Play-Doh Barbie, a Hasbro toy resulting from a rare collaboration with Mattel, is one of the toys ... More that could be hard to find during the holidays due to tariff impact.Joan VerdonSales of traditional toys by the country’s two largest toy manufacturers, Hasbro and Mattel, fell during the second quarter, due to delayed ordering by retailers worried about possible price increases, the companies said in releasing their earnings reports Wednesday.Both companies said they believe they are well positioned t ...

Hasbro says it has magic to thank for muting the impact of tariffs this quarter.By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions .Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.More to the point, Magic the Gathering, the collectible card game from the company’s W ...

Financial Data and Key Metrics Changes - Net revenue for Q2 2025 was $981 million, essentially flat year over year, driven by the strength of the Magic segment [19] - Adjusted operating profit was $247 million with an adjusted operating margin of 25.2%, up 20 basis points from the previous year [19] - Adjusted earnings per diluted share rose to $1.30, a 7% increase year over year, attributed to favorable mix and margin discipline [20] Business Line Data and Key Metrics Changes - Wizards of the Coast and digital gaming segment revenue grew 16% to $522 million, led by The Gathering, which delivered 23% growth [20] - Consumer products revenue declined 16% to $442 million, primarily due to retailer order timing and market softness in select geographies [21] - Entertainment segment revenue was $16 million, in line with expectations, contributing $10 million in adjusted operating profit [22] Market Data and Key Metrics Changes - North America saw a decline in consumer products sales, while EMEA and APAC regions performed well and are expected to end the year in growth mode [14] - The organized play segment saw a nearly 40% year-over-year increase in unique players during the first half of 2025, indicating strong community engagement [11] Company Strategy and Development Direction - The company is focused on its "Playing to Win" strategic plan, emphasizing premium, high-margin segments like Wizards, licensing, and digital [6] - A new exclusive publishing agreement for a Dungeons and Dragons action-adventure game was announced, reflecting the company's commitment to investing in top-tier talent and expanding digital engagement [13] - The company is diversifying its supply chain to reduce reliance on China, aiming to bring that exposure down to less than 40% by 2027 [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to growth in 2025, backed by record operating margins and strong performance across diversified portfolios, especially in the Magic segment [18] - The company raised its full-year guidance for revenue, margin, and adjusted EBITDA, reflecting continued strength in the Wizards business and improved visibility into the back half of the year [28] - Management acknowledged the impact of tariffs but noted that the current rates are more favorable than previously anticipated, leading to a lower expected expense in 2025 [24] Other Important Information - A non-cash goodwill impairment charge of $1 billion was recorded in the consumer products segment due to the impact of tariffs and trade uncertainty [25] - The company is on track to achieve $175 million to $225 million in gross cost savings this year, prioritizing investments in core growth engines while maintaining financial flexibility [29] Q&A Session Summary Question: Can you discuss the demand for Final Fantasy and how it compared to expectations? - Management noted that Final Fantasy exceeded expectations, achieving $200 million in revenue within one day, significantly faster than previous major releases [36][38] Question: How do you view the midterm outlook and potential for operating margin expansion? - Management reaffirmed the midterm outlook, indicating that while this year is outperforming expectations, they still see a path to growth despite potential headwinds [52][54] Question: What is the health of the Magic player base and the impact of Universes Beyond sets? - The unique player base in organized play increased by 40% year over year, with Universes Beyond sets effectively bringing in new players [123]

Core Insights - Hasbro Inc (NASDAQ:HAS) is experiencing a significant increase in stock price, currently trading at $76.48, up 3.6%, following an upgrade from Goldman Sachs to "buy" from "neutral" [1] - Goldman Sachs raised its price target for Hasbro from $66 to $85, highlighting the strength of the Wizards of the Coast unit and a resilient core toy business [1] Stock Performance - Since reaching a 52-week low of $49.00 on April 9, Hasbro's stock has been on an upward trend, recently finding support at the 20-day moving average, and is up 36.8% year-to-date [2] - The stock has achieved its fourth consecutive weekly gain, indicating positive momentum heading into the second half of the year [2] Analyst Ratings - The majority of analysts covering Hasbro are bullish, with all but one of the 14 analysts rating the stock as "buy" or better, suggesting potential for further price-target increases [3] - The 12-month consensus price target stands at $79.04, which is close to the current trading levels, indicating room for upward adjustments [3] Options Market Activity - Options traders are showing increased bullish sentiment, with a 10-day call/put volume ratio of 3.32, ranking higher than 73% of readings from the past year [4] - Hasbro's options prices are currently reasonable, as indicated by a Schaeffer's Volatility Index (SVI) of 25%, which is in the low 8th percentile of its annual range [4]

Financial Data and Key Metrics Changes - Revenue increased by 17% to $887 million, driven by strong performance in the Magic business and licensing [22][8] - Adjusted operating profit rose 50% to $222 million, with an adjusted margin of 25.1%, a 5.5 percentage point improvement year-over-year [22][9] - Adjusted earnings per diluted share increased by 70% to $1.04, reflecting top-line growth and margin expansion [22][23] Business Segment Data and Key Metrics Changes - Wizards of the Coast segment revenue grew 46% to $462 million, with Magic revenue up 45% due to strong demand for recent releases [23][24] - Consumer products revenue declined by 4% to $398 million, but the adjusted operating loss improved by 18% to $31 million [26][22] - The entertainment segment saw a modest decline of 5% in revenue to $27 million, primarily due to deal timing [27] Market Data and Key Metrics Changes - The company noted minimal impact from tariffs in Q1, with a focus on maintaining low costs and healthy margins through domestic sourcing [28][26] - Approximately 50% of the US toy and game volume originates from China, with plans to reduce this significantly [31][30] Company Strategy and Development Direction - The company is accelerating a $1 billion cost savings plan to offset tariff pressures and is prioritizing key price points to capture market share [12][22] - A multi-decade licensing agreement with Disney for Marvel and Star Wars was extended, enhancing category rights [14][15] - The company is diversifying its sourcing to mitigate tariff impacts, with a target to reduce China exposure below 40% by 2026 [111][112] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the current global trade environment and the potential for higher consumer prices due to tariffs [16][17] - The guidance remains unchanged, supported by strong performance in games and licensing, but prolonged tariff conditions create unpredictability [33][39] - The company is optimistic about the resilience of the toy category, viewing it as a small luxury that tends to perform better than other discretionary categories [50][51] Other Important Information - The company generated $138 million in operating cash and returned $98 million to shareholders via dividends [28][29] - The company is committed to maintaining a balanced approach to capital allocation, focusing on core growth engines while prioritizing debt reduction [41][42] Q&A Session Summary Question: How are tariffs impacting consumer spending? - Management sees potential impacts on consumer spending similar to the 2008 recession, with the toy category expected to remain resilient [49][50] Question: What are the conversations with retailers regarding order patterns? - Retailers are managing inventory fluidly, with no significant cancellations observed, and discussions are ongoing about pricing strategies [54][55] Question: Will prolonged tariffs create structural costs? - Yes, there will be incremental tariff exposure next year if current duties continue, but the company is diversifying its supply chain to mitigate this [69][70] Question: How is the company managing pricing in light of tariffs? - The company is focused on maintaining consistent prices for consumers and is discussing pricing strategies with retailers [59][60] Question: What is the outlook for the Wizards segment? - The Wizards segment is expected to perform well, with strong demand signals and a raised full-year outlook [36][80] Question: How is the company addressing manufacturing shifts from China? - The company is accelerating its diversification efforts, with plans to reduce reliance on China for manufacturing [30][31]

Core Viewpoint - Hasbro is facing significant financial impacts due to potential tariffs from the ongoing trade war, with estimates of a $300 million hit to its bottom line if the 145% levy on imports from China is implemented [1][2]. Financial Performance - Hasbro reported better-than-expected earnings, but the focus of investors and analysts was primarily on the implications of the trade war [1]. - The company maintained its full-year guidance, projecting a gross impact of $100 million to $300 million across the enterprise in 2025, depending on various tariff scenarios [2]. Tariff Impact - The CFO indicated that the forecast considers scenarios for China tariffs ranging from 50% to 145%, with an additional 10% for the rest of the world [2]. - CEO Chris Cocks noted that prolonged tariff conditions could lead to structural costs and increased market unpredictability, ultimately resulting in higher consumer prices [2]. Business Resilience - Despite the challenges, Hasbro believes it is well-positioned due to its robust games and licensing businesses and strategic flexibility [2]. - The U.S. games business benefits from digital and domestic sourcing, with many board games produced in Massachusetts [2]. - The Wizards of the Coast division has limited tariff exposure, with less than $10 million at risk due to domestic production in North Carolina, Texas, and Japan [2].