star Wars 50th anniversary.
06:03We have Star Wars Starfighter.
06:05We have more Marvel superheroes films.
06:08And then Hasbro's entertainment slate is just starting to cook.
06:12You know, we're going to have, you know, I think we have something like 60 projects in the hopper.
06:17And next year we'll have the debut of our new Magic Animated series, which I think will help propel Hasbro's
06:24biggest and most profitable brand to all new levels.
06:27You should have, by the way, some kind of golden ticket game where the winner gets to see your headquarters,
06:34the Wizards headquarters on the West Coast.
06:38And then they get to own it and run it.
06:40It's an amazing place.
06:44I was really excited to get to spend some time there.
06:46I want to just ask you finally about Monopoly because it's an age-old property, obviously, and you've done well
06:51online and digitally with Monopoly Go.
06:54But Will says there's potentially a live-action feature film coming out.
07:00Can you tell us about that?
07:01Oh, yeah.
07:02There's a live-action feature film, which we're partnering with Lionsgate and Margot Robbie's Lucky Chap production.
07:10That's been in development now for a year or so, so that should be pretty exciting.
07:15And, you know, certainly Margot is a fantastic talent, both creatively and as an actress.
07:20And then, you know, Monopoly Go continues to cook with gas.
07:24You know, that's the biggest mobile game in history.
07:28It continues to deliver.
07:30Like, to put in context what Monopoly Go does for us, it's basically the equivalent of two blockbuster movies worth
07:38of licensing revenue per year to us.
07:41And that's an annuity that's not just a one-and-done.
07:45That's going to be an annuity that's going to stick with us for a very long time.
07:48And I think it just shows some of the innate advantages inside of Hasbro.
07:53We're very diversified.
07:54We have toys.
07:55We have games.
07:56We have collectibles.
07:57We have a huge digital game business in licensing, a growing one in first-party publishing.
08:03And then we have this great licensing business overall that, you know, spans over 1,000 partnerships, over 5,000
08:11collaborations.
08:12And, you know, it's, like, combined, when you think about digital plus our physical licensing, it creates merchandising of $16
08:22to $18 billion of Hasbro-branded merchandise per year, in addition to the, you know, the $4-ish billion that
08:30Hasbro generates per year.
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