In the first quarter of 2025, Hasbro reported strong financial results, driven by significant growth in one of its business segments. Despite the looming threat of tariffs, which has led other retailers to adjust their fiscal guidance, Hasbro maintained its 2025 projections. This comes as other toy manufacturers express concern over potential tariff impacts on the industry.
Amid an economic landscape where many retailers are revising forecasts in response to anticipated tariffs under President Donald Trump’s administration, Hasbro remains optimistic about its ability to navigate these challenges. The company, known for iconic brands such as Play-Doh, Monopoly, Nerf, and Dungeons & Dragons, reported a 17% increase in revenue for the first quarter, surpassing earnings per share estimates with $1.04 compared to the forecasted $0.67.
Chris Cocks, the CEO of Hasbro, attributed the strong quarterly performance to an impressive 46% revenue increase in the Wizards of the Coast segment, responsible for digital and tabletop games. This growth is a key reason Hasbro decided not to alter its fiscal guidance despite the tariff concerns affecting other retailers.
Gina Goetter, Hasbro’s CFO, expressed confidence during the earnings call, stating that the success of Wizards, along with accelerated cost-savings measures, ensures the company can meet its full-year financial commitments despite macroeconomic uncertainties.
Wizards of the Coast’s low exposure to tariffs, with expected duties less than $10 million, was highlighted by Cocks. He explained that most of Hasbro’s domestic supply chain is based in North Carolina and Texas, while the rest is based in Kyoto, Japan. While the toys segment faces higher tariff exposure, Cocks assured that Hasbro’s asset-light sourcing model allows for flexible production adjustments to minimize tariff impacts.
David Mayer, a senior partner at branding consultancy Lippincott, noted that Hasbro’s digital product focus mitigates tariff effects. In contrast, rival toy companies may face challenges due to a higher percentage of sales in physical toys, making them vulnerable to both tariffs and consumer spending cutbacks.
In February, Hasbro introduced a “Playing to Win” strategy, aiming to save $1 billion by 2027. The plan comprises five pillars, including developing profitable franchises, enhancing appeal to consumers aged 13 and older, expanding in emerging markets, creating video games, and forging new retail and licensing partnerships. Cocks emphasized the acceleration of this cost-savings plan to counter internal tariff pressures, indicating potential targeted pricing adjustments and strengthened retail partnerships.
However, other toymakers, like MGA Entertainment, voiced concerns about the broader industry’s ability to handle upcoming tariff challenges. Isaac Larian, MGA’s CEO, acknowledged Hasbro’s success but warned of future difficulties. He noted that major toy companies, including MGA and Hasbro, heavily depend on imports, particularly from China. If tariffs persist, Larian cautioned that consumers could face price hikes, and companies could see reduced margins, potentially leading to shortages and increased prices in toy sections by Christmas.
Mattel, another leading toy manufacturer, is scheduled to release its latest earnings in early May. This report was originally featured on Fortune.com.
