filings.toolsItem 1. Financial Statements.
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Item 1. Financial Statements.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Millions of Dollars Except Share Data)
(Unaudited)
| March 29, 2026 | March 30, 2025 | December 28, 2025 | |||||||||||||||
| ASSETS | |||||||||||||||||
| Current assets: | |||||||||||||||||
| Cash and cash equivalents | $ | 857.1 | $ | 621.1 | $ | 776.6 | |||||||||||
| Short-term investments | 498.2 | — | 105.4 | ||||||||||||||
| Accounts receivable, net | 712.6 | 656.6 | 1,059.8 | ||||||||||||||
| Inventories | 280.5 | 295.8 | 259.8 | ||||||||||||||
| Prepaid expenses and other current assets | 416.6 | 339.3 | 382.1 | ||||||||||||||
| Total current assets | 2,765.0 | 1,912.8 | 2,583.7 | ||||||||||||||
| Property, plant and equipment, net of accumulated depreciation of $1,071.4, $1,047.6 and $1,060.0 | 393.9 | 293.6 | 247.8 | ||||||||||||||
| Goodwill | 1,256.5 | 2,278.4 | 1,256.7 | ||||||||||||||
| Other intangible assets, net of accumulated amortization of $425.7, $439.8 and $412.2 | 441.2 | 503.1 | 456.7 | ||||||||||||||
| Other assets | 1,073.7 | 1,052.1 | 1,007.1 | ||||||||||||||
| Total assets | $ | 5,930.3 | $ | 6,040.0 | $ | 5,552.0 | |||||||||||
| LIABILITIES, NONCONTROLLING INTERESTS AND SHAREHOLDERS' EQUITY | |||||||||||||||||
| Current liabilities: | |||||||||||||||||
| Current portion of long-term debt | $ | 497.0 | $ | — | $ | 497.0 | |||||||||||
| Accounts payable | 280.7 | 284.8 | 335.4 | ||||||||||||||
| Accrued liabilities | 893.7 | 871.2 | 1,038.7 | ||||||||||||||
| Total current liabilities | 1,671.4 | 1,156.0 | 1,871.1 | ||||||||||||||
| Long-term debt | 3,094.9 | 3,331.5 | 2,767.9 | ||||||||||||||
| Other liabilities | 489.8 | 355.0 | 347.5 | ||||||||||||||
| Total liabilities | 5,256.1 | 4,842.5 | 4,986.5 | ||||||||||||||
| Commitments and contingencies (Note 15) | |||||||||||||||||
| Shareholders' equity: | |||||||||||||||||
| Preference stock of $2.50 par value. Authorized 5,000,000 shares; none issued | — | — | — | ||||||||||||||
| Common stock of $0.50 par value. Authorized 600,000,000 shares; 220,286,736 shares issued | 110.1 | 110.1 | 110.1 | ||||||||||||||
| Additional paid-in capital | 2,708.7 | 2,631.9 | 2,695.4 | ||||||||||||||
| Retained earnings | 1,652.5 | 2,274.4 | 1,554.1 | ||||||||||||||
| Accumulated other comprehensive loss | (217.4) | (239.6) | (217.5) | ||||||||||||||
| Treasury stock, at cost; 78,710,668 shares; 80,160,721 shares; and 79,901,615 shares, respectively | (3,605.6) | (3,606.9) | (3,603.6) | ||||||||||||||
| Noncontrolling interests | 25.9 | 27.6 | 27.0 | ||||||||||||||
| Total shareholders' equity | 674.2 | 1,197.5 | 565.5 | ||||||||||||||
| Total liabilities, noncontrolling interests and shareholders' equity | $ | 5,930.3 | $ | 6,040.0 | $ | 5,552.0 |
See accompanying condensed notes to consolidated financial statements.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Millions of Dollars Except Per Share Data)
(Unaudited)
| Three Months Ended | |||||||||||
| March 29, 2026 | March 30, 2025 | ||||||||||
| Net revenues | $ | 1,000.2 | $ | 887.1 | |||||||
| Costs and expenses: | |||||||||||
| Cost of sales | 236.1 | 204.5 | |||||||||
| Program cost amortization | 4.0 | 7.4 | |||||||||
| Royalties | 77.7 | 57.0 | |||||||||
| Product development | 78.0 | 80.5 | |||||||||
| Advertising | 60.4 | 55.4 | |||||||||
| Amortization of intangible assets | 14.6 | 17.0 | |||||||||
| Loss on disposal of business | — | 25.0 | |||||||||
| Selling, distribution and administration | 259.1 | 269.6 | |||||||||
| Total costs and expenses | 729.9 | 716.4 | |||||||||
| Operating profit | 270.3 | 170.7 | |||||||||
| Non-operating expense: | |||||||||||
| Interest expense | 41.8 | 41.6 | |||||||||
| Interest income | (10.1) | (8.9) | |||||||||
| Other (income) expense, net | (5.5) | 1.4 | |||||||||
| Total non-operating expense, net | 26.2 | 34.1 | |||||||||
| Earnings before income taxes | 244.1 | 136.6 | |||||||||
| Income tax expense | 44.6 | 37.1 | |||||||||
| Net earnings | 199.5 | 99.5 | |||||||||
| Net earnings attributable to noncontrolling interests | 1.1 | 0.9 | |||||||||
| Net earnings attributable to Hasbro, Inc. | $ | 198.4 | $ | 98.6 | |||||||
| Net earnings per common share: | |||||||||||
| Basic | $ | 1.41 | $ | 0.71 | |||||||
| Diluted | $ | 1.39 | $ | 0.70 | |||||||
| Cash dividends declared | $ | 0.70 | $ | 0.70 |
See accompanying condensed notes to consolidated financial statements.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Earnings
(Millions of Dollars)
(Unaudited)
| Three Months Ended | |||||||||||
| March 29, 2026 | March 30, 2025 | ||||||||||
| Net earnings | $ | 199.5 | $ | 99.5 | |||||||
| Other comprehensive earnings (loss): | |||||||||||
| Foreign currency translation adjustments | (5.2) | 10.2 | |||||||||
| Net gains (losses) on hedging activities, net of tax | 4.2 | (2.7) | |||||||||
| Reclassifications to earnings, net of tax: | |||||||||||
| Net losses (gains) on hedging activities | 1.1 | (0.7) | |||||||||
| Other comprehensive earnings, net of tax | 0.1 | 6.8 | |||||||||
| Total comprehensive earnings, net of tax | 199.6 | 106.3 | |||||||||
| Total comprehensive earnings attributable to noncontrolling interests | 1.1 | 0.9 | |||||||||
| Total comprehensive earnings attributable to Hasbro, Inc. | $ | 198.5 | $ | 105.4 |
See accompanying condensed notes to consolidated financial statements.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Millions of Dollars)
(Unaudited)
| Three months ended | |||||||||||
| March 29, 2026 | March 30, 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net earnings | $ | 199.5 | $ | 99.5 | |||||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||||
| Depreciation of property, plant and equipment | 11.3 | 17.2 | |||||||||
| Loss on disposal of business | — | 25.0 | |||||||||
| Inventory obsolescence | 5.0 | 5.2 | |||||||||
| Amortization of intangible assets | 14.6 | 17.0 | |||||||||
| Program cost amortization | 4.0 | 7.4 | |||||||||
| Deferred income taxes | 11.9 | 4.8 | |||||||||
| Share-based compensation | 21.1 | 18.4 | |||||||||
| Other non-cash items | 4.9 | 7.9 | |||||||||
| Change in operating assets and liabilities: | |||||||||||
| Net change in accounts receivable | 345.5 | 258.7 | |||||||||
| Net change in inventories | (26.9) | (23.2) | |||||||||
| Net change in prepaid expenses and other current assets | (24.8) | (25.3) | |||||||||
| Program production costs | (2.1) | (2.8) | |||||||||
| Net change in accounts payable and accrued liabilities | (228.8) | (267.0) | |||||||||
| Other | 2.5 | (4.7) | |||||||||
| Net cash provided by operating activities | 337.7 | 138.1 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Additions to property, plant and equipment | (22.2) | (13.8) | |||||||||
| Additions to software development | (27.7) | (29.4) | |||||||||
| Purchases of investments | (423.0) | (10.0) | |||||||||
| Other | 0.8 | 0.8 | |||||||||
| Net cash utilized by investing activities | (472.1) | (52.4) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from borrowings | 399.4 | — | |||||||||
| Repayments of borrowings | (68.4) | (49.2) | |||||||||
| Repurchases of common stock | (7.7) | — | |||||||||
| Share-based compensation transactions | 37.7 | 3.8 | |||||||||
| Dividends paid | (98.5) | (97.9) | |||||||||
| Payments related to tax withholding for share-based compensation | (41.5) | (17.7) | |||||||||
| Payments of financing costs | (4.1) | — | |||||||||
| Other | (1.8) | (1.4) | |||||||||
| Net cash provided (utilized) by financing activities | 215.1 | (162.4) | |||||||||
| Effect of exchange rate changes on cash | (0.2) | 2.8 | |||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 80.5 | (73.9) | |||||||||
| Cash, cash equivalents and restricted cash at beginning of year | 776.6 | 695.0 | |||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 857.1 | $ | 621.1 | |||||||
| Supplemental information | |||||||||||
| Interest paid | $ | 28.9 | $ | 28.7 | |||||||
| Income taxes paid, net | $ | 18.4 | $ | 26.7 |
See accompanying condensed notes to consolidated financial statements.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Shareholders' Equity
(Millions of Dollars)
(Unaudited)
| Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Non-controlling Interests | Total Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 28, 2025 | $ | 110.1 | $ | 2,695.4 | $ | 1,554.1 | $ | (217.5) | $ | (3,603.6) | $ | 27.0 | $ | 565.5 | ||||||||||||||||||||||||||||||||||||
| Net earnings | — | — | 198.4 | — | — | 1.1 | 199.5 | |||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive earnings, net of tax | — | — | — | 0.1 | — | — | 0.1 | |||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation transactions | — | (9.3) | — | — | 5.7 | — | (3.6) | |||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | 21.1 | — | — | — | — | 21.1 | |||||||||||||||||||||||||||||||||||||||||||
| Repurchases of common stock | — | — | — | — | (7.7) | — | (7.7) | |||||||||||||||||||||||||||||||||||||||||||
| Dividends declared | — | 1.5 | (100.0) | — | — | — | (98.5) | |||||||||||||||||||||||||||||||||||||||||||
| Distributions paid to noncontrolling owners and other foreign exchange | — | — | — | — | — | (2.2) | (2.2) | |||||||||||||||||||||||||||||||||||||||||||
| Balance, March 29, 2026 | $ | 110.1 | $ | 2,708.7 | $ | 1,652.5 | $ | (217.4) | $ | (3,605.6) | $ | 25.9 | $ | 674.2 |
| Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Non-controlling Interests | Total Shareholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 29, 2024 | $ | 110.1 | $ | 2,632.2 | $ | 2,274.2 | $ | (246.4) | $ | (3,612.5) | $ | 27.4 | $ | 1,185.0 | ||||||||||||||||||||||||||||||||||||
| Net earnings | — | — | 98.6 | — | — | 0.9 | 99.5 | |||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive earnings, net of tax | — | — | — | 6.8 | — | — | 6.8 | |||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation transactions | — | (19.3) | — | — | 5.6 | — | (13.7) | |||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | 18.4 | — | — | — | — | 18.4 | |||||||||||||||||||||||||||||||||||||||||||
| Dividends declared | — | 0.6 | (98.4) | — | — | — | (97.8) | |||||||||||||||||||||||||||||||||||||||||||
| Distributions paid to noncontrolling owners and other foreign exchange | — | — | — | — | — | (0.7) | (0.7) | |||||||||||||||||||||||||||||||||||||||||||
| Balance, March 30, 2025 | $ | 110.1 | $ | 2,631.9 | $ | 2,274.4 | $ | (239.6) | $ | (3,606.9) | $ | 27.6 | $ | 1,197.5 |
See accompanying condensed notes to consolidated financial statements.
HASBRO, INC. AND SUBSIDIARIES
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
(Unaudited)
(1) Basis of Presentation
In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all normal and recurring adjustments necessary to present fairly the consolidated financial position of Hasbro, Inc. and all consolidated subsidiaries ("Hasbro" or the "Company") as of March 29, 2026, March 30, 2025, and December 28, 2025, and the results of its operations and cash flows and shareholders' equity for the periods ended March 29, 2026 and March 30, 2025 in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and condensed notes thereto. Actual results could differ from those estimates.
The three months ended March 29, 2026 and March 30, 2025 were 13-week periods.
The results of operations for the three months ended March 29, 2026 are not necessarily indicative of results to be expected for the full year 2026, nor were those of the comparable 2025 periods representative of those actually experienced for the full year 2025.
These consolidated financial statements have been prepared without audit, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). Certain information and disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The Company filed with the SEC audited consolidated financial statements for the fiscal year ended December 28, 2025 in the Company's Annual Report on Form 10-K for the year ended December 28, 2025 ("2025 Form 10-K"), which includes all such information and disclosures and, accordingly, should be read in conjunction with the financial information included herein. Certain amounts have been reclassified to conform to current year presentation.
Significant Accounting Policies
The Company's significant accounting policies are summarized in Note 1, Summary of Significant Accounting Policies, to the consolidated financial statements included in the Company's 2025 Form 10-K.
Recently Adopted Accounting Pronouncements
During the three months ended March 29, 2026, there were no recently adopted accounting standards that had a material effect on the Company’s financial statements.
Accounting Standards Issued But Not Yet Adopted
In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures. The new standard requires enhanced additional disclosures related to certain expense categories. The new standard is effective for fiscal years beginning after December 15, 2026. We are assessing the effect on our 2027 annual consolidated financial statement disclosures and in future interim periods thereafter. At this time, we anticipate adoption will result in additional disclosures within our consolidated financial statements, however adoption will not impact our consolidated balance sheets or statements of operations.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—
Internal-Use Software (Subtopic 350-40). The standard removes all references to the previously existing software development project stages and requires entities to start capitalizing software costs when management has authorized and committed funding to a software project and it is probable that the project will be completed with its intended functionality. The new standard is effective for fiscal years beginning after December 15, 2027. Early adoption is permitted and can be applied prospectively, retrospectively, or utilizing a modified transition approach. We are currently assessing the impact of this ASU on our consolidated financial statements.
All other ASUs issued but not yet adopted were assessed and determined to be not applicable or are not expected to have a material impact on our consolidated financial statements or financial statement disclosures.
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
2) Revenue Recognition
Revenue is recognized when control of the promised goods, functional intellectual property or production is transferred to the customers or licensees, in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable. The majority of the Company’s revenues are derived from sales of finished products to customers. Refer to Note 1, Summary of Significant Accounting Policies, of the Company's 2025 Annual Report for the Company's revenue recognition accounting policy.
Contract Assets and Liabilities
In the ordinary course of business, the Company enters into arrangements that result in the recognition of contract assets and contract liabilities. The Company records the current portion of contract assets and contract liabilities in Prepaid expenses and other current assets and Accrued liabilities, respectively, and the long-term portion within Other assets and Other liabilities, respectively, in the Company's Consolidated Balance Sheets.
The opening and closing balances of contract assets and contract liabilities are as follows:
| March 29, 2026 | March 30, 2025 | ||||||||||
| Contract Assets: | |||||||||||
| Balance, beginning of period | $ | 282.9 | $ | 241.4 | |||||||
| Balance, end of period | $ | 283.5 | $ | 227.1 | |||||||
| Contract Liabilities: | |||||||||||
| Balance, beginning of period | $ | 190.5 | $ | 236.8 | |||||||
| Balance, end of period | $ | 203.5 | $ | 202.6 |
For the three months ended March 29, 2026, the Company recognized revenue of $56.3 million that was included in the December 28, 2025 contract liability balance. For the three months ended March 30, 2025, the Company recognized revenue of $134.7 million that was included in the December 29, 2024 contract liability balance.
Unsatisfied Performance Obligations
As of March 29, 2026, revenue for unsatisfied performance obligations expected to be recognized in the future is $976.6 million, primarily for intellectual property to be made available in the future under existing agreements with merchandise and co-branding licensees and television station affiliates. Of this amount, we expect to recognize approximately $178.0 million in the remainder of 2026, $186.8 million in 2027, $146.6 million in 2028, and $465.2 million thereafter. These amounts include only fixed consideration or minimum guarantees and do not include amounts related to (i) contracts with an original expected term of one year or less or (ii) licenses of intellectual property that are solely based on the sales of the licensee.
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
Accounts Receivable and Allowance for Credit Losses
The Company’s balance for accounts receivable on the Consolidated Balance Sheets as of March 29, 2026 and March 30, 2025 are primarily derived from contracts with customers. A summary of the related allowance for credit losses activity is as follows:
| March 29, 2026 | March 30, 2025 | ||||||||||
| Balance, beginning of period | $ | 61.3 | $ | 25.8 | |||||||
| Provisions/charges to income | 1.9 | 14.6 | |||||||||
| Amounts charged off and other | (5.6) | (2.9) | |||||||||
| Foreign currency impact | (0.1) | 0.2 | |||||||||
| Balance, end of period | $ | 57.5 | $ | 37.7 |
Disaggregation of Revenues
The Company disaggregates its revenues from contracts with customers by reportable segment: Wizards of the Coast and Digital Gaming, Consumer Products, and Entertainment. The Company further disaggregates revenues within its Wizards of the Coast and Digital Gaming segment by category: Tabletop Gaming and Digital and Licensed Gaming; within its Consumer Products segment by major geographic region: North America, Europe, Latin America, and Asia Pacific; and within its Entertainment segment by category: Family Brands and Film and TV. Finally, the Company disaggregates its revenues into three brand categories: Grow Brands, Optimize Brands, and Reinvent Brands. We believe these collectively depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.
The following table represents consolidated Wizards of the Coast and Digital Gaming segment net revenues by category:
| Three Months Ended | |||||||||||
| March 29, 2026 | March 30, 2025 | ||||||||||
| Tabletop Gaming | $ | 460.7 | $ | 343.8 | |||||||
| Digital and Licensed Gaming | 121.3 | 118.3 | |||||||||
| Net revenues | $ | 582.0 | $ | 462.1 |
The following table represents consolidated Consumer Products segment net revenues by major geographic region:
| Three Months Ended | |||||||||||
| March 29, 2026 | March 30, 2025 | ||||||||||
| North America | $ | 215.4 | $ | 231.4 | |||||||
| Europe | 99.6 | 85.0 | |||||||||
| Asia Pacific | 53.8 | 53.8 | |||||||||
| Latin America | 29.1 | 28.1 | |||||||||
| Net revenues | $ | 397.9 | $ | 398.3 |
The following table represents consolidated Entertainment segment net revenues by category:
| Three Months Ended | |||||||||||
| March 29, 2026 | March 30, 2025 | ||||||||||
| Family Brands | $ | 18.6 | $ | 22.4 | |||||||
| Film and TV | 1.7 | 4.3 | |||||||||
| Net revenues | $ | 20.3 | $ | 26.7 |
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
The following table represents consolidated net revenues by brand portfolio:
| Three Months Ended | |||||||||||
| March 29, 2026**(1)** | March 30, 2025**(1)** | ||||||||||
| Grow Brands | $ | 787.5 | $ | 660.8 | |||||||
| Optimize Brands | 126.9 | 130.7 | |||||||||
| Reinvent Brands | 85.8 | 95.6 | |||||||||
| Net revenues | $ | 1,000.2 | $ | 887.1 |
(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.
(3) Sale of Entertainment One Film and TV Business
On December 27, 2023, the Company completed the sale of its Entertainment One film and television business ("eOne Film and TV") to Lions Gate Entertainment Corp., Lions Gate Entertainment Inc. and Lions Gate International Motion Pictures S.à.r.l (collectively "Lionsgate"), pursuant to the terms of an Equity Purchase Agreement dated August 3, 2023, among Hasbro and Lionsgate for a purchase price of $375.0 million in cash, subject to certain purchase price adjustments plus the assumption by Lionsgate of production financing loans. The Equity Purchase Agreement also included a holdback amount that was retained by Lionsgate upon the execution of the sale but remained recoverable by Hasbro if certain terms were not satisfied by Lionsgate within 30 days of the first anniversary of the agreement.
During the three months ended March 30, 2025, the Company was informed by Lionsgate of the satisfaction of the requirements under the agreement and the final holdback amount was settled, resulting in a $25.0 million Loss on disposal of business on the Consolidated Statements of Operations. During the three months ended March 29, 2026, no further amounts were recorded to Loss on disposal of business.
(4) Earnings Per Common Share
Net earnings per share data was computed as follows:
| Three Months Ended | |||||||||||
| March 29, 2026 | March 30, 2025 | ||||||||||
| Net earnings attributable to Hasbro, Inc. | $ | 198.4 | $ | 98.6 | |||||||
| Average shares outstanding | 140.8 | 139.8 | |||||||||
| Effect of dilutive securities | 2.4 | 1.2 | |||||||||
| Equivalent Shares | 143.2 | 141.0 | |||||||||
| Net earnings attributable to Hasbro, Inc. per common share: | |||||||||||
| Basic | $ | 1.41 | $ | 0.71 | |||||||
| Diluted | $ | 1.39 | $ | 0.70 |
For the three months ended March 29, 2026 and March 30, 2025, options and other share-based awards totaling 0.3 million and 0.9 million, respectively, were excluded from the calculation of diluted earnings per share because to include them would have been anti-dilutive.
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
(5) Other Comprehensive Earnings (Loss)
Components of Other comprehensive earnings (loss) are presented within the Consolidated Statements of Comprehensive Earnings (Loss), net of tax. Income tax effects are released from Accumulated other comprehensive loss ("AOCL") at the effective tax rate during the period in which the components are released.
Changes in the components of AOCL are as follows:
| Pension and Postretirement Amounts | Derivative Instruments | Available- for-Sale Securities | Foreign Currency Translation Adjustments | Total AOCL | |||||||||||||||||||||||||
| 2026 | |||||||||||||||||||||||||||||
| Balance, December 28, 2025 | $ | (7.2) | $ | (21.1) | $ | (0.1) | $ | (189.1) | $ | (217.5) | |||||||||||||||||||
| Other comprehensive earnings (loss), before reclassifications, before tax | — | 5.3 | — | (5.2) | 0.1 | ||||||||||||||||||||||||
| Income tax expense | — | (1.1) | — | — | (1.1) | ||||||||||||||||||||||||
| Other comprehensive earnings (loss), before reclassifications | — | 4.2 | — | (5.2) | (1.0) | ||||||||||||||||||||||||
| Reclassification from AOCL to earnings, before tax | — | 1.5 | — | — | 1.5 | ||||||||||||||||||||||||
| Income tax expense | — | (0.4) | — | — | (0.4) | ||||||||||||||||||||||||
| Reclassifications from AOCL to earnings | — | 1.1 | — | — | 1.1 | ||||||||||||||||||||||||
| Other comprehensive earnings (loss) | — | 5.3 | — | (5.2) | 0.1 | ||||||||||||||||||||||||
| Balance, March 29, 2026 | $ | (7.2) | $ | (15.8) | $ | (0.1) | $ | (194.3) | $ | (217.4) | |||||||||||||||||||
| 2025 | |||||||||||||||||||||||||||||
| Balance, December 29, 2024 | $ | (8.0) | $ | (9.1) | $ | (0.1) | $ | (229.2) | $ | (246.4) | |||||||||||||||||||
| Other comprehensive (loss) earnings, before reclassifications, before tax | — | (4.1) | — | 10.2 | 6.1 | ||||||||||||||||||||||||
| Income tax benefit | — | 1.4 | — | — | 1.4 | ||||||||||||||||||||||||
| Other comprehensive (loss) earnings, before reclassifications | — | (2.7) | — | 10.2 | 7.5 | ||||||||||||||||||||||||
| Reclassification from AOCL to earnings, before tax | — | (0.9) | — | — | (0.9) | ||||||||||||||||||||||||
| Income tax benefit | — | 0.2 | — | — | 0.2 | ||||||||||||||||||||||||
| Reclassifications from AOCL to earnings | — | (0.7) | — | — | $ | (0.7) | |||||||||||||||||||||||
| Other comprehensive (loss) earnings | — | (3.4) | — | 10.2 | 6.8 | ||||||||||||||||||||||||
| Balance, March 30, 2025 | $ | (8.0) | $ | (12.5) | $ | (0.1) | $ | (219.0) | $ | (239.6) |
Gains (Losses) on Derivative Instruments
As of March 29, 2026, the Company had remaining net deferred losses on foreign currency forward contracts, net of tax, of $3.1 million in AOCL. These instruments hedge payments related to inventory purchased in the three months ended March 29, 2026 or forecasted to be purchased during the remainder of 2026, intercompany expenses expected to be paid or received during 2026 and cash receipts for sales made at the end of the first quarter of 2026 or forecasted to be made in the remainder of 2026. These amounts will be reclassified into the Consolidated Statements of Operations upon the sale of the related inventory or recognition of the related sales or expenses.
In addition to foreign currency forward contracts, the Company entered into hedging contracts on future interest payments related to the 5.10% Notes due 2044. At the date of debt issuance, these contracts were terminated and the fair value on the date of settlement was deferred in AOCL and is being amortized to interest expense over the life of the related Notes using the effective interest rate method. At March 29, 2026, deferred losses, net of tax of $12.6 million related to these instruments remained in AOCL. For each of the three months ended March 29, 2026 and March 30, 2025, previously deferred losses, net of tax, of $0.2 million related to these instruments were reclassified from AOCL to net earnings.
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
Of the amounts included in AOCL at March 29, 2026, the Company expects net loss of approximately $3.8 million to be reclassified to the Consolidated Statements of Operations within the next twelve months. However, the amount ultimately realized in earnings is dependent on the fair value of the hedging instruments on the settlement dates.
Refer to Note 13, Derivative Financial Instruments, to the consolidated financial statements for additional discussion on reclassifications from AOCL to earnings.
(6) Goodwill
Changes in the carrying amount of goodwill, by operating segment, are as follows:
| Wizards of the Coast and Digital Gaming | Consumer Products | Entertainment | Total | |||||||||||||||||||||||
| 2026 | ||||||||||||||||||||||||||
| Balance, December 28, 2025(1) | $ | 370.5 | $ | 561.0 | $ | 325.2 | $ | 1,256.7 | ||||||||||||||||||
| Foreign exchange translation | (0.1) | (0.1) | — | (0.2) | ||||||||||||||||||||||
| Balance, March 29, 2026 | $ | 370.4 | $ | 560.9 | $ | 325.2 | $ | 1,256.5 |
| Wizards of the Coast and Digital Gaming | Consumer Products | Entertainment | Total | ||||||||||||||||||||||||||
| 2025 | |||||||||||||||||||||||||||||
| Balance, December 29, 2024 | $ | 371.0 | $ | 1,582.0 | $ | 325.2 | $ | 2,278.2 | |||||||||||||||||||||
| Foreign exchange translation | 0.1 | 0.1 | — | 0.2 | |||||||||||||||||||||||||
| Balance, March 30, 2025 | $ | 371.1 | $ | 1,582.1 | $ | 325.2 | $ | 2,278.4 |
(1) During the second quarter of 2025, the Company recorded $1,021.9 million of non-cash goodwill impairment charges within the Consumer Products segment. Refer to the 2025 Annual Report for further detail.
(7) Investments in Productions
Investments in productions are predominantly monetized on a title-by-title basis and are recorded within Other assets in the Company's Consolidated Balance Sheets to the extent they are considered recoverable against future revenues. These amounts are being amortized to program cost amortization using a model that reflects the consumption of the asset as it is released through various channels including broadcast licenses, theatrical release and home entertainment. Amounts capitalized are reviewed periodically on an individual title basis and any portion of the unamortized amount that appears not to be recoverable from future net revenues is expensed as part of program cost amortization during the period the loss becomes evident.
The Company's unamortized investments in productions consisted of the following:
| March 29, 2026 | March 30, 2025 | December 28, 2025 | |||||||||||||||||||||||||||
| Investment in Films and Television Programs: | |||||||||||||||||||||||||||||
| Individual monetization: | |||||||||||||||||||||||||||||
| Released, net of amortization | $ | 61.2 | $ | 67.9 | $ | 63.2 | |||||||||||||||||||||||
| Completed and not released | — | 10.8 | — | ||||||||||||||||||||||||||
| In production | 4.3 | 1.4 | 0.4 | ||||||||||||||||||||||||||
| Pre-production | 5.5 | 8.1 | 4.0 | ||||||||||||||||||||||||||
| Total individual monetization | 71.0 | 88.2 | 67.6 | ||||||||||||||||||||||||||
| Film/TV group monetization: | |||||||||||||||||||||||||||||
| Released, net of amortization | 29.6 | 31.4 | 29.8 | ||||||||||||||||||||||||||
| In production | 0.3 | — | 0.3 | ||||||||||||||||||||||||||
| Total film/TV group monetization | 29.9 | 31.4 | 30.1 | ||||||||||||||||||||||||||
| Total program investments | $ | 100.9 | $ | 119.6 | $ | 97.7 |
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
The Company's program cost amortization consisted of the following:
| Three Months Ended | ||||||||||||||
| March 29, 2026 | March 30, 2025 | |||||||||||||
| Individual monetization | $ | 3.6 | $ | 6.4 | ||||||||||
| Film/TV group monetization | 0.4 | 1.0 | ||||||||||||
| Total program cost amortization | $ | 4.0 | $ | 7.4 |
(8) Additional Balance Sheet Information
Components of accrued liabilities were as follows:
| March 29, 2026 | March 30, 2025 | December 28, 2025 | |||||||||||||||
| Contract liabilities - current | $ | 203.5 | $ | 202.5 | $ | 190.5 | |||||||||||
| Accrued royalties expense | 173.2 | 131.6 | 207.7 | ||||||||||||||
| Payroll and management incentives | 77.0 | 22.4 | 158.2 | ||||||||||||||
| Other taxes | 63.9 | 51.4 | 67.4 | ||||||||||||||
| Advertising | 48.7 | 55.9 | 88.2 | ||||||||||||||
| Interest | 40.9 | 42.5 | 29.6 | ||||||||||||||
| Freight | 35.6 | 24.0 | 44.2 | ||||||||||||||
| General vendor accruals | 33.9 | 34.2 | 46.8 | ||||||||||||||
| Lease liability - current | 31.4 | 28.8 | 30.6 | ||||||||||||||
| Defined contributions plans | 27.5 | 14.5 | 27.6 | ||||||||||||||
| Supplier cancellation charges | 21.6 | 42.9 | 32.9 | ||||||||||||||
| Accrued income taxes | 18.1 | 100.5 | 14.4 | ||||||||||||||
| Professional fees | 15.9 | 16.0 | 17.3 | ||||||||||||||
| Restructuring | 15.3 | 39.1 | 19.3 | ||||||||||||||
| Insurance | 8.9 | 11.8 | 9.0 | ||||||||||||||
| Participations and residuals | 5.9 | 10.3 | 6.8 | ||||||||||||||
| Accrued expenses - productions | 2.9 | 0.7 | 0.7 | ||||||||||||||
| Other | 69.5 | 42.1 | 47.5 | ||||||||||||||
| Total accrued liabilities | $ | 893.7 | $ | 871.2 | $ | 1,038.7 |
Prepaid expenses and other current assets include contract assets, current of $128.4 million, $115.2 million, and $142.4 million as of March 29, 2026, March 30, 2025, and December 28, 2025, respectively.
Other assets include deferred tax assets of $276.4 million, $417.2 million, and $286.8 million as of March 29, 2026, March 30, 2025, and December 28, 2025, respectively, and unamortized software development costs of $416.0 million, $291.0 million, and $385.6 million as of March 29, 2026, March 30, 2025, and December 28, 2025, respectively.
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
(9) Long-Term Debt and Other Financing
The carrying costs, which are equal to the outstanding principal amounts, and fair values of the Company's long-term borrowings are as follows:
| March 29, 2026 | March 30, 2025 | December 28, 2025 | |||||||||||||||||||||||||||||||||
| Carrying Cost | Fair Value | Carrying Cost | Fair Value | Carrying Cost | Fair Value | ||||||||||||||||||||||||||||||
| 3.90% Notes Due 2029 | $ | 900.0 | $ | 871.8 | $ | 900.0 | $ | 853.8 | $ | 900.0 | $ | 885.2 | |||||||||||||||||||||||
| 6.05% Notes Due 2034 | 500.0 | 517.5 | 500.0 | 512.6 | 500.0 | 530.7 | |||||||||||||||||||||||||||||
| 6.35% Notes Due 2040 | 500.0 | 517.8 | 500.0 | 512.5 | 500.0 | 526.1 | |||||||||||||||||||||||||||||
| 3.55% Notes Due 2026 | 497.0 | 494.4 | 565.1 | 554.7 | 497.0 | 495.3 | |||||||||||||||||||||||||||||
| 3.50% Notes Due 2027 | 418.8 | 413.2 | 476.4 | 462.5 | 475.0 | 470.3 | |||||||||||||||||||||||||||||
| 4.65% Notes Due 2031 | 400.0 | 393.2 | — | — | — | — | |||||||||||||||||||||||||||||
| 5.10% Notes Due 2044 | 286.4 | 256.4 | 300.0 | 260.6 | 300.0 | 267.5 | |||||||||||||||||||||||||||||
| 6.60% Debentures Due 2028 | 109.9 | 114.5 | 109.9 | 116.1 | 109.9 | 116.4 | |||||||||||||||||||||||||||||
| Total long-term debt | 3,612.1 | 3,578.8 | 3,351.4 | 3,272.8 | 3,281.9 | 3,291.5 | |||||||||||||||||||||||||||||
| Less: deferred debt expenses | 20.2 | — | 19.9 | — | 17.0 | — | |||||||||||||||||||||||||||||
| Less: Current portion of long-term debt | 497.0 | 494.4 | — | — | 497.0 | 495.3 | |||||||||||||||||||||||||||||
| Long-term debt | $ | 3,094.9 | $ | 3,084.4 | $ | 3,331.5 | $ | 3,272.8 | $ | 2,767.9 | $ | 2,796.2 |
For the three months ended March 29, 2026, the Company repurchased $69.8 million of its 2027 and 2044 Notes and recorded a gain on extinguishment of $1.5 million in Other (income) expense, net in the Consolidated Statements of Operations. For the three months ended March 30, 2025, the Company repurchased $50.4 million of its 2026 and 2027 Notes and recorded a gain on extinguishment of $1.2 million in Other (income) expense, net in the Consolidated Statements of Operations.
2031 Notes
In March 2026, the Company issued an aggregate of $400.0 million in senior unsecured debt securities that bear a fixed interest rate of 4.65% due 2031 (the "2031 Notes"). The 2031 Notes were issued with an original issuance discount of $0.6 million and the Company capitalized $3.7 million of debt issuance costs. The original issuance discount and debt issuance costs will be amortized over the term of the 2031 Notes.
Other Financing Arrangements
On February 20, 2026, the Company entered into a Fourth Amended and Restated Revolving Credit Agreement (the "Amended Agreement") with Bank of America, N.A., as administrative agent, swing line lender, Letter of Credit issuer and lender, and certain other financial institutions, as Letter of Credit issuers and/or lenders. The Amended Agreement amends and restates the Borrower's Third Amended and Restated Revolving Credit Agreement dated as of September 5, 2023.
The Amended Agreement provides the Company with a senior unsecured revolving credit facility (the “Revolving Facility”) with commitments in an aggregate principal amount of $1.1 billion. The Amended Agreement also provides for a potential additional incremental commitment increase of up to $550.0 million. Additionally, the Amended Agreement extends the term of the Revolving Facility from September 5, 2028 to February 20, 2031. The Amended Agreement contains sub-facilities that permit the Borrower to use up to $75.0 million of the Revolving Facility for the issuance of letters of credit and up to $50.0 million for swing line loans.
The Amended Agreement contains affirmative and negative covenants typical of this type of facility, including: (a) restrictions on the Company’s and its domestic subsidiaries’ ability to allow liens on their assets, (b) restrictions on the incurrence of indebtedness, (c) restrictions on the Company’s and certain of its subsidiaries’ ability to engage in certain mergers, (d) the requirement that the Company maintain a Consolidated Interest Coverage Ratio of no less than 3.00:1.00 as of the end of any fiscal quarter and (e) the requirement that the Company maintain: a Consolidated Net Total Leverage Ratio of no more than (i) 3.75:1.00 for each of the first, second and fourth fiscal quarters of each year and (ii) 4.00:1:00 for the third fiscal quarter of each year. The Company has no outstanding borrowings under the Amended Agreement as of March 29, 2026. In connection with the execution of the Amended Agreement, the Company capitalized $1.8 million of deferred financing costs.
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
The Company also has a supplier finance program which provides participating suppliers the option of receiving payment in advance of an invoice due date, to be paid by certain administering banks, on the basis of invoices that the Company has confirmed as valid and approved. The Company’s obligation is to make payment in the invoice amount negotiated with participating suppliers, to the administering banks on the invoice due date. The Company’s suppliers are not required to participate in the supplier finance program. The early payment transactions between the Company’s supplier and the administering bank are subject to an agreement between those parties, and the Company does not participate in any financial aspect of the agreements between the Company’s suppliers and the administering banks. The Company has not pledged any assets to the administering bank under the supplier financing program. The Company or the administering bank may terminate the agreement upon at least 30 days’ written notice. The amount of obligations confirmed under the program that remain unpaid by the Company were $48.1 million, $51.2 million, and $45.7 million as of March 29, 2026, March 30, 2025, and December 28, 2025, respectively. These obligations are presented within Accounts payable in our Consolidated Balance Sheets. The activity related to this program is reflected within the operating activities section of the Consolidated Statements of Cash Flows.
(10) Income Taxes
The Company and its subsidiaries file income tax returns in the United States and various state and international jurisdictions. In the normal course of business, the Company is regularly audited by U.S. federal, state and local, and international tax authorities in various tax jurisdictions.
The effective tax rate ("ETR") was 18.3% for the three months ended March 29, 2026, and 27.1% for the three months ended March 30, 2025. The following items impacted the ETR during the first three months of 2026 and 2025:
-
During the three months ended March 29, 2026 the Company recorded a net discrete tax benefit of $8.8 million, primarily associated with share-based compensation.
-
During the three months ended March 30, 2025 the Company recorded an unfavorable adjustment to the Loss on Sale of the Film and TV reporting unit of $25.0 million with no tax benefit. The Company also recorded a net discrete tax benefit of $0.3 million, primarily associated with share-based compensation.
(11) Fair Value of Financial Instruments
The Company measures certain financial instruments at fair value. The fair value hierarchy consists of three levels:
-
Level 1 fair values are based on quoted market prices in active markets for identical assets or liabilities that the entity has the ability to access;
-
Level 2 fair values are those based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities;
-
Level 3 fair values are based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
There have been no transfers between levels within the fair value hierarchy.
As of March 29, 2026, March 30, 2025 and December 28, 2025, the Company had the following assets and liabilities measured at fair value in its Consolidated Balance Sheets:
| Fair Value Measurements Using: | |||||||||||||||||||||||
| Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
| March 29, 2026 | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Available-for-sale securities | $ | 528.6 | $ | 528.6 | $ | — | $ | — | |||||||||||||||
| Derivative financial instruments | 3.4 | — | 3.4 | — | |||||||||||||||||||
| $ | 532.0 | $ | 528.6 | $ | 3.4 | $ | — | ||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Derivative financial instruments | $ | 5.9 | $ | — | $ | 5.9 | $ | — | |||||||||||||||
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
| Fair Value Measurements Using: | |||||||||||||||||||||||
| Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
| March 30, 2025 | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Available-for-sale securities | $ | 10.7 | $ | 10.7 | $ | — | $ | — | |||||||||||||||
| Derivative financial instruments | 5.0 | — | 5.0 | — | |||||||||||||||||||
| $ | 15.7 | $ | 10.7 | $ | 5.0 | $ | — | ||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Derivative financial instruments | $ | 2.1 | $ | — | $ | 2.1 | $ | — | |||||||||||||||
| December 28, 2025 | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Available-for-sale securities | $ | 106.0 | $ | 106.0 | $ | — | $ | — | |||||||||||||||
| Derivative financial instruments | 2.0 | — | 2.0 | — | |||||||||||||||||||
| $ | 108.0 | $ | 106.0 | $ | 2.0 | $ | — | ||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Derivative financial instruments | $ | 8.7 | $ | — | $ | 8.7 | $ | — |
Marketable securities are classified as available-for-sale since the Company does not have the positive intent and the capacity to hold the marketable securities until the maturity date. At March 29, 2026, the Company held $528.6 million of available-for-sale securities, of which $528.1 million consisted of U.S. Treasury securities. These investments are recorded at fair value within Short-term investments or Other assets in the Company's Consolidated Balance Sheets based on their contractual maturity dates, with an insignificant amount of unrealized gains and losses excluded from net income and deferred as a component of Other comprehensive earnings (loss), net of related tax effects, until realized. The accretion of discounts (or amortization of premiums) is accounted for in the Company's Consolidated Statements of Operations within Non-operating expense. At March 29, 2026, accrued interest receivable on available-for-sale securities totaled $8.6 million and was included within Accounts Receivable in the Consolidated Balance Sheets.
The Company's derivative financial instruments primarily consist of foreign currency forward and option contracts. The Company uses current forward rates of the respective foreign currencies to measure the fair value of these contracts. There were no changes in these valuation techniques during the three months ended March 29, 2026.
Other Fair Value Measurements
The Company's financial instruments include cash and cash equivalents, accounts receivable, short-term borrowings, accounts payable and certain accrued liabilities. At March 29, 2026, March 30, 2025, and December 28, 2025, the carrying cost of these instruments approximated their fair value. The Company's financial instruments at March 29, 2026, March 30, 2025, and December 28, 2025 also include certain assets and liabilities measured at fair value, as described above. Refer to Note 9, Long-Term Debt and Other Financing, to the consolidated financial statements for the fair value of the Company's outstanding debt.
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
(12) Leases
During the three months ended March 29, 2026, the Company obtained control over certain office and warehousing buildings that resulted in the commencement of two significant new leases. These leases are classified as operating leases and have initial lease terms ranging from 10 to 12 years.
The following is a reconciliation of future undiscounted cash flows to the operating liabilities, and the related right-of-use assets, included in our Consolidated Balance Sheets as of March 29, 2026:
| March 29, 2026 | |||||||||||||||||
| 2026 | $ | 31.4 | |||||||||||||||
| 2027 | 44.2 | ||||||||||||||||
| 2028 | 40.0 | ||||||||||||||||
| 2029 | 27.6 | ||||||||||||||||
| 2030 | 24.9 | ||||||||||||||||
| Thereafter | 181.3 | ||||||||||||||||
| Total future lease payments(4) | 349.4 | ||||||||||||||||
| Less: imputed interest | 68.1 | ||||||||||||||||
| Present value of future operating lease payments | 281.3 | ||||||||||||||||
| Less: current portion of operating lease liabilities(1) | 31.4 | ||||||||||||||||
| Non-current operating lease liability(2) | $ | 249.9 | |||||||||||||||
| Operating lease right-of-use assets, net(3) | $ | 247.3 |
(1) Included in Accrued liabilities on the Consolidated Balance Sheets
(2) Included in Other liabilities on the Consolidated Balance Sheets
(3) Included in Property, plant and equipment on the Consolidated Balance Sheets
(4) Lease cash flow activity is displayed net within the Statements of Cash Flows, total gross Right of Use Assets and Lease Liabilities added during the quarter were $157.1 million
Subsequent to the date of the financial statements, the Company entered into a non-cancelable operating lease for office space in West Hollywood, California. The lease is expected to commence in the second quarter of 2026 and has an initial lease term of approximately 12 years, with estimated aggregate future lease payments of approximately $25.2 million.
(13) Derivative Financial Instruments
The Company uses foreign currency forward and option contracts to mitigate the impact of currency rate fluctuations on firmly committed and projected future foreign currency transactions. These over-the-counter contracts, which hedge future currency requirements related to purchases of inventory, product sales and other cross-border transactions not denominated in the functional currency of the business unit, are primarily denominated in United States, Canadian and Hong Kong dollars as well as Euros and British pound sterling.
All contracts are entered into with a number of counterparties, all of which are major financial institutions. The Company believes that a default by a single counterparty would not have a material adverse effect on the financial condition of the Company. The Company does not enter into derivative financial instruments for speculative purposes. Cash flow activity associated with the Company's derivative financial instruments is recorded within cash flows from operating activities on the Consolidated Statement of Cash Flows.
Cash Flow Hedges
All of the Company's designated foreign currency forward contracts are considered to be cash flow hedges. These instruments hedge a portion of the Company's currency requirements associated with anticipated inventory purchases, product sales and other cross-border transactions.
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
The notional amounts and fair values of the Company's foreign currency forward contracts designated as cash flow hedging instruments were as follows:
| March 29, 2026 | March 30, 2025 | December 28, 2025 | |||||||||||||||||||||||||||||||||
| Notional Amount | Fair Value | Notional Amount | Fair Value | Notional Amount | Fair Value | ||||||||||||||||||||||||||||||
| Inventory purchases | $ | 220.5 | $ | (3.2) | $ | 194.8 | $ | 2.6 | $ | 199.9 | $ | (9.5) | |||||||||||||||||||||||
| Sales | 94.6 | 3.1 | 144.4 | (1.2) | 76.0 | 3.1 | |||||||||||||||||||||||||||||
| Other | 24.1 | (1.0) | 29.1 | 0.6 | 35.4 | (0.7) | |||||||||||||||||||||||||||||
| Total | $ | 339.2 | $ | (1.1) | $ | 368.3 | $ | 2.0 | $ | 311.3 | $ | (7.1) |
Undesignated Hedges
The Company also enters into foreign currency forward contracts to minimize the impact of changes in the fair value of intercompany loans due to foreign currency changes. The Company does not use hedge accounting for these contracts as changes in the fair values of these contracts are substantially offset by changes in the fair value of the intercompany loans. As of March 29, 2026, March 30, 2025 and December 28, 2025, the total notional amounts of the Company's undesignated derivative financial instruments were $173.6 million, $263.2 million, and $191.5 million, respectively.
Fair Value Measurement
The Company has a master agreement with each of its counterparties that allows for the netting of outstanding forward contracts. The fair values of the Company's foreign currency forward contracts designated as cash flow hedges are recorded in the Consolidated Balance Sheets as follows:
| March 29, 2026 | March 30, 2025 | December 28, 2025 | |||||||||||||||
| Prepaid expenses and other current assets: | |||||||||||||||||
| Unrealized gains | $ | 2.0 | $ | 5.0 | $ | 1.4 | |||||||||||
| Unrealized losses | (0.5) | (1.3) | (0.7) | ||||||||||||||
| Net unrealized gains | $ | 1.5 | $ | 3.7 | $ | 0.7 | |||||||||||
| Other assets: | |||||||||||||||||
| Unrealized gains | $ | 2.0 | $ | — | $ | 1.2 | |||||||||||
| Unrealized losses | (0.1) | — | (0.3) | ||||||||||||||
| Net unrealized gains | $ | 1.9 | $ | — | $ | 0.9 | |||||||||||
| Accrued liabilities: | |||||||||||||||||
| Unrealized gains | $ | 1.8 | $ | 0.8 | $ | 1.5 | |||||||||||
| Unrealized losses | (6.3) | (1.4) | (9.5) | ||||||||||||||
| Net unrealized losses | $ | (4.5) | $ | (0.6) | $ | (8.0) | |||||||||||
| Other liabilities: | |||||||||||||||||
| Unrealized gains | $ | — | $ | 0.2 | $ | — | |||||||||||
| Unrealized losses | — | (1.3) | (0.7) | ||||||||||||||
| Net unrealized losses | $ | — | $ | (1.1) | $ | (0.7) |
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
The fair values of the Company's undesignated derivative financial instruments were recorded in the Consolidated Balance Sheets as follows:
| March 29, 2026 | March 30, 2025 | December 28, 2025 | |||||||||||||||
| Prepaid expenses and other current assets: | |||||||||||||||||
| Unrealized gains | $ | — | $ | 1.7 | $ | 0.6 | |||||||||||
| Unrealized losses | — | (0.5) | (0.2) | ||||||||||||||
| Net unrealized gains | $ | — | $ | 1.2 | $ | 0.4 | |||||||||||
| Accrued liabilities: | |||||||||||||||||
| Unrealized gains | $ | 0.2 | $ | — | $ | — | |||||||||||
| Unrealized losses | (1.6) | (0.3) | — | ||||||||||||||
| Net unrealized losses | $ | (1.4) | $ | (0.3) | $ | — |
Net (losses) gains on cash flow hedging activities have been reclassified from Other comprehensive earnings, net of tax to Net earnings as follows:
| Three Months Ended | |||||||||||
| March 29, 2026 | March 30, 2025 | ||||||||||
| Statements of Operations Classification | |||||||||||
| Cost of sales | $ | (1.5) | $ | 1.1 | |||||||
| Net revenues | 0.6 | (0.3) | |||||||||
| Other | (0.2) | 0.1 | |||||||||
| Net realized (losses) gains | $ | (1.1) | $ | 0.9 |
In addition, the Company recorded a net loss of $2.5 million and a net gain of $2.2 million on its undesignated financial instruments for the three months ended March 29, 2026 and March 30, 2025, respectively, relating to the change in fair value of such derivative financial instruments, substantially offsetting gains and losses from the change in fair value of intercompany loans to which the contracts relate. Such amounts are recorded within Other (income) expense, net within the Consolidated Statements of Operations.
For additional information related to the Company's derivative financial instruments refer to Note 5, Other Comprehensive Earnings (Loss) and Note 11, Fair Value of Financial Instruments, to the consolidated financial statements.
(14) Restructuring Actions
Starting in 2022, the Company implemented its Operational Excellence program ("the Program"), an ongoing enterprise-wide initiative intended to improve our business through programs that include targeted cost-savings, supply chain transformation and certain other restructuring actions designed to drive growth and enhance shareholder value. The Company's organizational structure changes have resulted and will further result in workforce reductions as well as the reallocation of people and resources. The Company currently anticipates that these changes will be substantially complete over the next six to nine months.
Charges related to the Program were recorded in Selling, distribution and administration expense within Corporate and Other. Going forward, the Company may implement further cost-saving initiatives under the Program that could result in additional restructuring charges including severance and other employee charges.
The liability balance associated with the Program related restructuring actions consisted of severance payments recorded within Accrued liabilities in the Consolidated Balance Sheets as follows:
| Three Months Ended | |||||||||||||||||||||||
| March 29, 2026 | March 30, 2025 | ||||||||||||||||||||||
| Balance, beginning of period | $ | 19.3 | $ | 46.9 | |||||||||||||||||||
| Charges | 5.6 | 1.8 | |||||||||||||||||||||
| Payments | (9.6) | (9.6) | |||||||||||||||||||||
| Balance, end of period | $ | 15.3 | $ | 39.1 |
Total restructuring charges incurred to date under the Program as of March 29, 2026 equal $169.1 million.
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
(15) Commitments and Contingencies
Contingencies – The Company is subject to claims related to product and other commercial matters. In determining costs to accrue related to these items, the Company carefully analyzes cases and considers the likelihood of adverse judgments or outcomes, as well as the potential range of possible loss. The Company accrues for matters when losses are both probable and estimable. Any amounts accrued for these matters are monitored on an ongoing basis and are updated based on new developments or new information as it becomes available for each matter.
Litigation and Other Claims – The Company from time to time may be subject to lawsuits and other claims related to product, commercial, employee, environmental and other matters in the normal course of business. In determining costs to accrue related to these items, the Company carefully analyzes cases and considers the likelihood of adverse judgments or outcomes, as well as the potential range of possible loss. The Company accrues for matters when losses are both probable and estimable. Any amounts accrued for these matters are monitored on an ongoing basis and are updated based on new developments or new information as it becomes available for each matter.
Environmental Liabilities – The Company monitors for any estimated environmental contingencies related to its current physical locations and former owned or leased facilities in which it is responsible for environmental matters. The Company has estimated a $30.5 million environmental liability related to a previously owned manufacturing facility (environmental liability assumed as part of a historical acquisition), in which the Company is solely responsible for the mitigation and remediation activities.
Contractual obligations and commercial commitments, as detailed in the Company's 2025 Form 10-K, did not materially change outside of certain payments made in the normal course of business, except as disclosed above and in Note 9, Long-Term Debt and Other Financing, to the consolidated financial statements.
(16) Segment Reporting
The Company's reportable segments are strategic business units that offer different products and services. They are managed separately because the business requires different technology and marketing strategies. The Company's three reportable segments are as follows:
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The Wizards of the Coast and Digital Gaming business engages in the promotion of the Company's brands through the development of trading card, role-playing and digital game experiences based on Hasbro and Wizards of the Coast games. Additionally, we license certain of our brands to other third-party digital game developers who transform Hasbro brand-based characters and other intellectual properties, into digital gaming experiences.
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The Consumer Products segment engages in the sourcing, marketing and sales of toy and game products around the world. The Consumer Products business also promotes the Company's brands through the out-licensing of our trademarks, characters and other brand and intellectual property rights to third parties, through the sale of branded consumer products such as toys and apparel. Additionally, through license agreements with third parties, we develop and sell products based on popular third-party brands.
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The Entertainment segment engages in the development and production of Hasbro-branded entertainment content including film, television, children’s programming, digital content and live entertainment focused on Hasbro-owned properties.
Corporate and Other, which does not meet the criteria to be an operating segment, provides management and administrative services to the Company's reportable segments described above and consists of unallocated corporate expenses and administrative costs and activities not considered when evaluating segment performance as well as certain assets benefiting more than one segment.
Segment performance is measured at the operating profit level. Intersegment sales and transfers are reflected in management reports at amounts approximating cost. Certain shared costs, including global development and marketing expenses and corporate administration, are allocated to segments based upon expenses and foreign exchange rates fixed at the beginning of the year, with adjustments to actual expenses and foreign exchange rates included in Corporate and Other. We do not present a measure of total assets for our reportable segments as this information is not used by the chief operating decision maker ("CODM") to allocate resources and assess performance.
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
Information by segment and a reconciliation to reported amounts for the three months ended March 29, 2026 are as follows:
| Wizards of the Coast and Digital Gaming | Consumer Products | Entertainment | Corporate and Other | Total | ||||||||||||||||||||||||||||
| Revenues | $ | 652.9 | $ | 434.9 | $ | 33.7 | $ | (8.4) | $ | 1,113.1 | ||||||||||||||||||||||
| Less: Intersegment revenue | 70.9 | 37.0 | 13.4 | (8.4) | 112.9 | |||||||||||||||||||||||||||
| Total net revenues | 582.0 | 397.9 | 20.3 | — | 1,000.2 | |||||||||||||||||||||||||||
| Cost of sales | 94.5 | 140.9 | 0.6 | 0.1 | 236.1 | |||||||||||||||||||||||||||
| Program cost amortization | — | — | 4.0 | — | 4.0 | |||||||||||||||||||||||||||
| Royalties | 27.8 | 63.3 | (13.0) | (0.4) | 77.7 | |||||||||||||||||||||||||||
| Advertising | 34.5 | 25.9 | — | — | 60.4 | |||||||||||||||||||||||||||
| Amortization of intangible assets | 2.1 | 8.4 | 4.2 | (0.1) | 14.6 | |||||||||||||||||||||||||||
| Distribution (1) | 8.0 | 33.3 | — | 0.1 | 41.4 | |||||||||||||||||||||||||||
| Managed expense (2) | 117.4 | 173.6 | 7.2 | (2.5) | 295.7 | |||||||||||||||||||||||||||
| Operating profit (loss) | $ | 297.7 | $ | (47.5) | $ | 17.3 | $ | 2.8 | $ | 270.3 | ||||||||||||||||||||||
| Reconciliation to Earnings before income taxes: | ||||||||||||||||||||||||||||||||
| Interest expense | 41.8 | |||||||||||||||||||||||||||||||
| Interest income | 10.1 | |||||||||||||||||||||||||||||||
| Other income, net | 5.5 | |||||||||||||||||||||||||||||||
| Earnings before income taxes | $ | 244.1 |
(1) Distribution expenses consist of shipping and warehousing expense and is included in Selling, distribution and administration in the Consolidated Statement of Operations.
(2) Managed expenses consist of product development and selling and administrative expense. Product development is included in Product Development in the Consolidated Statement of Operations. Selling and administrative expense is included in Selling, distribution and administration in the Consolidated Statement of Operations.
Information by segment and a reconciliation to reported amounts for the three months ended March 30, 2025 are as follows:
| Wizards of the Coast and Digital Gaming | Consumer Products | Entertainment | Corporate and Other | Total | ||||||||||||||||||||||||||||
| Revenues | $ | 505.8 | $ | 433.4 | $ | 38.0 | $ | 28.9 | $ | 1,006.1 | ||||||||||||||||||||||
| Less: Intersegment revenue | 43.7 | 35.1 | 11.3 | 28.9 | 119.0 | |||||||||||||||||||||||||||
| Total net revenues | 462.1 | 398.3 | 26.7 | — | 887.1 | |||||||||||||||||||||||||||
| Cost of sales | 73.8 | 129.8 | 1.1 | (0.2) | 204.5 | |||||||||||||||||||||||||||
| Program cost amortization | — | — | 7.4 | — | 7.4 | |||||||||||||||||||||||||||
| Royalties | 10.2 | 50.7 | (8.4) | 4.5 | 57.0 | |||||||||||||||||||||||||||
| Advertising | 26.3 | 30.6 | 0.1 | (1.6) | 55.4 | |||||||||||||||||||||||||||
| Amortization of intangible assets | 2.1 | 10.1 | 4.7 | 0.1 | 17.0 | |||||||||||||||||||||||||||
| Distribution (1) | 9.0 | 31.8 | — | (0.7) | 40.1 | |||||||||||||||||||||||||||
| Managed expense (2) | 110.7 | 189.2 | 33.0 | 2.1 | 335.0 | |||||||||||||||||||||||||||
| Operating profit (loss) | $ | 230.0 | $ | (43.9) | $ | (11.2) | $ | (4.2) | $ | 170.7 | ||||||||||||||||||||||
| Reconciliation to Earnings before income taxes: | ||||||||||||||||||||||||||||||||
| Interest expense | 41.6 | |||||||||||||||||||||||||||||||
| Interest income | (8.9) | |||||||||||||||||||||||||||||||
| Other expense, net | 1.4 | |||||||||||||||||||||||||||||||
| Earnings before income taxes | $ | 136.6 |
(1) Distribution expenses consist of shipping and warehousing expense and is included in Selling, distribution and administration in the Consolidated Statement of Operations.
(2) Managed expenses consist of product development, selling and administrative expense, and loss on disposal of business. Product development is included in Product Development in the Consolidated Statement of Operations. Selling and administrative expense is included in Selling, distribution and administration in the Consolidated Statement of Operations. Loss on disposal of business is included in Loss on disposal of business in the Consolidated Statement of Operations. Managed expenses for the Entertainment segment included a $25.0 million non-cash loss associated with the sale of the eOne Film and TV business.
Condensed Notes to Consolidated Financial Statements
(Millions of Dollars and Shares Except Per Share Data)
Other supplemental information by segments is as follows:
| Three Months Ended | |||||||||||
| March 29, 2026 | March 30, 2025 | ||||||||||
| Depreciation and intangible asset amortization: (1) | |||||||||||
| Wizards of the Coast and Digital Gaming | $ | 4.4 | $ | 4.6 | |||||||
| Consumer Products | 15.7 | 18.2 | |||||||||
| Entertainment | 4.5 | 5.1 | |||||||||
| Corporate and Other | 1.3 | 6.3 | |||||||||
| Total | $ | 25.9 | $ | 34.2 | |||||||
| Additions to property, plant and equipment: | |||||||||||
| Wizards of the Coast and Digital Gaming | $ | 2.9 | $ | 1.7 | |||||||
| Consumer Products | 16.7 | 11.3 | |||||||||
| Entertainment | — | — | |||||||||
| Corporate and Other | 2.6 | 0.8 | |||||||||
| Total | $ | 22.2 | $ | 13.8 |
(1) The amounts of depreciation disclosed by reportable segments are included within Cost of sales and Selling, distribution and administration in the Consolidated Statement of Operations. Intangible asset amortization is included within Amortization of intangible assets in the Consolidated Statement of Operations.
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