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