HASBRO, INC.
For the period ended Sep 27, 2026. Filed Oct 29, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 27, 2026 · Filed Oct 29, 2026
HAS$118.91-0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-28; filed 2026-07-30.
0000046080-26-000050
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-27; filed 2026-10-29.
0000046080-26-000065
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 148 previous paragraphs and 152 current paragraphs.
66 unchanged; 69 reworded; 17 added; 10 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
•The introduction of Blooms by Play-Doh, the first-ever Play-Doh line designed specifically for adults.
Current report
During the three and nine months ended September 27, 2026, Hasbro recorded a total of $54.5 million of tariff recoveries as a reduction to Cost of sales within the Consolidated Statements of Operations. Of this amount, $41.5 million was received as cash, with the remainder recorded as a receivable within Prepaid expenses and other current assets on the Consolidated Balance Sheets. The Company expects to receive the remaining $13.0 million of Phase 2 and Phase 3 IEEPA tariff refunds within the next six months. These amounts could further impact our results in 2026 and, to a lesser extent, 2027.
Current report
(1)Prior period amounts have been reclassified to present licensing revenue separately from net sales in the Consolidated Statements of Operations. The reclassification had no effect on total net revenues, operating profit (loss), net earnings (loss) or shareholders’ equity. Refer to Note 1, Basis of Presentation, for additional information.
Current report
NET REVENUES
Current report
Net sales– Net sales for the third quarter of 2026 increased 17.5% to $1,451.0 million from $1,234.9 million for the third quarter of 2025 primarily driven by growth in the Wizards of the Coast and Digital Gaming segment, which experienced a $156.7 million increase in net sales related to Magic: The Gathering. This growth within the Wizards of the Coast and Digital Gaming segment was supplemented by an increase in net sales within the Consumer Products segment, driven by an increase in toy and game sales for Marvel of $46.8 million as a result of a strong content slate, along with the introduction of new toys and games for the recently acquired KPop Demon Hunters license, which drove an increase of $13.3 million.
Current report
Licensing revenue– Licensing revenue for the third quarter of 2026 was $144.3 million, or 9.0% of total net revenues, compared to $152.6 million, or 11.0% of total net revenues, for the third quarter of 2025. The change was primarily driven by lower consumer products licensing revenue, particularly related to Peppa Pigand Nerf, partially offset by growth in Transformers. Licensing revenue consists of royalties earned from the out-licensing of our trademarks, characters and other brand and intellectual property rights.
Current report
Advertising– Advertising expense for the third quarter of 2026 was $96.2 million, or 6.0% of net revenues, compared to $108.3 million, or 7.8% of net revenues, for the third quarter of 2025. The Advertising expense decrease during the third quarter of 2026 was driven by declines in both the Wizards of the Coast and Digital Gaming and Consumer Products segments based on the timing of advertising campaigns.
Current report
Selling, distribution and administration– Selling, distribution and administration expenses increased to $331.5 million, or 20.8% of net revenues for the third quarter of 2026, from $287.3 million, or 20.7% of net revenues, for the third quarter of 2025. The increase in Selling, distribution and administration expenses during the third quarter of 2026 is primarily the result of increases in personnel related costs, including increased severance expense corresponding to our Operational Excellence program, partially offset by a nonrecurring $4.7 million gain on the sale of a facility.
Current report
Wizards of the Coast and Digital Gaming segment net revenues increased 30.6% in the third quarter of 2026 to $747.2 million from $572.0 million in the third quarter of 2025. The net revenue increase in the Wizards of the Coast and Digital Gaming segment during the third quarter of 2026 was primarily attributable to growth in Tabletop Gaming revenue of $171.3 million, or 38.8%, behind demand for Magic: The Gathering, which exceeded $600 million of quarterly revenue for the first time in brand history, fueled by The Hobbit and Reality Fracture.
Current report
Consumer Products segment Operating profit for the third quarter of 2026 was $173.8 million, or 21.0% of segment net revenues, compared to a segment Operating profit of $80.1 million, or 10.1% of segment net revenues, for the third quarter of 2025. The change in Operating profit in the third quarter of 2026 was driven by the increase in net revenues, as discussed above, as well as a decrease of approximately $59.2 million of cost related to the impacts of tariffs, inclusive of both the recording of $47.9 million of IEEPA tariff benefit during the quarter, as well as a decrease in recurring tariff expense of approximately $11.3 million when compared to the prior year. Operating profit for the third quarter of 2026 was also impacted by a nonrecurring $4.7 million gain on the sale of a facility. In addition, Operating profit also benefitted from lower managed expenses and advertising expense, reflecting productivity initiatives.
Current report
Entertainment segment Operating profit was $17.1 million, or 84.7% of segment net revenues for the third quarter of 2026, compared to an Operating profit of $7.5 million, or 40.3% of segment net revenues for the third quarter of 2025. The increase in Operating profit in the Entertainment segment during the third quarter of 2026 was primarily driven by the increase in revenue, as discussed above, and a favorable licensing mix, as well as a decrease in program cost amortization and the amortization of intangible assets.
Current report
Corporate and other expense, net was $41.0 million for the third quarter of 2026 compared to Corporate and other income, net of $2.0 million for the third quarter of 2025. The change in Corporate and other in the third quarter of 2026 as compared to the third quarter of 2025 primarily reflects the impacts of increases in personnel related costs, including increased severance expense corresponding to our Operational Excellence program.
Current report
(1)Prior period amounts have been reclassified to present licensing revenue separately from net sales in the Consolidated Statements of Operations. The reclassification had no effect on total net revenues, operating profit (loss), net earnings (loss) or shareholders’ equity. Refer to Note 1, Basis of Presentation, for additional information.
Current report
NET REVENUES
Current report
Net sales– Net sales for the first nine months of 2026 increased 17.6% to $3,317.9 million from $2,821.1 million for the first nine months of 2025 primarily driven by growth in the Wizards of the Coast and Digital Gaming segment, most notably an increase of $413.2 million related to Magic: The Gathering, particularly stemming from increased demand for sets such as Secrets of Strixhaven, as well as Universes Beyond sets such as Marvel Super Heroesand The Hobbit. This growth within the Wizards of the Coast and Digital Gaming segment was supplemented by an increase in net sales within the Consumer Products segment, driven by an increase in toy and game sales for Marvel of $55.3 million and Star Warsof $23.7 million as a result of a strong content slate, along with the introduction of new toys and games for the recently acquired KPop Demon Hunters license of $14.2 million. These increases were partially offset by an $8.0 million, or 13.1%, decrease in the Entertainment segment.
Current report
Licensing revenue– Licensing revenue for the first nine months of 2026 was $417.2 million, or 11.2% of net revenues, compared to $434.3 million, or 13.3% of net revenues, for the first nine months of 2025. The change was primarily driven by lower consumer products licensing revenue, including the lapping of licensing revenue related to My Little Pony of approximately $11.1 million, partially offset by growth in digital licensing revenue.
Current report
OPTIMIZE BRANDS: Net revenues in the Optimize Brands portfolio were relatively flat, decreasing $1.3 million, or 0.2%, in the first nine months of 2026, compared to the first nine months of 2025. Net revenues in this category include brands such as Play-Doh, Transformers, Duel Masters and G.I. Joe.
Removed paragraphs (10)
Previous report
On February 20, 2026, the U.S. Supreme Court issued a ruling against the International Emergency Economic Powers Act ("IEEPA") tariffs that we and other companies paid to the U.S. government since the enactment on April 2, 2025. In the third quarter of 2026, we made our first application to the U.S. Customs and Border Protection ("CBP") agency seeking a refund for a majority of the IEEPA tariffs we paid, and we plan to submit additional applications later this year when we are permitted. The ultimate timing and amounts received is uncertain and subject to processing by the CBP. These amounts could impact our results in 2026.
Previous report
The Company's revenue increased from $1,867.9 million for the six months ended June 29, 2025 to $2,139.8 million for the six months ended June 28, 2026. The increase in revenue is driven primarily by growth in our Wizards of the Coast and Digital Gaming segment, specifically within tabletop gaming.
Previous report
Net revenues– Net revenues for the second quarter of 2026 increased 16.2% to $1,139.6 million from $980.8 million for the second quarter of 2025 primarily driven by growth of $141.4 million, or 27.1%, in the Wizards of the Coast and Digital Gaming segment and $20.6 million, or 4.7%, in the Consumer Products segment. This growth was partially offset by a $3.2 million, or 20%, decrease in the Entertainment segment. See the Segment Results discussion below for further details.
Previous report
Selling, distribution and administration– Selling, distribution and administration expenses increased to $338.7 million, or 29.7% of net revenues for the second quarter of 2026, from $282.8 million, or 28.8% of net revenues, for the second quarter of 2025. The increase in Selling, distribution and administration expenses during the second quarter of 2026 is primarily the result of a one-time $56.4 million non-cash impairment charge related to the Company's decision to refocus the Digital Games portfolio, which included the cancellation of certain titles scheduled for release in 2028 and beyond, as well as $10.8 million of incremental costs incurred as a result of the unauthorized network access, partially offset by benefits from cost savings initiatives that have occurred over the last 12 months.
Previous report
Wizards of the Coast and Digital Gaming segment net revenues increased 27.1% in the second quarter of 2026 to $663.8 million from $522.4 million in the second quarter of 2025. The net revenue increase in the Wizards of the Coast and Digital Gaming segment during the second quarter of 2026 was primarily attributable to an increase in Tabletop Gaming revenue which grew 30.0% behind demand in Magic: The Gathering, driven by the release of the Secrets of Strixhavenand Universes Beyond Marvel Super Heroes sets. This growth was accompanied by an increase in digital licensing revenue related to Monopoly Go!, which contributed $44.2 million of revenue during the quarter.
Previous report
Consumer Products segment operating loss for the second quarter of 2026 was $14.5 million, or 3.1% of segment net revenues, compared to a segment operating loss of $1,029.5 million, or 232.7% of segment net revenues, for the second quarter of 2025. The change in operating loss in the second quarter of 2026 was driven primarily by the non-cash goodwill impairment charge of $1,021.9 million recorded during the second quarter of 2025, offset by tariff costs of approximately $6.2 million.
Previous report
Entertainment segment operating profit was $5.6 million, or 43.8% of segment net revenues for the second quarter of 2026, compared to an operating profit of $6.1 million, or 38.1% of segment net revenues for the second quarter of 2025. The decrease in operating profit in the Entertainment segment operating results during the second quarter of 2026 was primarily driven by the decrease in revenue discussed above.
Previous report
Corporate and Other operating loss was $8.6 million for the second quarter of 2026 compared to an operating loss of $16.7 million for the second quarter of 2025. The change in operating loss in the second quarter of 2026 as compared to the second quarter of 2025 primarily reflects the impacts of cost saving initiatives at the Company over the last 12 months, partially offset by incremental costs incurred related to the unauthorized network access described above.
Previous report
Net revenues– Net revenues for the first six months of 2026 increased 14.6% to $2,139.8 million from $1,867.9 million for the first six months of 2025, primarily driven by a $261.3 million, or 26.5%, increase in the Wizards of the Coast and Digital Gaming segment as well as a $20.2 million, or 2.4%, increase in the Consumer Products segment, offset by a $9.6 million, or 22.5%, decrease in the Entertainment segment. See the Segment Results discussion below for further details.
Previous report
OPTIMIZE BRANDS: Net revenues in the Optimize Brands portfolio decreased $12.1 million, or 4.2%, in the first six months of 2026, compared to the first six months of 2025. The net revenue decrease is primarily driven by lower net revenues from Transformers, Play-Doh, and Duel Masters. The declines were partially offset with an increase in net revenue from GI Joe.
Reworded paragraphs (69)
Previous wording
In the first half of 2026, we've made exciting new steps on executing the Playing to Win strategy, including:
Current wording
During the first nine months of 2026, we've made exciting new steps on executing the Playing to Win strategy, including:
Previous wording
•The release of Marvel Super Heroes, along with all past and future Marvel sets, within Magic: The Gathering Arena, allowing players to jump into the Marvel Universe through Hasbro's online adaption of the iconic Magic: The Gathering card game.
Current wording
•The release of Marvel Super Heroes, along with all past and future Marvel sets, within Magic: The Gathering Arena, allowing players to jump into the Marvel Universe through Hasbro's online adaptation of the iconic Magic: The Gathering card game.
Previous wording
Significant changes in trade policy announced by the U.S. government could adversely impact our forward-looking financial results. The Company monitors the impact of tariffs to its business operations on an ongoing basis and may need to implement actions such as price adjustments or making changes in our supply chain sourcing strategies in order to mitigate the impact of tariffs in future periods. The impacts of tariffs may lead to reduced economic activity, increased costs, reduced demand and changes in purchasing behaviors for some or all of our products, actual or potential impairments, write-downs or unrealizability of some of our existing assets, or other economic outcomes that could have a material adverse impact on our sales volumes, prices, and our financial results. During the first three and six months of 2026, the Company recognized approximately $9.4 million and $17.7 million of tariff costs within Cost of sales, respectively.
Current wording
Significant changes in trade policy announced by the U.S. government could adversely impact our forward-looking financial results. The Company monitors the impact of tariffs to its business operations on an ongoing basis and may need to implement actions such as price adjustments or making changes in our supply chain sourcing strategies in order to mitigate the impact of tariffs in future periods. The impacts of tariffs may lead to reduced economic activity, increased costs, reduced demand and changes in purchasing behaviors for some or all of our products, actual or potential impairments, write-downs or unrealizability of some of our existing assets, or other economic outcomes that could have a material adverse impact on our sales volumes, prices, and our financial results.
Previous wording
The impacts of these system disruptions included order processing, shipping, and invoicing delays, resulting in a negative impact on net sales and operating profit during the second quarter, particularly within the Consumer Products segment. As of June 28, 2026, the Company has since returned to pre-incident order processing, shipping, and invoicing practices.
Current wording
The impacts of these system disruptions included order processing, shipping, and invoicing delays, resulting in a negative impact on net sales and operating profit during the second quarter, particularly within the Consumer Products segment. For the entirety of the third quarter, the Company was able to operate under pre-incident order processing, shipping, and invoicing practices.
Previous wording
The Company also incurred incremental expenses of approximately $10.8 million during the three and six months ended June 28, 2026 as a result of the unauthorized network access, including for third-party IT recovery and forensic experts, professional services and other costs incurred to investigate and remediate the attack. The Company expects to incur a less significant amount of additional costs related to the incident in future periods. The Company has not recognized any insurance proceeds during the three months ended June 28, 2026 related to the unauthorized network access. The timing of recognizing insurance recoveries, if any, may differ from the timing of recognizing the associated expenses.
Current wording
The Company incurred incremental expenses of approximately $1.0 million and $11.8 million, respectively, during the three and nine months ended September 27, 2026 as a result of the unauthorized access, including for third-party IT recovery and forensic experts, professional services and other costs incurred to investigate and remediate the attack. The Company expects to incur a less significant amount of additional costs related to the incident in future periods. The Company did not recognize any insurance proceeds during the three and nine months ended September 27, 2026 related to the unauthorized network access. The timing of recognizing insurance recoveries, if any, may differ from the timing of recognizing the associated expenses.
Previous wording
The Company's revenue increased from $980.8 million for the three months ended June 29, 2025 to $1,139.6 million for the three months ended June 28, 2026. The increase in revenue is driven primarily by growth in our Wizards of the Coast and Digital Gaming segment, specifically within tabletop gaming driven by Magic: The Gathering.
Current wording
The Company's net revenues were $1,595.3 million and $3,735.1 million for the three and nine months ended September 27, 2026, respectively, as compared to $1,387.5 million and $3,255.4 million for the three and nine months ended September 28, 2025, respectively. The increase in net revenues for both periods was driven primarily by growth in our Wizards of the Coast and Digital Gaming segment, specifically within Tabletop Gaming attributable to Magic: The Gathering.
Previous wording
The Company recorded an operating profit of $252.5 million and $522.8 million for the three and six months ended June 28, 2026, respectively, as compared to an operating loss of $798.2 million and $627.5 million for the three and six months ended June 29, 2025, respectively. The change in operating profit was driven by the improved revenue growth discussed above, as well as a one-time $1,021.9 million non-cash goodwill impairment recorded in the Consumer Products segment in the second quarter of 2025. No such impairment occurred during the three and six months ended June 28, 2026.
Current wording
The Company recorded an operating profit of $517.3 million and $1,040.1 million for the three and nine months ended September 27, 2026, respectively, as compared to an operating profit of $341.1 million and an operating loss of $286.4 million for the three and nine months ended September 28, 2025, respectively. The increase in operating profit for both periods was the result of revenue growth discussed above, as well as the recording of $54.5 million of IEEPA tariff refunds during the third quarter of 2026. The increase in Operating profit for the nine months ended September 27, 2026 was also impacted by a one-time $1,021.9 million non-cash goodwill impairment recorded in the Consumer Products segment in the second quarter of 2025 which did not recur in 2026, partially offset by a one-time $56.4 million non-cash impairment charge in the second quarter of 2026 related to the Company's decision to refocus the Digital Games portfolio.
Previous wording
See below for further discussion on the consolidated and segment results of operations for the three and six months ended June 28, 2026 and June 29, 2025.
Current wording
See below for further discussion on the consolidated and segment results of operations for the three and nine months ended September 27, 2026 and September 28, 2025.
Previous wording
(1) During the first quarter of 2026, the classification of brands within these categories was reviewed and certain brands were reclassified based on changes in growth, profitability or other characteristics. As such, the respective historical revenues associated within these brands has been reclassified into the brands' new brand category.
Current wording
(1) During the first quarter of 2026, the classification of brands within these categories was reviewed and certain brands were reclassified based on changes in growth, profitability or other characteristics. As such, the respective historical revenues associated within these brands have been reclassified into the brands' new brand category.
Previous wording
GROW BRANDS: Net revenues in the Grow Brands portfolio increased $164.3 million, or 22.2%, in the second quarter of 2026, compared to the second quarter of 2025. The net revenue increase primarily reflects higher net revenues from Magic: The Gathering, which grew by $133.3 million, or 32.3%, driven by strong performance of Secrets of Strixhaven, as well as the Universes Beyond Marvel Super Heroesset released during the quarter. Growth in this category was also impacted by increased demand in toys and games associated with the licensed Marveland Star Wars brands, driven by a strong content slate in 2026 with no comparable releases in the prior year.
Current wording
GROW BRANDS: Net revenues in the Grow Brands portfolio increased $222.9 million, or 23.0%, in the third quarter of 2026 compared to the third quarter of 2025. The net revenue increase primarily reflects higher net revenues from Magic: The Gathering, which grew by $156.7 million, or 34.1%, driven by strong performance of the Universes Beyond The Hobbitset released during the quarter, as well as Reality Fracture. Growth in this category was also impacted by increased demand in toys and games associated with Marvel of $46.8 million, driven by a strong content slate in 2026 with no comparable releases in the prior year.
Previous wording
OPTIMIZE BRANDS: Net revenues in the Optimize Brands portfolio decreased $8.2 million, or 5.1%, in the second quarter of 2026, compared to the second quarter of 2025, driven by lower net revenues from Play-Doh and Duel Masters. The declines were partially offset with an increase in net revenue from GI Joe.
Current wording
OPTIMIZE BRANDS: Net revenues in the Optimize Brands portfolio increased $10.8 million, or 4.2%, in the third quarter of 2026 compared to the third quarter of 2025, driven by higher net revenues from Transformers and Duel Masters, partially offset with a decrease in net revenues from G.I. Joe.
Previous wording
REINVENT BRANDS: Net revenues in the Reinvent Brands portfolio increased $2.7 million, or 3.4%, in the second quarter of 2026 compared to the second quarter of 2025. The net revenue increase is primarily driven by higher product sales for Beybladeand other vault brands, partially offset by lower sales in Nerf and Furby.
Current wording
REINVENT BRANDS: Net revenues in the Reinvent Brands portfolio decreased $25.9 million, or 15.8%, in the third quarter of 2026 compared to the third quarter of 2025. The net revenue decrease is primarily driven by lower product sales for Nerf, Furby, and Nanomals, partially offset by higher sales for Beyblade and other Vault brands.
Previous wording
Cost of sales– Cost of sales for the second quarter of 2026 was $272.4 million, or 23.9% of net revenues, compared to $225.3 million, or 23.0% of net revenues, for the second quarter of 2025. The increase in cost of sales was primarily the result of an increase in net revenues period over period, shift in product mix, as well as approximately $9.4 million of cost related to the impacts of tariffs, primarily as it relates to products imported into the United States to be sold domestically.
Current wording
Cost of sales– Cost of sales for the third quarter of 2026 was $384.8 million, or 24.1% of net revenues, compared to $414.3 million, or 29.9% of net revenues, for the third quarter of 2025. Cost of sales decreased overall and as a percentage of net revenues as a result of a decrease of approximately $64.6 million of cost related to the impacts of tariffs, inclusive of both the recording of $54.5 million of IEEPA tariff refunds during the quarter, as well as a decrease in recurring tariff expense of approximately $10.1 million when compared to the prior year. The Cost of sales decrease was partially offset by an increase in Cost of sales attributable to the increase in net revenues period over period.
Previous wording
Program cost amortization– Program cost amortization decreased to $3.1 million, or 0.3% of net revenues, for the second quarter of 2026 from $6.2 million, or 0.6% of net revenues, for the second quarter of 2025. Program costs are capitalized as incurred and amortized primarily using the individual-film-forecast method which matches costs to the related recognized revenue and is based upon the current slate of entertainment projects.
Current wording
Program cost amortization– Program cost amortization decreased to $5.4 million, or 0.3% of net revenues, for the third quarter of 2026 from $7.4 million, or 0.5% of net revenues, for the third quarter of 2025. Program costs are capitalized as incurred and amortized primarily using the individual-film-forecast method which matches costs to the related recognized revenue and is based upon the current slate of entertainment projects.
Previous wording
Royalties– Royalties for the second quarter of 2026 increased to $89.9 million, or 7.9% of net revenues, compared to $84.5 million, or 8.6% of net revenues, for the second quarter of 2025. The increase in Royalties during the second quarter of 2026 was directly driven by an increase in sales relating to Magic: The Gathering Universes Beyond sets, such as Marvel Super Heroes, as well as increased toy and game sales on licensed brands such as Marvel and Star Wars.
Current wording
Royalties– Royalties for the third quarter of 2026 increased to $142.1 million, or 8.9% of net revenues, compared to $114.3 million, or 8.2% of net revenues, for the third quarter of 2025. The increase in Royalties during the third quarter of 2026 was directly driven by an increase in sales relating to Magic: The Gathering Universes Beyond sets, such as The Hobbit, as well as increased toy and game sales on licensed brands such as Marvel.
Previous wording
Product development– Product development expense for the second quarter of 2026 was $93.6 million, or 8.2% of net revenues, compared to $77.5 million, or 7.9% of net revenues, for the second quarter of 2025. The increase in Product development expense during the second quarter of 2026 was primarily due to the higher incremental investment in the development of Grow Brands under the Company's Playing to Win strategy.
Current wording
Product development– Product development expense for the third quarter of 2026 was $103.4 million, or 6.5% of net revenues, compared to $97.6 million, or 7.0% of net revenues, for the third quarter of 2025. The increase in Product development expense during the third quarter of 2026 was primarily due to the higher incremental investment in the development of Grow Brands under the Company's Playing to Win strategy.
Previous wording
Amortization of intangible assets– Amortization of intangible assets decreased to $14.6 million, or 1.3% of net revenues, for the second quarter of 2026, compared to $17.2 million, or 1.8% of net revenues, for the second quarter of 2025. The amortization expense was driven by the straight-line amortization of the Company's definite-lived intangible assets.
Current wording
Amortization of intangible assets– Amortization of intangible assets decreased to $14.6 million, or 0.9% of net revenues, for the third quarter of 2026, compared to $17.2 million, or 1.2% of net revenues, for the third quarter of 2025. The amortization expense was driven by the straight-line amortization of the Company's definite-lived intangible assets.
Previous wording
Operating profit (loss)– Operating profit for the second quarter of 2026 was $252.5 million, or 22.2% of net revenues, compared to operating loss of $798.2 million, or 81.4% of net revenues, for the second quarter of 2025 driven by the factors discussed above.
Current wording
Operating profit– Operating profit for the third quarter of 2026 was $517.3 million, or 32.4% of net revenues, compared to Operating profit of $341.1 million, or 24.6% of net revenues, for the third quarter of 2025 driven by the factors discussed above.
Previous wording
Interest expense– Interest expense was $46.5 million for the second quarter of 2026, compared to $40.6 million in the second quarter of 2025. Higher interest expense in 2026 is primarily the result of an increase in outstanding debt driven by issuance of the 2031 Notes, partially offset by debt repurchases of the Company's outstanding 2027, 2040, and 2044 Notes.
Current wording
Interest expense– Interest expense was $42.7 million for the third quarter of 2026, compared to $40.8 million in the third quarter of 2025. Higher Interest expense in 2026 is primarily the result of an increase in outstanding debt driven by issuance of the 2031 Notes, partially offset by debt repurchases of the Company's outstanding 2027, 2040, and 2044 Notes.
Previous wording
Interest income– Interest income was $12.9 million for the second quarter of 2026, compared to $5.4 million in the second quarter of 2025. Higher Interest income in 2026 primarily reflects the Company's cash balance and investments in treasury securities, which were substantially higher in 2026 as compared to 2025.
Current wording
Interest income– Interest income was $14.6 million for the third quarter of 2026, compared to $6.3 million in the third quarter of 2025. Higher Interest income in 2026 primarily reflects the Company's cash balance and investments in treasury securities, which were substantially higher in 2026 as compared to 2025, as well as $1.9 million of Interest income earned on previously paid IEEPA tariffs.
Previous wording
Other expense (income), net– Other expense (income), net resulted in expense of $10.2 million for the second quarter of 2026, compared to income of $18.7 million in the second quarter of 2025. The change in Other expense (income), net during 2026 was driven primarily by variations in the movement of foreign currencies in the second quarter of 2026 when compared to the second quarter of 2025.
Current wording
Other expense, net– Other expense, net was $0.1 million for the third quarter of 2026, compared to $1.4 million in the third quarter of 2025. The change in Other expense, net during 2026 was driven primarily by variations in the movement of foreign currencies in the third quarter of 2026 when compared to the third quarter of 2025.
Previous wording
Income tax expense totaled $47.4 million on a pre-tax income of $208.7 million in the second quarter of 2026 compared to an income tax expense of $40.0 million on pre-tax loss of $814.7 million in the second quarter of 2025. Both periods were impacted by discrete tax events.
Current wording
Income tax expense totaled $94.1 million on a pre-tax income of $489.1 million in the third quarter of 2026 compared to an income tax expense of $71.3 million on pre-tax income of $305.2 million in the third quarter of 2025. Both periods were impacted by discrete tax events.
Previous wording
During the second quarter of 2026, the Company recorded a net discrete tax benefit of $1.0 million primarily associated with the release of uncertain tax positions resulting from the expiration of certain international statutes of limitations. During the second quarter of 2025, the Company recorded a non-cash goodwill impairment within the Consumer Products segment of $1,021.9 million with no corresponding tax benefit. Exclusive of the impairment of goodwill, the Company recorded a net discrete tax benefit of $5.9 million, primarily associated with the release of a valuation allowance.
Current wording
During the third quarter of 2026, the Company recorded a net discrete tax benefit of $16.8 million primarily associated with the release of uncertain tax positions resulting from a settlement of an IRS audit. During the third quarter of 2025, the Company recorded a net discrete tax benefit of $5.7 million primarily associated with a benefit related to the impairment of goodwill recorded in the second quarter of 2025.
Previous wording
Absent discrete items, the tax rates for the second quarter of 2026 and 2025 were 23.2% and 22.1%, respectively. The increase in the base rate for the second quarter of 2026 relative to the second quarter of 2025 is primarily due to the mix of jurisdictions where the Company earned its profits.
Current wording
Absent discrete items, the tax rates for the third quarter of 2026 and 2025 were 22.7% and 25.2%, respectively. The decrease in the base rate for the third quarter of 2026 relative to the third quarter of 2025 is primarily due to the mix of jurisdictions where the Company earned its profits and an increased Foreign-Derived Deduction-Eligible Income ("FDDEI") benefit.
Previous wording
(1)% Change is not meaningful ("NM") for these segments
Current wording
(1)% Change is not meaningful ("NM")
Previous wording
Wizards of the Coast and Digital Gaming segment operating profit was $270.0 million, or 40.7% of segment net revenues for the second quarter of 2026, compared to operating profit of $241.9 million, or 46.3% of segment net revenues, for the second quarter of 2025. Operating profit increased during the second quarter of 2026 due to increased net revenues, as discussed above. Operating margin decreased during the second quarter of 2026, primarily driven by a one-time $56.4 million non-cash impairment charge related to the Company's decision to refocus the Digital Games portfolio, which included the cancellation of certain titles scheduled for release in 2028 and beyond.
Current wording
Wizards of the Coast and Digital Gaming segment Operating profit was $367.4 million, or 49.2% of segment net revenues for the third quarter of 2026, compared to Operating profit of $251.5 million, or 44.0% of segment net revenues, for the third quarter of 2025. Operating profit increased during the third quarter of 2026 primarily due to increased net revenues, as discussed above, as well as a decrease in advertising expense and the recording of $6.6 million of IEEPA tariff refunds during the period, partially offset by an increase in royalty expense as a result of increased sales for Magic: The Gathering Universes Beyond sets.
Previous wording
Consumer Products segment net revenues increased to $463.0 million for the second quarter of 2026 compared to $442.4 million for the second quarter of 2025, primarily driven by the timing of retail orders in North America and an enhanced slate of entertainment content releases. The net revenue increase primarily reflects higher net revenues for toys and games, particularly for certain Grow Brands such as Marvel and Star Wars, which were positively impacted by an uptick in demand in advance of major theatrical releases throughout 2026 with no comparable releases in the prior year. The increase in toy and game revenues was partially offset by a decrease in licensing revenues, primarily attributable to the lapping of licensing revenue related to My Little Pony, which decreased $9.7 million.
Current wording
Consumer Products segment net revenues increased to $827.9 million for the third quarter of 2026 compared to $796.9 million for the third quarter of 2025. The net revenue increase primarily reflects higher net revenues for toys and games, particularly for certain Grow Brands such as Marvel, which was positively impacted by an uptick in demand driven by major theatrical releases, such as Spider-Man: Brand New Day, occurring throughout 2026, with no comparable releases in the prior year. Growth in Consumer Products was also driven by the sale of toys and games for KPop Demon Hunters, which were released for the first time in 2026. Consumer Products net revenues also benefitted from growth in Transformers. The increase in toy and game revenues was partially offset by a decrease in licensing revenues, primarily attributable to Peppa Pig and Nerf.
Previous wording
Entertainment segment net revenues decreased 20.0% to $12.8 million for the second quarter of 2026, compared to $16.0 million for the second quarter of 2025. The net revenue decrease in the Entertainment segment during the second quarter of 2026 was driven primarily by the timing of entertainment streaming renewals and other content deals.
Current wording
Entertainment segment net revenues increased 8.6% to $20.2 million for the third quarter of 2026, compared to $18.6 million for the third quarter of 2025. The net revenue increase in the Entertainment segment during the third quarter of 2026 was driven primarily by growth in Family Brands, reflecting the timing of entertainment streaming renewals and other content deals.
Previous wording
The following table presents the consolidated results of operations for the six months ended June 28, 2026 and June 29, 2025:
Current wording
The following table presents the consolidated results of operations for the nine months ended September 27, 2026 and September 28, 2025:
Previous wording
(1)During the first quarter of 2026, the classification of brands within these categories was reviewed and certain brands were reclassified based on changes in growth, profitability or other characteristics. As such, the respective historical revenues associated within these brands has been reclassified into the brands' new brand category.
Current wording
(1)During the first quarter of 2026, the classification of brands within these categories was reviewed and certain brands were reclassified based on changes in growth, profitability or other characteristics. As such, the respective historical revenues associated within these brands have been reclassified into the brands' new brand category.
Previous wording
GROW BRANDS: Net revenues in the Grow Brands portfolio increased $291.0 million, or 20.8%, in the first six months of 2026, compared to the first six months of 2025. The net revenue increase primarily reflects higher net revenues from Magic: The Gathering, which grew by $256.6 million, or 33.8%, driven by strong performance of Lorwyn Eclipsedand Secrets of Strixhaven, as well as Universes Beyond sets such as Teenage Mutant Ninja Turtlesand Marvel Super Heroes, which released within the first six months of 2026. Growth in this category was also impacted by increased demand in toys and games associated with the licensed Marveland Star Wars brands, driven by a strong content slate in 2026 with no comparable releases in the prior year.
Current wording
GROW BRANDS: Net revenues in the Grow Brands portfolio increased $513.9 million, or 21.7%, in the first nine months of 2026, compared to the first nine months of 2025. The net revenue increase primarily reflects higher net revenues from Magic: The Gathering, which grew by $413.2 million, or 33.9%, driven by strong performance of Lorwyn Eclipsedand Secrets of Strixhaven, as well as Universes Beyond sets such as Teenage Mutant Ninja Turtles, Marvel Super Heroesand The Hobbit, which released within the first nine months of 2026. Growth in this category was also impacted by increased demand in toys and games associated with the licensed Marveland Star Wars brands, driven by a strong content slate in 2026 with no comparable releases in the prior year.
Previous wording
REINVENT BRANDS: Net revenues in the Reinvent Brands portfolio decreased $7.0 million, or 4.0%, in the first six months of 2026 compared to the first six months of 2025. The net revenue decrease is primarily driven by lower product sales for Baby Alive, Furby, and other vault brands, partially offset by higher sales in Beyblade and Nanomals.
Current wording
REINVENT BRANDS: Net revenues in the Reinvent Brands portfolio decreased $32.9 million, or 9.7%, in the first nine months of 2026 compared to the first nine months of 2025. The net revenue decrease is primarily driven by lower product sales for Furby, Nerfand Baby Alive, partially offset by higher sales relating to Beyblade.
Previous wording
Cost of sales– Cost of sales for the first six months of 2026 was $508.5 million, or 23.8% of net revenues, compared to $429.8 million, or 23.0% of net revenues, for the first six months of 2025. The increase in Cost of sales was primarily the result of an increase in net revenues period over period, shift in product mix, as well as approximately $17.7 million of cost related to the impacts of tariffs, primarily as it relates to products imported into the United States to be sold domestically.
Current wording
Cost of sales– Cost of sales for the first nine months of 2026 was $893.3 million, or 23.9% of net revenues, compared to $844.1 million, or 25.9% of net revenues, for the first nine months of 2025. The increase in Cost of sales was primarily the result of an increase in net revenues period over period. Cost of sales decreased as a percentage of net revenues as a result of the recording of $54.5 million of IEEPA tariff refunds during the period.
Previous wording
Program cost amortization– Program cost amortization decreased to $7.1 million, or 0.3% of net revenues, for the first six months of 2026 from $13.6 million, or 0.7% of net revenues, for the first six months of 2025. Program costs are capitalized as incurred and amortized primarily using the individual-film-forecast method which matches costs to the related recognized revenue and is based upon the current slate of entertainment projects.
Current wording
Program cost amortization– Program cost amortization decreased to $12.5 million, or 0.3% of net revenues, for the first nine months of 2026 from $21.0 million, or 0.6% of net revenues, for the first nine months of 2025. Program costs are capitalized as incurred and amortized primarily using the individual-film-forecast method which matches costs to the related recognized revenue and is based upon the current slate of entertainment projects.
Previous wording
Royalties– Royalties for the first six months of 2026 increased to $167.6 million, or 7.8% of net revenues, compared to $141.5 million, or 7.6% of net revenues, for the first six months of 2025. The increase in Royalties for the first six months of 2026 was directly driven by an increase in sales relating to Magic: The Gathering Universes Beyond sets, such as Teenage Mutant Ninja Turtlesand Marvel Super Heroes, as well as increased toy and game sales on licensed brands such as Marvel and Star Wars.
Current wording
Royalties– Royalties for the first nine months of 2026 increased to $309.7 million, or 8.3% of net revenues, compared to $255.8 million, or 7.9% of net revenues, for the first nine months of 2025. The increase in Royalties for the first nine months of 2026 was directly driven by an increase in sales relating to Magic: The Gathering Universes Beyond sets, such as Teenage Mutant Ninja Turtles, Marvel Super Heroesand The Hobbit, as well as increased toy and game sales on licensed brands such as Marvel and Star Wars.
Previous wording
Product development– Product development expense for the first six months of 2026 was $171.6 million, or 8.0% of net revenues, compared to $158.0 million, or 8.5% of net revenues, for the first six months of 2025. The increase in Product development expense during the first six months of 2026 was primarily due to the Company's higher incremental investment in the developments of Grow Brands under the Company's Playing to Win strategy.
Current wording
Product development– Product development expense for the first nine months of 2026 was $275.0 million, or 7.4% of net revenues, compared to $255.6 million, or 7.9% of net revenues, for the first nine months of 2025. The increase in Product development expense during the first nine months of 2026 was primarily due to the Company's higher incremental investment in the developments of Grow Brands under the Company's Playing to Win strategy.
Previous wording
Advertising– Advertising expense for the first six months of 2026 was $135.2 million, or 6.3% of net revenues, compared to $119.0 million, or 6.4% of net revenues, for the first six months of 2025. The Advertising expense increase during the first six months of 2026 was primarily driven by additional spend necessary to support top line growth opportunities within the Grow Brands category, specifically within the Wizards of the Coast and Digital Gaming segment.
Current wording
Advertising– Advertising expense for the first nine months of 2026 was $231.4 million, or 6.2% of net revenues, compared to $227.3 million, or 7.0% of net revenues, for the first nine months of 2025. The increase in Advertising expense during the first nine months of 2026 was primarily driven by additional spend necessary to support top line growth opportunities within the Grow Brands category, specifically within the Wizards of the Coast and Digital Gaming segment. Advertising expense decreased as a percentage of net revenues based on the timing of advertising campaigns and initiatives.
Previous wording
Amortization of intangibles– Amortization of intangible assets decreased to $29.2 million, or 1.4% of net revenues, for the first six months of 2026, as compared to $34.2 million, or 1.8% of net revenues, for the first six months of 2025. The amortization expense was driven by the straight-line amortization of the Company's definite-lived intangible assets.
Current wording
Amortization of intangible assets– Amortization of intangible assets decreased to $43.8 million, or 1.2% of net revenues, for the first nine months of 2026, as compared to $51.4 million, or 1.6% of net revenues, for the first nine months of 2025. The amortization expense was driven by the straight-line amortization of the Company's definite-lived intangible assets.
Previous wording
Impairment of goodwill– During the first six months of 2025, the Company recorded a $1,021.9 million non-cash goodwill impairment charge associated with goodwill assigned to reporting units within the Company's Consumer Products segment. There was no such impairment charge recorded during the first six months of 2026.
Current wording
Impairment of goodwill– During the first nine months of 2025, the Company recorded a $1,021.9 million non-cash goodwill impairment charge associated with goodwill assigned to reporting units within the Company's Consumer Products segment. There was no such impairment charge recorded during the first nine months of 2026.
Previous wording
Loss on disposal of business – During the first six months of 2025, the Company recorded a $25.0 million loss on disposal of business associated with the divestiture of the Company's non-core film and TV business (the "eOne Film and TV business") within the Entertainment segment. No such charges were recorded during the first six months of 2026.
Current wording
Loss on disposal of business – During the first nine months of 2025, the Company recorded a $25.0 million loss on disposal of business associated with the divestiture of the Company's non-core film and TV business (the "eOne Film and TV business") within the Entertainment segment. No such charges were recorded during the first nine months of 2026.
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Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Advertising– Advertising expense for the second quarter of 2026 was $74.8 million, or 6.6% of net revenues, compared to $63.6 million, or 6.5% of net revenues, for the second quarter of 2025. The Advertising expense increase during the second quarter of 2026 was primarily driven by additional spend necessary to support top line growth opportunities within the Grow Brands category, specifically within the Wizards of the Coast and Digital Gaming segment.
Previous report — wording carried elsewhere
Impairment of Goodwill– During the second quarter of 2025, the Company recorded a $1,021.9 million non-cash goodwill impairment charge associated with goodwill assigned to reporting units within the Company's Consumer Products segment. There was no such impairment charge recorded during the second quarter of 2026.
Previous report — wording carried elsewhere
Company has invested the proceeds from the 2031 Notes into Short-term investments that is expected to be utilized to repay the 2026 Notes, while simultaneously using any excess funds to repurchase longer-dated outstanding debt.