Hasbro Raises Guidance as Magic: The Gathering Drives Q2 Beat
Hasbro's second-quarter results and an upgraded annual profit forecast pushed its shares higher, proving to skeptical investors that its trading card franchise can sustain robust growth despite recent cyber-attack disruptions.
Hasbro shares surged more than 10% after the company posted stronger-than-expected second-quarter results and raised its full-year guidance. The stock later pared some gains but remained up over 7% at midday. The rally reflects renewed investor confidence in the company's pivot toward high-margin digital and tabletop gaming.
For the quarter ended June 28, revenue climbed 16% year-over-year to $1.1 billion, while adjusted operating profit rose 14% to $282 million. Adjusted earnings per diluted share came in at $1.28. Buoyed by the performance, Hasbro increased its full-year adjusted EBITDA outlook to a range of $1.45 billion to $1.5 billion, up from a previous estimate of $1.40 billion to $1.45 billion, and lifted operating margin guidance to 25% to 26%.
The primary engine for the quarter was the Wizards and Digital Gaming segment, which saw sales jump 27%. Chief Executive Chris Cocks used much of the earnings call to defend the long-term economics of Magic: The Gathering to skeptical analysts. While the trading card game is “by far our biggest brand, in many ways it’s also the least understood,” Cocks said, pointing to a record-breaking launch of a Marvel Super Heroes crossover set. He argued the game boasts "tens of millions of fans who treat the game as a lifelong pursuit, rather than a passing trend.”
The strong gaming performance was complemented by a 5% increase in the consumer products segment, a sign that traditional toys are stabilizing. James Zahn, Editor-in-Chief of The Toy Book, noted the significance of this breadth. “It’s very good news to see that momentum carry over into toys and consumer products, with brands like Peppa Pig and G.I. Joe proving that traditional toys still matter and that legacy brands still resonate with audiences spanning preschoolers to adult collectors,” he said.
The quarterly results arrived despite a tangible headwind from a cyber attack discovered in March. Hasbro disclosed that the breach delayed $40 million to $60 million in consumer products revenue into the second half of the year and is expected to incur $20 million in additional expenses this year.
Looking ahead, the company is banking on a robust holiday season. New product lines like KPop Demon Hunters role-play toys and Marvel Spider-Man tie-ins are hitting shelves, while Zahn highlighted that Blooms by Play-Doh, an adult-targeted craft set, “is off to a massive start with quick sellouts at retail.” Summarizing the quarterly momentum, Zahn concluded: “Hasbro’s strategy is paying off. We can see that in how they’re leaning into strengths while finding the right partners to play with the brands in their toy box.”
