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HASBRO, INC. (HAS)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $1.3875B (+8% YoY), GAAP diluted EPS $1.64 and adjusted diluted EPS $1.68; both revenue and EPS exceeded Wall Street consensus, which stood at $1.3475B and $1.633, respectively. Management raised full-year guidance on revenue growth and adjusted EBITDA, citing sustained Wizards momentum and improved Consumer Products outlook . Revenue and EPS consensus values marked with (*) are from S&P Global.
  • Wizards of the Coast and Digital Gaming led performance: segment revenue +42% to $572.0M and operating margin 44%; MAGIC: THE GATHERING revenue +55% to $459.4M. Consumer Products declined 7% on retailer order timing and tariff costs; Entertainment revenue +8% with high-margin, asset-light model .
  • Full-year guidance raised to high-single-digit revenue growth (constant currency) and adjusted EBITDA $1.24–$1.26B, with adjusted operating margin 22–23%. On the call, management guided Wizards revenue growth of 36–38% and ~44% margin; Consumer Products revenue down 5–8% with 4–6% margin. The Board declared a $0.70 dividend payable Dec 3, 2025 .
  • Near-term stock narrative: continued record MAGIC performance, raised FY outlook, and tariff mitigation/supply-chain diversification are positive catalysts; tariff costs and CP mix remain watch items .

What Went Well and What Went Wrong

What Went Well

  • Wizards momentum: “MAGIC: THE GATHERING continues to break records” and drove 55% revenue growth on Edge of Eternities and Marvel’s Spider-Man sets, with strong Secret Lair/backlist demand .
  • Margin resilience and guidance raise: “We managed tariff volatility with agility, protected margins through cost productivity and pricing discipline… we are raising our full year guidance” .
  • POS acceleration and share gains entering holiday; CP highlights include Peppa Pig, GI Joe, Marvel and Beyblade strength with later shelf resets normalizing .

What Went Wrong

  • Consumer Products margins compressed: CP operating profit down 32% YoY and adjusted margin fell to 11.2% on tariff expense and unfavorable mix .
  • Tariff headwinds: Q3 tariff cost ~$20M; 2025 net impact expected at ~$60M; management assumes China 30% and Vietnam 20% tariff rates while executing mitigation playbook .
  • Higher royalties in Wizards: back-half royalty expense tied to third-party IP expected at ~$50–60M; royalty expense up ~$80M YoY, tempering margin expansion despite revenue overdelivery .

Financial Results

Consolidated performance by period (oldest → newest)

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Billions)$1.2813 $0.8871 $0.9808 $1.3875
GAAP Diluted EPS ($)$1.59 $0.70 -$6.10 $1.64
Adjusted Diluted EPS ($)$1.74 $1.04 $1.30 $1.68
GAAP Operating Profit ($USD Millions)$301.9 $170.7 -$798.2 $341.1
GAAP Operating Margin (%)23.6% 19.2% -81.4% 24.6%
Adjusted Operating Profit ($USD Millions)$328.7 $222.4 $247.1 $355.6
Adjusted Operating Margin (%)25.7% 25.1% 25.2% 25.6%
EBITDA ($USD Millions)$378.0 $212.4 -$742.0 $386.8
Adjusted EBITDA ($USD Millions)$406.4 $274.3 $302.0 $412.9

Q3 2025 vs estimates and prior periods

MetricQ3 2024Q2 2025Q3 2025 ActualQ3 2025 Consensus*Delta vs ConsensusYoY Change
Revenue ($USD Billions)$1.2813 $0.9808 $1.3875 $1.3475*+$0.0400B (Beat)+$0.1062B (+8%)
Adjusted Diluted EPS ($)$1.74 $1.30 $1.68 $1.633*+$0.047 (Beat)-$0.06 (-3%)

Values marked with (*) are from S&P Global.

Segment breakdown (Q3 2025 vs Q3 2024)

SegmentQ3 2024 Revenue ($M)Q3 2025 Revenue ($M)YoYQ3 2024 Op Profit ($M)Q3 2025 Op Profit ($M)Margin Q3 2024Margin Q3 2025
Wizards of the Coast & Digital404.0 572.0 +42%181.2 251.5 44.9% 44.0%
Consumer Products860.1 796.9 -7%121.0 80.1 14.1% 10.1%
Entertainment17.2 18.6 +8%9.8 7.5 57.0% 40.3%

KPIs and mix

KPI / MixQ3 2024Q3 2025YoY
MAGIC: THE GATHERING Revenue ($M)296.3 459.4 +55%
Hasbro Total Gaming Revenue ($M)593.2 754.5 +27%
Wizards – Tabletop ($M)296.8 441.8 +49%
Wizards – Digital & Licensed ($M)107.2 130.2 +21%
CP North America ($M)526.8 483.0 -8%
CP Europe ($M)162.3 181.1 +12%
CP Asia Pacific ($M)81.9 61.2 -25%
CP Latin America ($M)89.1 71.6 -20%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total revenue growth (constant currency)FY 2025Up mid-single digits High-single digits Raised
Adjusted operating marginFY 202522–23% 22–23% Maintained
Adjusted EBITDA ($B)FY 2025$1.17–$1.20 $1.24–$1.26 Raised
Wizards revenue growthFY 2025N/A36–38% New
Wizards operating marginFY 2025N/A~44% New
Consumer Products revenueFY 2025N/ADown 5–8% New
Consumer Products marginFY 2025N/A4–6% New
Leverage targetFY 2025N/A~2.5x by YE 2025 New
Dividend per shareQuarterly$0.70 (Sep 3, 2025 payment) $0.70 (Dec 3, 2025 payment) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025, Q2 2025)Current Period (Q3 2025)Trend
Tariffs & supply chainQ1: “Tariffs had no material impact” due to timing ; Q2: $1.0B non-cash goodwill impairment in CP tied to tariffs Expect ~$60M 2025 P&L impact; ~$20M Q3 cost; diversification to ~30% China and ~30% U.S. sourcing by 2026 Headwind peaked; mitigation progressing
MAGIC: THE GATHERINGQ1: +45% revenue; strong tabletop and ARENA ; Q2: record Final Fantasy set; +23% MAGIC +55% MAGIC revenue; sustained momentum across sets and backlist; Universes Beyond expansion Accelerating growth
Licensing & DigitalMonopoly Go! $39M (Q1) ; $44M (Q2) YTD Monopoly Go! $126M; digital licensing outperforming Growing contribution
Consumer ProductsCP -4% (Q1) ; -16% (Q2) -7% (Q3) with POS acceleration and later shelf resets normalizing Sequential improvement
Guidance & outlookQ2 raised revenue and EBITDA guidance FY revenue and adjusted EBITDA raised again; segment outlooks added Improving trajectory
EntertainmentQ1: -5% rev; adj OP $17M ; Q2: -15% rev +8% rev; adj margin ~61%; deal timing noted Lumpy, high-margin asset-light
Technology/ExodusN/A in Q1; Q2 focus on digital initiatives Exodus accounting framework: ~$350M capitalized software; ~65% depreciation hit in launch quarter; not added back to EBITDA Execution clarity improving
Regional CP trendsQ1: NA -3%, EU -3%, APAC +10%, LATAM -25% Q2: NA -23%, EU +4%, APAC +2%, LATAM -26% Q3: NA -8%, EU +12%, APAC -25%, LATAM -20%

Management Commentary

  • CEO: “Wizards of the Coast led the way as MAGIC: THE GATHERING continues to break records… Consumer Products POS and market share accelerated ahead of the holiday… we’re poised to enter 2026 with momentum” .
  • CFO/COO: “We managed tariff volatility with agility, protected margins through cost productivity and pricing discipline… we are raising our full year guidance” .
  • CFO on tariffs and supply chain: “Maintaining our assumption that the China tariff rate stays at 30% and Vietnam at 20%, we continue to expect $60 million of impact in our 2025 P&L… by 2026, we expect ~30% of total toy and game revenue sourced from China and ~30% based in the U.S.” .
  • CFO on Exodus: “Capitalized software ~$350M… ~65% of development cost hits in the launch quarter… flows through cost of goods and is not added back to EBITDA” .

Q&A Highlights

  • Segment puts/takes for Q4: Wizards raise driven by revenue; royalty expense level similar Q3 → Q4; CP shipments to outpace POS as later shelf resets catch up; modest CP top-line growth possible .
  • Tariff impact: ~$20M cost in Q3; ~$60M net impact in 2025; 2026 tariff cost larger (full-year), net impact mitigated via pricing, mix, sourcing, OpEx control .
  • Royalty expenses: Back-half royalty expense ~$50–60M tied to Universes Beyond; total royalty expense change ~$80M YoY .
  • Pricing/promo strategy: Focus on price points under $15–$20; limited elasticity seen; retailers leaning in on incremental promotions (Amazon, Walmart, Target) .
  • Inventory and orders: U.S. retail inventories down mid-to-high teens entering Q4; replenishment accelerating; expected to cut deficit roughly in half by year end .
  • Capital allocation: Priorities unchanged—invest in growth engines, maintain dividend, continue debt reduction; leverage target ~2.5x by year end .

Estimates Context

PeriodRevenue Consensus* ($B)Revenue Actual ($B)EPS Consensus* ($)Adjusted EPS Actual ($)# EPS Estimates*# Revenue Estimates*
Q1 20250.7706*0.8871 0.6740*1.04 12*10*
Q2 20250.8823*0.9808 0.7712*1.30 12*10*
Q3 20251.3475*1.3875 1.6332*1.68 12*10*
Q4 20251.2612*N/A0.9412*N/A12*11*
FY 20254.5206*N/A4.9649*N/A14*12*

Values marked with (*) are from S&P Global.

Consensus target price: $91.54 based on 13 estimates* across periods [GetEstimates].

Where estimates may need to adjust:

  • Wizards outperformance and raised FY revenue/EBITDA guidance point to upward revisions on FY top line and EBITDA, and possibly Q4 revenue/EPS if holiday sets and CP replenishment trends persist .
  • CP margin guidance (4–6%) and tariff costs temper full-scale upward margin revisions; expect models to reflect higher royalties and tariff-related mix effects .

Key Takeaways for Investors

  • Q3 was a clean beat on revenue and EPS, driven by record MAGIC and strong Wizards mix; FY guidance raised—supportive for near-term sentiment .
  • Watch royalty and tariff costs: back-half royalties ~$50–60M and 2025 tariff impact ~$60M; margin resilience depends on mix, pricing, and supply-chain diversification execution .
  • CP trajectory improving sequentially with POS acceleration and later shelf resets; Q4 shipments expected to outpace POS and reduce inventory deficits—near-term topline support .
  • Asset-light Entertainment is lumpy but structurally high-margin; not a primary earnings driver, but supports brand flywheel into 2026 .
  • 2026 setup: Universes Beyond pipeline (TMNT, Marvel Superheroes, The Hobbit, Star Trek) plus Exodus launch provide multiyear growth vectors; note Exodus accounting impacts gross margin and EBITDA add-back dynamics .
  • Balance sheet/lifecycle capital: leverage ~2.5x by YE; dividend sustained; continued debt reduction—de-risking equity story .
  • Actionable: bias models to raised FY revenue/EBITDA, hold CP margin assumptions within guided bands, incorporate sustained Wizards margin ~44% and higher royalties; monitor December Game Awards announcements and Q4 set performance for upside catalysts .

Additional Relevant Press Releases (Q3 Timing)

  • Peppa Pig collaboration (Little Tikes) expanding preschool presence ahead of holiday—supports CP brand momentum .

Notes on Non-GAAP Adjustments

  • Adjusted metrics exclude acquired intangible amortization, strategic transformation initiatives, restructuring and severance, loss on disposal of business, eOne divestiture costs, and the Q2 non-cash goodwill impairment; reconciliations provided in the release .