- Hasbro reported a powerful Q1 2025 due to a surge in a single enterprise phase. The corporate additionally left its fiscal 2025 steerage untouched regardless of different retailers making adjustments attributable to impending tariff implications. Different toymakers warn, although, tariffs may damage the whole trade.
Whereas many retailers have lowered steerage for this fiscal yr in anticipation of President Donald Trump’s barrage of tariffs, one toy firm is assured it may climate the storm.
Hasbro—the toymaker for all ages behind Play-Doh, Monopoly, Nerf, and Dungeons & Dragons—on Thursday reported a powerful first quarter of 2025. Income was up 17% and earnings per share beat estimates of $0.67 per share at $1.04.
Hasbro CEO Chris Cocks credited the quarter’s success to large development in its Wizards of the Coast phase, which produces each digital and tabletop video games. That phase’s income surged 46% in Q1 to $462 million. And Hasbro is so assured Wizards will proceed to develop, it is a part of the rationale the corporate left steerage for the yr unchanged regardless of different retailers pulling again out of concern for tariff implications.
“Regardless of macro uncertainty … Wizards outperformance, and accelerated value financial savings provides us a line of sight to delivering on our full-year monetary commitments,” Hasbro CFO Gina Goetter mentioned through the earnings name.
Plus, Wizards has low tariff publicity, with lower than $10 million anticipated in responsibility for the yr, Cocks mentioned through the firm’s earnings name on Thursday. Many of the firm’s home provide chain is produced in North Carolina and Texas, he defined, with the rest in Kyoto, Japan.
“Whereas our toys phase faces larger publicity, we’re responding proactively,” he mentioned. “Our asset-light sourcing mannequin means we are able to quickly shift manufacturing to assist mitigate tariff impacts.”
Having success with digital merchandise helps Hasbro’s revenues, significantly the place tariffs are concerned.
Hasbro advantages from “an emphasis on digital that limits the affect of tariffs,” David Mayer, senior accomplice of selling and shopper technique with branding consultancy Lippincott, advised Fortune. Rival toy corporations have a “larger share of gross sales in bodily toys, which exposes them extra to each tariffs and cash-stretched dad and mom reducing again on one-off purchases.”
Hasbro additionally in February unveiled a $1 billion cost-saving plan known as “Taking part in to Win,” which runs via 2027. The five-pillar plan focuses on constructing worthwhile franchises, making extra toys interesting to individuals age 13 and older, increasing into rising markets, constructing video video games, and driving new retail and licensing partnerships.
“We’re accelerating our $1 billion cost-savings plan to offset tariff pressures internally,” Cocks mentioned. “Whereas focused pricing actions stay seemingly, we’re prioritizing key value factors and strengthening retail partnerships.”
Nevertheless, different toymakers aren’t as assured their trade can fight the impacts of impending tariffs.
“Hasbro’s latest earnings report showcases the energy of their video games,” Isaac Larian, founder and CEO of MGA Leisure, advised Fortune. “However let’s be clear: These numbers don’t replicate the storm that’s coming.”
MGA Leisure is the maker of Bratz, L.O.L. Shock!, Child Born, Little Tikes, Rainbow Excessive, and extra, and Larian mentioned each main toy firm—together with his and Hasbro—is closely reliant on imports, significantly from China. If tariffs stay in place, Larian warned shoppers are in for value will increase and corporations must be ready for shrinking margins.
“Customers, particularly households already feeling squeezed, would be the ones that suffer,” Larian mentioned. “Come this Christmas, we’re taking a look at main shortages throughout toy aisles, with costs up by double digits or extra.”
Mattel, one other main toy producer, will announce its newest earnings in early Might.
This story was initially featured on Fortune.com
