Hasbro's strong Q2 leads to upbeat FY25 outlook

Led by strong sales in its Wizards of the Coast and Digital Gaming units, Hasbro (NASDAQ:HAS) beat top- and bottom-line expectations for the second quarter and raised its full year revenue and profit guidance for FY25, driving shares higher in Wednesday’s premarket trading.

“Despite a dynamic macro environment, the strength of our diversified business and cost productivity initiatives support our updated outlook,” Hasbro CFO and COO Gina Goetter said.

Hasbro’s (NASDAQ:HAS) Playing to Win strategy is credited with the company’s return to growth in the first half of the year with record-setting results from MAGIC: THE GATHERING coupled with cost initiatives and licensing partnerships driving an adjusted profit of $1.30 per share, up from $1.22 a year ago and $0.53 better than expected.

And although the company reported a 16% increase in sales in its Wizards and Digital Gaming divisions, it could not completely compensate for a 16% decline in its consumer products segment and 15% drop in Entertainment sales, resulting in an overall decline of 1% in total revenue to $980.8M, albeit still above consensus estimate by $98.6M.

Higher than expected royalty expenses drove the company’s operating profit down 2% and operating margin down 840 basis points to 46.3%.

For the full year 2025, Hasbro (NASDAQ:HAS) now expects revenue growth of mid-single digits versus prior guidance of "up slightly.” Adjusted operating margin is expected to be between 22% to 23% versus prior outlook of 21% to 22%, and adjusted EBITDA of $1.17B to $1.20B, up from prior guidance of $1.1B to $1.15B.

The upbeat results and outlook for consumer demand is setting up Hasbro (HAS) to open with a new 52-week high and driving up shares of Mattel (MAT) in tandem.