Hasbro Surges on Earnings Beat, Upbeat Outlook
Key Metrics
* Q4 Net Sales: $1.1 billion (-14.5% YoY) vs. $1.02 billion estimate
* Adjusted Operating Profits: $164.8 million (+1,390% YoY) vs. $149.3 million estimate
* Adjusted EPS: $0.46 (+21% YoY) vs. $0.34 estimate
2025 Outlook
* Total revenue to grow slightly
* Adjusted operating margin of 21-22%, up from 20.3% in 2024
* Mid-single-digit percentage annual revenue growth through 2027
* Adjusted operating margin improvement of 50-100 basis points annually
* $1 billion in cost savings, up from previous guidance of $750 million
Analysis
Hasbro's shares soared 11% on Thursday after reporting strong Q4 earnings and providing an optimistic long-term outlook. The toymaker's aggressive cost-cutting measures, led by CEO Chris Cocks, have significantly boosted profitability.
Cocks predicts the toy industry is nearing the end of a challenging period, with stabilization expected over the next two to three years. Hasbro's robust innovation pipeline is poised to capitalize on this recovery.
Despite optimism, Hasbro faces potential headwinds from tariffs. President Trump's proposed reciprocal tariffs could impact financials and stock performance. Hasbro is prepared to raise prices to offset these pressures but remains focused on providing affordable options.
Currently, nearly 80% of US toys are manufactured in China, making tariffs a significant concern for the industry. However, Hasbro is exploring ways to expand domestic manufacturing, particularly for high-turnover categories.
Peer Performance
Toy stocks have performed well in 2025, with Mattel (MAT) and Hasbro up 22% and 18%, respectively. However, tariff risks remain a potential threat to the sector's performance.
Analyst Commentary
Analysts are positive on Hasbro's long-term prospects, citing its focus on innovation and cost reduction. However, they caution that tariffs could present a significant challenge.