- Hasbro reported a strong Q1 2025 thanks to a surge in one business segment. The company also left its fiscal 2025 guidance untouched despite other retailers making changes due to impending tariff implications. Other toymakers warn, though, that tariffs could hurt the entire industry.
While many retailers have lowered guidance for this fiscal year in anticipation of President Donald Trump’s barrage of tariffs, one toy company is confident it can weather the storm.
Hasbro—the toymaker for all ages behind Play-Doh, Monopoly, Nerf, and Dungeons & Dragons—on Thursday reported a strong first quarter of 2025. Revenue 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 massive growth in its Wizards of the Coast segment, which produces both digital and tabletop games. That segment’s revenue surged 46% in Q1 to $462 million. And Hasbro is so confident Wizards will continue to grow, it’s part of the reason the company left guidance for the year unchanged despite other retailers pulling back out of fear for tariff implications.
“Despite macro uncertainty… Wizards’ outperformance, and accelerated cost savings, gives us a line of sight to delivering on our full-year financial commitments,” Hasbro CFO Gina Goetter said during the earnings call.
Plus, Wizards has low tariff exposure, with less than $10 million expected in duty for the year, Cocks said during the company’s earnings call on Thursday. Most of the company’s domestic supply chain is produced in North Carolina and Texas, he explained, with the remainder in Kyoto, Japan.
“While our toys segment faces higher exposure, we’re responding proactively,” he said. “Our asset-light sourcing model means we can rapidly shift production to help mitigate tariff impacts.”
Having success with digital products helps Hasbro’s revenues, particularly where tariffs are involved.
Hasbro benefits from “an emphasis on digital that limits the impact of tariffs,” David Mayer, senior partner of marketing and consumer strategy with branding consultancy Lippincott, told Fortune. Rival toy companies have a “greater percentage of sales in physical toys, which exposes them more to both tariffs and cash-stretched parents cutting back on one-off purchases.”
Hasbro also in February unveiled a $1 billion cost-saving plan called “Playing to Win,” which runs through 2027. The five-pillar plan focuses on building profitable franchises, making more toys appealing to people age 13 and older, expanding into emerging markets, building video games, and driving new retail and licensing partnerships.
“We’re accelerating our $1 billion cost-savings plan to offset tariff pressures internally,” Cocks said. “While targeted pricing actions remain likely, we are prioritizing key price points and strengthening retail partnerships.”
However, other toymakers aren’t as confident their industry can combat the impacts of impending tariffs.
“Hasbro’s recent earnings report showcases the strength of their games,” Isaac Larian, founder and CEO of MGA Entertainment, told Fortune. “But let’s be clear: Those numbers don’t reflect the storm that’s coming.”
MGA Entertainment is the maker of Bratz, L.O.L. Surprise!, Baby Born, Little Tikes, Rainbow High, and more, and Larian said every major toy company—including his and Hasbro—is heavily reliant on imports, particularly from China. If tariffs remain in place, Larian warned consumers are in for price increases and companies should be prepared for shrinking margins.
“Consumers, especially families already feeling squeezed, will be the ones who suffer,” Larian said. “Come this Christmas, we’re looking at major shortages across toy aisles, with prices up by double digits or more.”
Mattel, another major toy manufacturer, will announce its latest earnings in early May.
This story was originally featured on Fortune.com
Recent Comments