Hasbro Soars 11% After Smashing Earnings, Raises Guidance

Key Metrics:

* Net Sales: $1.1 billion, down 14.5% YoY but exceeding estimates of $1.02 billion
* Adjusted Operating Profit: $164.8 million, up 1,390% YoY and above estimates of $149.3 million
* Adjusted EPS: $0.46, up 21% YoY and surpassing estimates of $0.34

Q4 Highlights:

* Aggressive cost-cutting initiatives, with plans to slash $1 billion by 2027
* Toy industry bottoming out after challenging years
* Robust innovation portfolio expected to drive future growth

2025 Outlook:

* Slight increase in total revenue
* Adjusted operating margin target of 21% to 22% (up from 20.3% in 2024)
* Net sales growth in the mid-single-digit percentage range
* Annual improvement in adjusted operating margins by 50 to 100 basis points

Earnings Analysis:

Despite tariff uncertainties, toy stocks have performed well in 2025. Hasbro and Mattel have gained 18% and 22%, respectively. However, potential reciprocal tariffs could impact the financial performance of toy giants.

Tariff Impact:

* President Trump has pledged to implement tariffs based on a Commerce Secretary report
* Nearly 80% of US toys are manufactured in China, potentially impacted by tariffs
* Hasbro is prepared to raise prices to offset tariff pressures
* Limited capacity to bring toy manufacturing back to the US due to automation challenges

Executive Commentary:

Hasbro CEO Chris Cocks anticipates targeting price adjustments to mitigate tariff impacts. He emphasizes the company's focus on delivering value through products priced below $10 and $20.