Hasbro’s Magic: The Gathering growth helps offset toy revenue drop

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Dive Brief:

• As it undergoes a turnaround effort, Hasbro’s second quarter revenue dropped 1% year over year to $980.8 million, according to a company press release Wednesday. The company’s 16% growth in its Wizards and digital gaming segment (which includes Magic: The Gathering) helped to nearly offset a 16% revenue drop in its consumer products category, which saw softness in toys due to “order timing and geographic volatility,” per the release.
• Hasbro reported a net loss of about $854.7 million for the quarter compared to a net income of $138.5 million the year before. The company also recorded a $798 million operating loss inclusive of a $1 billion noncash goodwill impairment charge.
• The toy company raised its full-year guidance, now anticipating a revenue increase in the mid-single digits on a constant currency basis (compared to previous predictions that it would be “up slightly”) and an adjusted operating margin of 22% to 23% (compared to the previous 21% to 22% prediction).

Dive Insight:

Hasbro’s Magic: The Gathering performance helped fuel the company’s Q2 performance despite a tough environment for toys.

“Hasbro’s return to growth in the first half of 2025 is clear validation that our Playing to Win strategy is working,” Chief Executive Officer Chris Cocks said in a statement. “We delivered record-setting results from Magic: The Gathering, alongside strong contributions from our games portfolio, licensing partnerships, and digital initiatives.”

Magic: The Gathering experienced 23% growth driven by a tabletop card game release for Final Fantasy, which debuted in June. Cocks told analysts on a Wednesday call that Hasbro had to increase production runs four times since its launch and the company even “left demand on the table.”

The executive also said that 2025 is the year Hasbro will return to growth.

Tariffs remained a discussion point on the call for Hasbro, which in April had not changed its full-year guidance due to the volatile trade environment.

Hasbro’s inventory is up 17% year over year, according to a Q2 results presentation from the company, with production and shipments having restarted from China in May.

Since then, potential tariffs on imports from China have dropped to an additional 30%, which is more “favorable” for Hasbro though such rates remain fluid, CFO and COO Gina Goetter told analysts on the call.

Story Continues“Based on our conversations with investors, expectations were high heading into the Q2 print, but [Hasbro] reported strong Q2 results,” analysts led by Jefferies said in a note shared with Retail Dive.

The improved company outlook is on the back of a turnaround plan announced in February, which includes a focus on creating mid-single-digit revenue growth between 2025 and 2027, as well as adding $1 billion in gross cost savings.

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