By Kit Norton
Shares of Hasbro sank Wednesday despite the toy and game maker posting better-than-expected first-quarter earnings and revenue. Investors appeared to be concerned with the company's decision not to issue updated full-year guidance.
Hasbro stock declined 7.8% to $89.61 on Wednesday, making it the worst performer in the S&P 500 for the trading session thus far. Shares are up 9.4% this year and have risen 35% over the past 12 months, but they remain 29% below their record closing high of $126.07 on July 29, 2019, according to Dow Jones Market Data.
Hasbro has numerous popular games in its portfolio, including Monopoly, Magic: The Gathering, Dungeons & Dragons, and Wizards of the Coast.
Investors were selling shares early Wednesday even as the company reported first-quarter adjusted earnings of $1.47 a share, compared to $1.04 a share a year ago and above Wall Street's call for $1.20 a share. Revenue grew 13% to $1 billion, beating the analyst consensus expectation of $969.2 million, according to FactSet.
Despite beating Wall Street's earnings expectations, Hasbro decided to reiterate full-year guidance, maintaining expectations for revenue to grow 3% to 5% with adjusted earnings before interest, taxes, depreciation, and amortization between $1.4 billion and $1.45 billion.
With the company historically tending to issue full-year guidance after the first quarter, the decision simply to reiterate guidance was not necessarily surprising, according to Morgan Stanley analysts Megan Clapp and Darryl Butler Jr. in a research note Wednesday. However, the analysts noted that the "magnitude" of the first-quarter results "suggested to us that a raise wasn't out of the question."
CEO Chris Cocks on the earnings call Wednesday told analysts that the decision to reiterate earlier guidance is "consistent" with the company's "typical practice."
"We think that's the prudent move," Cocks said. "I would say Q1 was a great start to the year. I think there's a lot of tailwinds that are blowing the business."
The CEO added that rising oil prices and tariff uncertainty remain concerns for the company, but executives are getting a better handle on on how the company will cover those costs.
Hasbro's management team also said that it expects to incur approximately $20 million of additional operating expenses associated with a cyber security "incident" at the end of March in which there was unauthorized access to its network. The company is still working through the final phases of the remediation process, and as a result it expects between $40 million and $60 million in consumer products revenue to be delayed from the second quarter to the back half of the year.
This has changed how Hasbro is looking at the year, despite it being included in its current guidance. The executive team told analysts Wednesday that, while it had initially thought the second quarter was going to be its "big quarter," that distinction will likely shift to the third quarter because of the security breach.
Write to Kit Norton at kit.norton@barrons.com
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May 20, 2026 12:30 ET (16:30 GMT)
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