Hasbro CEO on $600 Star Wars Ultimate Grogu, collectibles, and earnings beat

Hasbro (HAS) CEO Chris Cocks says the company’s first quarter defied conventional thinking that US consumers are pulling back due to high gas prices and a new wave of inflation.

The reason is simple: People are prioritizing their kids.

“There's birthdays, Christmas, etc. They're going to make sure their kids are taken care of. And toys are a small kind of thing that brings joy to a household. And then I think the second thing, it's a small luxury for people. You know, when the price of going out to dinner eclipses $100, when filling up your tank eclipses $70 to $80, it's nice just to buy a fun thing from a fandom that you love that's accessible,” Cocks said on Yahoo Finance’s Opening Bid (video above).

Despite several wins for Hasbro in the quarter, shares fell 8% in Wednesday trading. The company maintained a cautious outlook for the balance of the year amid uncertainty on demand and more normalized growth in “Magic: The Gathering.”

Top comments from Yahoo Finance’s Chat with Cocks

• On Star Wars: “Ultimate Grogu is probably the highest-end collectible we've ever created. Sold out, I think, in about 20 minutes when we put it for sale on Hasbro Pulse. And I think it's just one of many, many really cool toys that we have coming out for the ‘Mandalorian and Grogu’ movie, which opens this weekend. ”

• On the hot collectibles market: “I think collectibles are a way to kind of bond with others. And, you know, just creates friendships and ways to express your fandom. So that's thing one; I think thing two is collectibles really started taking off, particularly trading cards, in the 90s. So a bunch of people who were between the ages of 6 to 10, from 1993 to 1999, when “Magic” was invented and Pokémon were invented, now they're in their 30s and 40s and their prime earning years, and they want to go back and collect the things that they loved as children. ”

• On Hasbro’s $50 million tariff refund claim: “In our guidance, we don't have any tariff refunds baked in. I think if we get them this year, it would be late in the year.”

First quarter earnings analysis

• Net sales: +13% year over year to $1 billion, vs. estimates for $962.9 million

• Diluted earnings per share: +41% year over year to $1.47, vs. estimates for $1.20

What else caught our attention

• Reiterated 2026 outlook: 1) Sales up 3% to 5% in constant currency; 2) Adjusted operating margin of 24% to 25%; 3) Adjusted EBITDA of $1.40 billion to $1.45 billion.

• 1Q Wizards of the Coast & Digital Gaming segment operating margins: 51.2% versus 49.8% last year.

• 1Q Consumer Products segment operating margins: -10.2% versus -7.8% last year.