By Neil J Kanatt and Prerna Bedi (Reuters) -Hasbro raised its annual revenue and core profit forecasts on Thursday banking on strong demand for its digital games, including “Magic: The Gathering”, at a time when tariff uncertainty looms over the all-important holiday season. The toy industry, which relies heavily on its manufacturing hubs in regions […]
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Hasbro lifts annual forecasts on ‘Magic: The Gathering’ demand boost
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By Neil J Kanatt and Prerna Bedi
(Reuters) -Hasbro raised its annual revenue and core profit forecasts on Thursday banking on strong demand for its digital games, including “Magic: The Gathering”, at a time when tariff uncertainty looms over the all-important holiday season.
The toy industry, which relies heavily on its manufacturing hubs in regions including China, risks a significant hit from the tariffs, with a recent threat of a 100% duty on Chinese imports further clouding the outlook.
Hasbro said it plans to bring down its reliance on imports from China to 30% of its revenue by 2026, compared to its previous expectation of cutting it to 40% by 2027.
The company had also rolled out job cuts and a $1 billion cost-savings program earlier this year to cushion any likely hit.
“We’re executing our tariff remediation playbook decisively, mitigating risk and protecting profitability,” finance chief Gina Goetter said in a post-earnings call.
Peer Mattel maintained its annual outlook after missing third-quarter revenue and profit on Tuesday, as retailers delayed orders due to an uncertain economic outlook.
“Even with retailers taking a cautious approach to restocking, Hasbro’s core brands — from Magic: The Gathering to Monopoly Go — are doing the heavy lifting,” eMarketer analyst Zak Stambor said.
The company also said it expects momentum for its brands to remain strong in the current quarter, which falls in the crucial holiday sales period.
Hasbro expects annual revenue to increase by high single digits, compared with prior expectations of a mid-single-digit rise.
Shares of the toymaker, which have climbed more than 34% so far this year, were flat in early trading.
It also expects adjusted earnings before interest, taxes, depreciation, and amortization to be between $1.24 billion and $1.26 billion, compared with its previous $1.17 billion to $1.20 billion forecast.
Revenue for the third quarter rose 8% to $1.39 billion, beating analysts’ average estimate of $1.34 billion, according to data compiled by LSEG.
Wizards of the Coast and Digital Gaming segment revenue jumped 42%, compared to a 5% decrease a year earlier.
Adjusted profit per share of $1.68 also topped estimates of $1.63.
(Reporting by Neil J Kanatt and Prerna Bedi in Bengaluru; Editing by Pooja Desai and Sriraj Kalluvila)