Hasbro Delivers Upside Surprise, Says New Game Plan Is Working

Hasbro stock soared following a first-quarter earnings report that beat expectations. Executives also eased investors’ concerns about tariffs by outlining steps they have taken to mitigate the impact.

The toy company’s stock was up more than 16% at midday, after it reported first quarter revenue was up 17% over the prior year. It reported adjusted earnings per share of $1.07, more than 50% higher than forecast by analysts.

Again, Hasbro’s growth was driven primarily by the strength of its Wizards of the Coast and Digital Gaming segment. Revenue for that segment was up 46%, thanks to new releases in its Magic: The Gathering brand, and ongoing licensing revenue from the Monopoly Go! mobile game.

Sales of traditional toys were down 4%, but that was significantly better than expectations.

The market’s response today parallels the reaction when Hasbro reported its fourth quarter and full-year earnings results at the end of February. Then, the stock market reacted with enthusiasm to its cost-cutting and inventory control measures, sending the stock up more than 12% immediately after the earnings release.

Kidults Are Key Growth Drivers For Hasbro

In unveiling the “Playing to Win” game plan, Hasbro said it would emphasize digital gaming, and products geared toward teen and adult consumers – the kidult category – as key growth drivers.

Chris Cocks, Hasbro CEO, in a conference call with investors, said the results are evidence that the strategic plan Hasbro announced in February, called “Playing to Win” is working.

The first quarter “delivered another clear proof point of our Playing to win strategy at work – play-focused, partner-scaled, and performing,” Cocks said.

Cocks also reassured Wall Street about the tariffs trade war, saying that Hasbro is well positioned to weather any impact, due to its digital revenue and strong level of domestic sourcing and diversified foreign sourcing.

The company did note, however, that price hikes will be necessary on some products if the 145% tariffs on goods made in China go into effect. Hasbro might decide to not move forward with certain toys if the price to sell them profitably would be too high.

Consumer-Friendly Price Points For Hasbro

The company plans to prioritize products it can offer at “critical consumer-friendly price points, particularly $9.99 and $19.99,” Cocks said during the earnings call.

Hasbro announced that it is not changing its full year guidance, “given the uncertainty of the current tariff environment.”

James Zahn, Editor-in-Chief of leading trade publication The Toy Book, sees Hasbro’s firm stance on its 2025 guidance “as a great signal of optimism that global trade concerns will soon find a resolution.”

“Across the board, Hasbro’s supply chain and sourcing improvements over the past couple of years have prepared them for moments of uncertainty,” Zahn said. “The company was ahead of the game in reducing reliance on China to supply the U.S. market by several years, and the current tariff conflict is accelerating additional shifts,” he said.

In addition, being better able to weather the tariff impact could allow Hasbro to gain market share in traditional toys.

“There is a big opportunity to gain shelf space and market share as smaller companies that cannot weather the tariff store lose the ability to fill orders or fill them at a reasonable price,” Zahn said.

The unexpectedly strong results for the first quarter are good news not just for Hasbro, but for the overall toy industry, Zahn said.

“The industry desperately needs good news and a morale boost amid another year of challenges,” Zahn said. He expects 2025 to be a growth year for the U.S. toy industry as a whole, but only if the tariff situation is resolved quickly.