Hasbro beats second-quarter expectations as gaming division offsets tariff-fueled toy slump
"While tariffs represent a headwind for the business," Hasbro's CEO Chris Cocks said on the company's earnings call. "We are compensating for these costs through a combination of cost reductions, rebalancing our marketing spend, diversifying our supplier mix and implementing some targeted pricing actions."
Shares fell roughly 4% in Wednesday morning trading.
Here's how the company performed in the quarter ended June 29 compared to what Wall Street was expecting.
The toy company reported a net loss of $855.8 million, or $6.10 per share, for the period, compared with net income of $138.5 million, or 99 cents per share, in the same quarter a year ago.
Hasbro attributed the loss to a $1 billion goodwill impairment related to its consumer products segment and the impact of tariffs.
Overall revenue declined 1% from the same quarter last year, but the company's gaming division continued to outperform. Wizards of the Coast and digital gaming brought in $522.4 million in sales, up 16% year over year. Hasbro cited strong demand for Magic: The Gathering and Monopoly Go!
"This isn't just a one-off moment. It's a clear indication of the power of Magic's community," Cocks said. "Magic is stronger than ever, and we're just getting started."
Meanwhile, the company's consumer products segment saw revenue fall 16% to $442.4 million, pressured by "anticipated softness in Toys driven by retailer order timing and geographic volatility," Hasbro said in the release.
Revenue in the entertainment segment dropped 15% to $16 million.
Hasbro raised its full-year guidance and now expects mid-single-digit revenue growth, adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, of between $1.17 billion and $1.2 billion, and adjusted operating margins of 22% to 23%.
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