TLDR
- Hasbro beat Q3 earnings with $1.68 per share versus $1.63 expected and revenue of $1.39 billion beating the $1.35 billion forecast.
- Magic: The Gathering sales jumped 55% driving a 42% revenue increase in the Wizards of the Coast division with new releases performing well.
- Consumer Products revenue fell 7% due to retailer order timing but the company sees building momentum heading into the holiday season.
- Operating profit increased 13% to $341 million with Wizards of the Coast achieving a 44% operating margin.
- Full-year guidance raised to high-single-digit revenue growth and 22%-23% adjusted operating margin from previous mid-single-digit expectations.
Hasbro delivered third-quarter results that exceeded Wall Street forecasts on Thursday. The toy and gaming company posted adjusted earnings of $1.68 per share.
That beat analyst expectations of $1.63 per share. Revenue grew 8% year-over-year to $1.39 billion, surpassing the $1.35 billion consensus estimate.
The earnings beat came largely from one franchise. Magic: The Gathering posted a 55% sales increase during the quarter.
New product releases drove the growth. “Edge of Eternities” and “Marvel’s Spider-Man” expansions attracted players and collectors.
Existing Magic products also contributed to the strong performance. The franchise continues setting new records for the company.
Gaming Division Leads Growth
The Wizards of the Coast and Digital Gaming segment saw revenue surge 42%. This compared to a 5% decline in the same quarter last year.
The division achieved a 44% operating margin. That demonstrates the profitability of Hasbro’s gaming operations.
CEO Chris Cocks highlighted the results. “Hasbro delivered another quarter of growth, highlighting the strength of our brands and Playing to Win strategy,” he stated.
The gaming division now serves as a counterbalance. It offsets challenges in other parts of the business.
Consumer Products revenue dropped 7% in the quarter. The decline stemmed from U.S. retailer order timing related to later holiday shelf resets.
Hasbro expects this softness was temporary. The company noted momentum building across brands for the holiday season.
Raised Outlook and Financial Performance
Operating profit climbed 13% to reach $341 million. Record Magic performance and cost management drove the increase.
CFO Gina Goetter addressed operational execution. “We managed tariff volatility with agility, protected margins through cost productivity and pricing discipline,” she said.
Hasbro raised its full-year revenue outlook. The company now projects high-single-digit growth in constant currency.
Previous guidance called for mid-single-digit growth. The adjusted operating margin forecast now stands at 22%-23%.
The adjusted EBITDA forecast also increased. Hasbro expects $1.24 billion to $1.26 billion, up from $1.17 billion to $1.20 billion previously.
The company maintained its quarterly dividend. Shareholders received $0.70 per share, with $98 million returned during the quarter.
Shares rose approximately 3% in premarket trading. The $1.39 billion quarterly revenue beat the $1.34 billion average analyst estimate compiled by LSEG.
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