Increased Q1 revenue by 17% for Hasbro
Hasbro, the renowned toy and game manufacturer, has announced its first-quarter results, revealing a 17% increase in revenue compared to the same period last year, reaching approximately $887 million.
The growth was primarily driven by a 46% increase in the Wizards of the Coast and Digital Gaming segment, which includes popular franchises such as Magic: The Gathering and Dungeons & Dragons.
However, the company's CEO, Chris Cocks, highlighted that targeted pricing actions remain likely due to the ongoing challenges posed by the Trump administration's 145% tariffs on toy imports from China. The survey conducted by The Toy Association suggests that about half of small- and medium-sized enterprises may soon go out of business due to the current U.S. tariff policy.
In an effort to mitigate these pressures, Hasbro's Chief Operating and Financial Officer, Gina Goetter, stated that the company's asset-light model is proving beneficial. This model, which involves outsourcing production and focusing on marketing and distribution, is helping Hasbro to offset some of the tariff-related costs.
Despite the company's positioning and flexibility, Cocks remarked that logistics are becoming more complex. To navigate these challenges, Hasbro is prioritizing key price points and strengthening retail partnerships.
In other developments, Hasbro announced a multiyear extension to its toys and games partnership with Disney Consumer Products for the Star Wars and Marvel brands. The company also revealed a longer collaboration with Microsoft in the areas of toy retail and computer games for these beloved franchises, as part of its new transformation strategy unveiled in February.
The first quarter also saw a 12% decrease in Hasbro's owned inventory year over year. However, the company's consumer products segment revenue decreased by 4%, and the entertainment segment revenue saw a 5% drop.
Hasbro's operating profit for the quarter increased by 46% to around $170 million. Notably, the company's licensing business is primarily digital, as revealed during the earnings call.
In a show of support for The Toy Association's advocacy, Hasbro's CEO expressed his backing for zero tariffs on toys and games globally. Despite the current uncertainty in the trade environment, Hasbro did not change its full-year guidance issued in February.
The company's 2024 fiscal year revenue saw a 17% decline, primarily due to the divestiture of its film and TV business. However, Hasbro's resilience and strategic initiatives suggest a promising outlook for the future.
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