Hasbro (HAS) Stock: The Gathering Powers Earnings Beat and Raised Forecasts

TLDR

• Hasbro reported Q3 earnings of $1.68 per share, beating estimates of $1.63, with revenue up 8% to $1.39 billion versus the $1.35 billion forecast.
• Magic: The Gathering drove a 42% revenue increase in the Wizards of the Coast division, with the card game itself posting a 55% sales surge from new releases and existing products.
• The Consumer Products segment dropped 7% due to delayed retailer orders tied to later holiday shelf resets, though the company sees momentum building for the holiday season.
• Operating profit grew 13% to $341 million, with Wizards of the Coast achieving a 44% operating margin that demonstrates the high profitability of the gaming business.
• Hasbro raised its full-year outlook to expect high-single-digit revenue growth and an adjusted operating margin of 22%-23%, up from previous mid-single-digit growth expectations.

Hasbro posted third-quarter earnings that sailed past Wall Street expectations on Thursday. The company reported adjusted earnings of $1.68 per share.

Analysts had expected $1.63 per share. Revenue climbed 8% to reach $1.39 billion, topping the consensus forecast of $1.35 billion.

The star of the show was Magic: The Gathering. The trading card game continues to break records for the company.

Hasbro, Inc., HAS

Sales of Magic: The Gathering jumped 55% in the quarter. New releases including “Edge of Eternities” and “Marvel’s Spider-Man” drove the growth.

Existing Magic products also performed well during the period. The game’s performance lifted the entire Wizards of the Coast and Digital Gaming segment.

That division saw revenue surge 42% compared to the same quarter last year. A year ago, the segment had posted a 5% decrease.

Traditional Toys See Softness

The Consumer Products segment told a different story. Revenue in that division fell 7% during the quarter.

Hasbro attributed the decline to timing issues with U.S. retailer orders. Later holiday shelf resets pushed some orders into future periods.

The company noted it sees momentum building across many brands. That momentum should help as the holiday season approaches.

Operating profit rose 13% to $341 million. The record Magic performance and cost discipline drove the increase.

Wizards of the Coast achieved a 44% operating margin. That number shows just how profitable the gaming business has become for Hasbro.

CFO and COO Gina Goetter highlighted the company’s operational execution. “We managed tariff volatility with agility, protected margins through cost productivity and pricing discipline,” she said.

Raised Guidance and Shareholder Returns

Based on the strong performance, Hasbro raised its full-year outlook. The company now expects high-single-digit revenue growth in constant currency.

That’s up from previous expectations of mid-single-digit growth. The adjusted operating margin is now expected to land between 22% and 23%.

Hasbro also raised its adjusted EBITDA forecast. The new range of $1.24 billion to $1.26 billion compares to the previous $1.17 billion to $1.20 billion range.

The company maintained its quarterly dividend at $0.70 per share. Hasbro returned $98 million to shareholders during the quarter.

Shares climbed about 3% in premarket trading following the earnings release. The quarterly revenue of $1.39 billion beat the average analyst estimate of $1.34 billion compiled by LSEG.

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