Hasbro, Inc.

Good morning and welcome to the Hasbro third quarter 2026 earnings conference call. At this time, all parties will be in listen-only mode. If anyone should require operator assistance during today's conference, please press star zero from your telephone keypad. Today's conference is being recorded. If you have any objections, you may disconnect at this time. At this time, I'd like to turn the call over to Fred Wightman, Vice President, Hasbro Investor Relations.

Please go ahead. Thank you and good morning, everyone. Joining me today are Chris Cox, Hasbro's Chief Executive Officer, and Gina Goetter, Hasbro's Chief Financial Officer and Chief Operating Officer. We'll begin today's call with Chris and Gina providing commentary on the company's performance before taking your questions. Our earnings release and presentation slides for today's call are posted on our investor website. The press release and presentation include information regarding non-GAAP adjustments and non-GAAP financial measures. Our call today will discuss certain adjusted measures which exclude these non-GAAP adjustments. A reconciliation of GAAP to non-GAAP measures is included in the press release and presentation. Please note that whenever we discuss earnings per share, or EPS, we are referring to earnings per diluted share. Before we begin, I would like to remind you that during this call and the question and answer session that follows, members of Hasbro management may make forward-looking statements concerning management's expectations, goals, objectives, and similar matters. There are many factors that could cause actual results or events to differ materially from the anticipated results or other expectations expressed in these forward-looking statements. These factors include those set forth in our annual report on Form 10-K, our most recent 10-Q, in today's press release, and in our other public disclosures. We undertake no obligation to update any forward-looking statements made today to reflect events or circumstances occurring after the date of this call. I would now like to introduce Chris Cox. Chris?

Thanks, Fred, and good morning, everyone. Hasbro delivered another strong quarter with record profitability. Revenue grew 15% and adjusted operating profit improved 52%, with growth across all three of our segments. Wizards of the Coast momentum continued, driven by the magic flywheel. and our consumer products business posted another quarter of gains. We're increasing our outlook for the year, which Gina will walk through in her remarks. Despite all of the macro noise in the quarter, we stayed true to our superpower, inspiring a lifetime of play. We do that by building deep, lasting fandom around great IP. Magic is the clearest proof point. Magic revenue topped $600 million for the first time Growing 34% versus last year and beating the record we set last quarter. Strength was broad-based across tentpole releases, Backlist, and Secret Lair. The Hobbit, which launched in August, is the fourth best-selling set in Magic's history, and it did that with a leaner product lineup. Shipments of Reality Fracture, which debuted in early October, exceeded our expectations, and Backlist and Secret Lair are on track for record years. Looking to Q4, Star Trek, our final set of the year, arrives in November, and early signs are encouraging. It's drawing Star Trek fans who are new to Magic, which is the core thesis behind Universes Beyond. You can see that demand in engagement. Hobbit pre-release participation across our 13,000 Wizards Play Network partners was the highest we've seen for a Universes Beyond release, and Magic on Atlanta is sold out with badge sales up nearly 30%, The clearest proof is the player base. Take the first nine months of 2026 and compare it with all of 2024, our last year without a tentpole universe is beyond release. Organized play participants are up more than 40%, with three months left in the year. Fans come in through IP they already love, and expanded distribution makes it easier to find us. They stay because deep gameplay, married with best-in-class fan experiences, distinguishes Magic from other trading card games. In 2027, we expect Magic to grow on top of a record 2026. Each of our six tentpole releases next year has a full product suite. We're scaling production capacity to meet demand, and our fan base and retail distribution keep expanding. At New York Comic Con, we announced Marvel Darkhold Destiny, Our prior Marvel sets brought existing storylines into magic. This one tells an original Marvel story centered on a brand new character and a companion comic. All six sets next year are bangers, and we look forward to telling you more about them in the coming months. Turning to digital games, at GamesCon, we kicked off hands-on previews for Exodus and confirmed an April 7, 2027 launch date. We're excited to get Exodus in front of players, Thank you for joining us. while leaning into our partners' capital investments. Hasbro is a top-five global licensor with more than $17 billion in annual retail sales, and we plan to build on that position across five priorities. First, we're building an enterprise-wide franchise system that aligns story, product, and retail around key moments. Peppa Pig's Baby Evie initiative is the proof point. Retail sales grew nearly 30%, while we spent a third less on marketing. Second, we're scaling licensed consumer products anchored by Peppa Pig, Transformers, and My Little Pony and extending into Magic and Dungeons and Dragons. Third, we're accelerating location-based entertainment where we're the number one licensor in the space. Fourth, we're diversifying digital licensing with a pipeline of mobile, PC, and console titles. Monopoly Go shows the asymmetric opportunity when you partner with industry leaders. Fifth, we're using entertainment and music to create fandom that pays off across the portfolio. What connects all five strategies is the same asset-light model, and these businesses generate nearly $700 million in annual revenue across consumer products, digital, and entertainment. Turning to consumer products, revenue grew 4% to $828 million, in line with our expectations. and our toy and game business delivered its fourth consecutive quarter of growth. Marvel product was the standout, with revenues up more than 35%, supported by theatrical releases from our partners at Marvel Studios. We're pleased with the momentum across our entertainment-led brands. Transformers' 40th anniversary has been a great moment for fans as we brought the 1986 film back to theaters on Transformers Day, which coincided with strong retail events. In Marvel, Spider-Man remains strong following Brand New Day, and power-charged Spider-Man is featured in multiple holiday gift guides. Dr. Doom product is on shelf ahead of the Avengers Doomsday debut in December, with several items on retailers' top toy lists. We're entering the holidays with momentum, especially in our Focus Gem Square categories, those parts of the toy industry that are gamified, entertainment-driven, multi-purchase, and multi-generational. The third quarter showed what happens when we stay true to our superpower of inspiring a lifetime of play. Magic is deepening its player base and setting records. Licensing extends our brands through great partners who bring their own capital. And our toy and game business has grown four quarters in a row. That is a balanced portfolio, and it's the foundation for the outlook Gina will walk through. Before I turn things over, I want to thank our teams and partners around the world for delivering another great quarter. Gina?