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HASBRO, INC. (HAS)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered a clear beat: revenue $887.1M (+17% YoY) and adjusted EPS $1.04, both above Wall Street consensus; reported EPS was $0.70, reflecting non-GAAP items . Consensus EPS was $0.67* and revenue $770.6M*; actuals were well above these levels. Values retrieved from S&P Global.
  • Mix shift to high-margin Wizards and Digital Gaming drove adjusted operating margin to 25.1% (+550 bps YoY) and adjusted operating profit to $222M (+50% YoY) .
  • Guidance: consolidated FY 2025 outlook unchanged, but Wizards full-year raised to mid-to-high teens revenue growth with low-40s operating margin; gross cost savings target accelerated to $175–$225M for 2025 .
  • Strategic catalysts: extension of multi-year Disney Consumer Products agreement for Marvel and Star Wars (strengthening toys, games, and MAGIC Universes Beyond tie-ins), plus strong pipeline for MAGIC (Final Fantasy, Spider-Man) and digital (Monopoly GO!) .

What Went Well and What Went Wrong

What Went Well

  • Wizards of the Coast and Digital Gaming revenue +46% driven by MAGIC: THE GATHERING (+45%) and digital/licensed gaming; segment operating margin expanded to 49.8% (+11 pts) .
  • Management raised Wizards full-year guide (mid-to-high teens revenue growth; low-40s margin) on broad-based demand, with Final Fantasy “best-selling set of all time on day 1” and Spider-Man/Avatar sets building excitement .
  • Strategic partnerships strengthened: multi-year extension with Disney for Marvel and Star Wars, supporting toys and games across preschool, Play-Doh, action and role play categories .
    • CEO: “Our collaboration with one of the world’s most valuable brand portfolios has never been stronger.”

What Went Wrong

  • Consumer Products revenue -4% (ahead of plan) with operating margin at -11.0%; adjusted operating margin -7.8% as higher royalties and advertising offset lower OpEx .
  • Entertainment revenue -5% YoY on deal timing; GAAP operating loss of $11.2M (vs. $5.8M profit in Q1’24), adjusted operating profit roughly flat ($17.4M vs. $18.2M) .
  • Operating cash flow decreased to $138.1M from $177.8M last year due to working capital (AR timing) .
  • Tariffs present 2025 headwinds: modeled gross impact $100–$300M (net $60–$180M after mitigations); uncertainty around reciprocal tariffs across global hubs and retailer order patterns (DI vs. DOM) .

Financial Results

Consolidated Results vs Prior Year and Prior Quarter

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$757.3 $1,101.6 $887.1
Diluted EPS (GAAP) ($)$0.42 $(0.25) $0.70
Adjusted Operating Profit ($USD Millions)$148.6 $112.7 $222.4
Adjusted Operating Margin (%)19.6% 10.2% 25.1%
Adjusted EPS ($)$0.61 $0.46 $1.04

Versus Wall Street Consensus (S&P Global)

MetricConsensusActual
EPS ($)0.67*1.04
Revenue ($USD Millions)770.6*887.1
Values retrieved from S&P Global.

Segment Breakdown (Q1 2025 vs Q1 2024)

SegmentQ1 2024 Revenue ($M)Q1 2025 Revenue ($M)YoY ChangeQ1 2024 Op Margin (%)Q1 2025 Op Margin (%)
Wizards of the Coast & Digital Gaming$316.3 $462.1 +46% 38.8% 49.8%
Consumer Products$413.0 $398.3 -4% -11.4% -11.0%
Entertainment$28.0 $26.7 -5% 20.7% -41.9%
Corporate & Other (Op Profit)$34.5 $(4.2) n/an/an/a

KPIs and Additional Details (Q1 2025)

KPIQ1 2024Q1 2025
MAGIC: THE GATHERING Revenue ($M)$237.9 $346.3
Total Gaming Revenue ($M)$408.0 $550.1
Monopoly GO! Revenue Contribution ($M)n/a$39.0
Adjusted EBITDA ($M)$172.8 $274.3
Operating Cash Flow ($M)$177.8 $138.1
Dividend per Share ($)$0.70 $0.70; declared payable June 4, 2025

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated Revenue (cc)FY 2025Slightly up YoY Unchanged Maintained
Adjusted Operating MarginFY 202521–22% Unchanged Maintained
Adjusted EBITDA ($B)FY 20251.10–1.15 Unchanged Maintained
Wizards Revenue GrowthFY 2025+5–7% Mid-to-high teens Raised
Wizards Operating MarginFY 202539–40% Low 40s Raised
Consumer Products RevenueFY 2025Flat to -4% Unchanged (wide range given tariffs) Maintained
Consumer Products Op MarginFY 20258–10% Unchanged (swing depends on tariffs) Maintained
Gross Cost SavingsFY 2025n/a$175–$225M targeted Raised near-term savings
DividendQ2 2025$0.70 declared (March in prior release) $0.70 declared payable June 4, 2025 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 / Q4 2024)Current Period (Q1 2025)Trend
Tariffs & MacroCautious category outlook; mix to games/licensing; CP guide down in H2 2024; DI vs. DOM shifts noted Modeled gross impact $100–$300M (net $60–$180M) in 2025; assume 145% China and 10% ROW; retailer phasing shifts (DI→DOM) Heightened uncertainty; robust mitigation plan
Supply Chain DiversificationInventory clean-up, cost productivity; DI smooth in H2 2024 Accelerating plans to bring China exposure down below 40% for U.S. volume; 2026 timeline; category-dependent shift Accelerating; mid-term cost headwind
Digital Gaming (Monopoly GO!)~$10M/month expected; $105M FY24; high UA spend; durable annuity Q1 contribution $39M; run-rate ~$10M/month outlook maintained; Star Wars event upcoming Durable contributor
MAGIC Universes BeyondMarvel Secret Lair, strong tentpoles; 2025 pipeline noted Raised Wizards guide; Final Fantasy best day-1 ever; Spider-Man and Avatar sets Strengthening
Consumer Products Pricing & ValueEmphasis on sub-$10 and sub-$20 price points, innovation, licensing Selective pricing to protect $9.99/$19.99 tiers; partner-led demand; retail collaboration Focused execution
PartnershipsStrong licensing, LEGO/Digital Eclipse, Scopely Disney Consumer Products extension for Marvel/Star Wars Expanded scope

Management Commentary

  • Strategy and mix: “Play focused, partner scaled, and performing. Revenue rose 17% led by a surging MAGIC business and continued strength in licensing.”
  • Wizards outlook: “Final Fantasy will be the best-selling set of all time on day 1… store count up 20%… Universes Beyond increased the active installed base.”
  • Tariff posture: “Our guidance is based off of 145% [China] and 10% reciprocal everywhere else… We believe there should be free and fair trade for toys.”
  • Pricing strategy: “We are going to have to raise prices inside of [the] 145% tariff regime… try to do it as selectively as possible and minimize the burden.”
  • Cost transformation: “Now targeting $175–$225 million in gross savings this year… accelerating elements of our cost savings program.”

Q&A Highlights

  • Tariffs impact and modeling: Management outlined $100–$300M gross headwind with $60–$180M net after mitigation; assumptions include 145% China/10% ROW, with retailer order timing shifts from DI to DOM .
  • Wizards guidance mechanics: Strong Q1, healthy MAGIC set cadence; Q2 down YoY on lapping licensing settlement and mix, but margins remain healthy despite rising royalties .
  • Retailer conversations: Fluid inventory management; no significant cancellations at “big 3”; white-space shelf opportunities emerging .
  • Supply chain timing: Diversification largely a 2026 event; category-dependent feasibility (electronics/high-deco/foam stickier in China) .
  • Monopoly GO!: Momentum sustained with major partner events (Star Wars); Hasbro maintains ~$10M/month licensing revenue outlook .

Estimates Context

  • Q1 2025 delivered a significant beat versus Wall Street: EPS $1.04 vs $0.67*; revenue $887.1M vs $770.6M*. Values retrieved from S&P Global.
  • Implications: Consensus likely to move higher for Wizards margins and revenues given raised segment outlook; Consumer Products estimates may widen given tariff scenario ranges communicated by management .

Key Takeaways for Investors

  • The quarter’s beat was driven by Wizards and Digital Gaming mix, with adjusted margin expanding to 25.1%; this mix strength provides a buffer against tariff-related uncertainty .
  • Raised Wizards FY guide and Disney extension are tangible catalysts; near-term set launches (Final Fantasy, Spider-Man) support continued momentum .
  • Consumer Products remains the swing factor; monitor Q2 DI→DOM shifts and pricing actions at protected price points ($9.99/$19.99) .
  • Tariff path is the key macro variable—management modeled worst case and accelerated cost offsets; watch for policy clarity and retailer behavior into holiday resets .
  • Cash generation softer YoY on working capital timing; balance sheet strengthening continues (debt reduction, leverage target 2.5x by 2026) .
  • Dividend maintained at $0.70 and payable June 4; shareholder returns remain a priority alongside debt paydown .
  • Trading lens: Strong beat and raised Wizards guide are positive; any tariff relief or evidence of CP resilience could be an upside catalyst. Conversely, sustained tariff pressure or retailer order delays would be near-term headwinds .