Toymaker Hasbro reported upbeat quarterly numbers and raised its full-year guidance as the tariff situation remains fluid but may be shaping up to be less dire than the company anticipated three months ago.
Hasbro did take a hefty $1 billion write down on its consumer products business in part as retailers pushed holiday orders until later in the year give general economic uncertainty. But revenue from Magic: The Gathering surged 23% driven by the release of Final Fantasy, which set the record as being the biggest set release in Wizards history. “There’s more people playing Magic, and there are more people who have never played Magic who are now playing Magic, than ever before,” said CEO Chris Cox on a call.
The fantasy game went a long way to helping the company keep total sales (of $981 million) afloat and adjusted operating profit flat for the three months ended in March.
Mobile game Monopoly Go! was also a standout, contributing $44 million of revenue in the quarter.
Some 50% of Hasbro’s toy volume originates in China, a focus of Trump administration tariffs that have roiled international markets. The company (like others) is diversifying production and hopes to bring that down to under 40% by 2027 including eyeing opportunities to onshore more U.S. production, said CFO Gina Goetter on the call with analysts after the numbers.
This spring, the U.S. was flirting with a massive 145% tariff on China, which has come down significantly. Goetter said updated trade policies with China tariffs now at 30% and Vietnam, another big toy producer, at 20%, have eased some pressure.
“Last quarter, we were modeling a broad range of potential outcomes with a net impact of $60 to $180 million” in costs anticipated for 2025, she said. The reduced import taxes mean that number will stay at the low end of the range.
However, rates remain fluid, she cautioned.
Trump last night announced a trade deal with Japan and hinted at a pact with the European Union. Today the EU, one of America’s biggest trading partners, said it would hit the U.S. with 30% tariffs on over $100 billion worth of goods if the two sides don’t reach a deal by August 1 – the last deadline Trump set for trade agreements with countries around the world before he hits them with hefty duties.
At Hasbro, Cox touted the company’s entertainment offering in a licensing deal with Marvel as “second to none. Coming up, “we have Spider-Man, Star Wars and Avengers: Doomsday. That alone is a pretty stacked lineup and pretty meaningful top line growth across our Marvel portfolio.”
The Monopoly maker is working with Lionsgate on a feature film based on the classic board game as well as an unscripted competition series. Animated series Peppa Pig based on the Hasbro property was among the most watched licensed content on Netflix in the first half.
Hasbro shares popped in premarket trade on the numbers before retreating, trading off 2.8%. Shares of rival Mattel, which reports numbers after the bell, are up a hair.
