Hasbro Posts 16 Percent Q2 Gaming Jump

Key Points

• - Non-GAAP earnings per share reached $1.30 in Q2 2025, significantly above the $0.78 analyst estimate (non-GAAP); GAAP revenue exceeded forecasts by $100.4 million.

• - Wizards & Digital Gaming revenue rose 16%, with MAGIC: THE GATHERING setting a new record, while traditional Consumer Products revenue fell 16% year-over-year.

• - Hasbro recorded a $1.02 billion non-cash goodwill impairment in its Consumer Products segment due to tariffs.

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Hasbro (NASDAQ:HAS), the company behind well-known toys and games like MAGIC: THE GATHERING card games and MONOPOLY board games, released its second quarter 2025 earnings on July 23, 2025. The standout news was strong outperformance in non-GAAP earnings per share and GAAP revenue, driven by record sales in Wizards & Digital Gaming, particularly MAGIC: THE GATHERING, while traditional toys and Consumer Products faced a 16% decline in revenue. Adjusted non-GAAP earnings per share reached $1.30, beating the $0.78 analyst consensus (Non-GAAP) by 66.7%. GAAP revenue was $980.8 million, exceeding analyst estimates by $100.4 million and down 1% from the prior year due to growth in gaming. The quarter demonstrated Hasbro's continued focus on digital transformation and operational discipline, but also included a substantial $1.0 billion non-cash goodwill impairment in the Consumer Products segment, reflecting ongoing structural challenges in traditional toys.

Source: Analyst estimates for the quarter provided by FactSet.

Understanding Hasbro's Business and Key Focus Areas

Hasbro produces toys, games, and entertainment products that span iconic brands such as MAGIC: THE GATHERING collectible card games, DUNGEONS & DRAGONS roleplaying games, and MONOPOLY board games. Its business is structured around three main reporting segments: Wizards & Digital Gaming, Consumer Products, and Entertainment.

The company's recent focus centers on leveraging its strongest intellectual properties, growing its digital and direct-to-consumer businesses, and pursuing operational excellence to manage costs. These strategies have become increasingly important as Hasbro shifts toward gaming and licensing as core profit drivers amid volatility in traditional toys. Franchises like MAGIC: THE GATHERING and Monopoly Go! digital games play a bigger role in driving performance, while innovation and cost management aim to protect profitability across segments.

The Quarter in Review: Performance and Changes

Wizards & Digital Gaming continued to be Hasbro's standout growth engine. Segment revenue rose 16% from the prior year, supported by a 23% increase in MAGIC: THE GATHERING sales to $412 million. The recent Final Fantasy Universes Beyond set release was singled out as the largest in the card game’s history. Tabletop gaming revenue was up 32% to $406.3 million, offsetting a 20% decline in digital/licensed gaming, which was cycling past prior-year settlements and licensing gains. Monopoly Go, a digital board game app, contributed $44 million in revenue, reinforcing the growing impact of licensed digital properties. Wizards’ segment operating margin declined from 54.7% to 46.3% due to higher royalty expenses.

The Consumer Products segment reported a 16% GAAP revenue drop to $442.4 million, with adjusted operating profit close to break-even. Hasbro recognized a $1.02 billion non-cash goodwill impairment related to increased tariff exposure. The company pointed to BEYBLADE spinning battle tops, TRANSFORMERS action figures, and MONOPOLY games as brand bright spots, though underlying demand for toys remained soft. Regionally, Consumer Products revenue fell 23% in North America and 26% in Latin America (GAAP), while Europe and Asia Pacific saw modest increases.

Hasbro’s Entertainment division remains a minor contributor following past divestitures, with revenues down 15% in the quarter due to the nature and timing of deals. Segment revenue fell 15% to $16 million, with adjusted operating profit of $10 million compared to $18 million in the second quarter of 2024. Both film/TV content sales and Family Brands revenue declined in the first half of 2025 due to the timing of deals.

The quarter also featured progress on cost-saving programs, with total gross cost reductions since 2022 reaching approximately $600 million. Hasbro reported $320 million in net savings since this program was initiated in 2022 and remains on track with initiatives to mitigate supply chain and tariff risks. The quarter’s results benefited from these savings, helping keep adjusted operating profit stable year-over-year despite headwinds in traditional toys. Hasbro continues to stress the importance of new licensing agreements, noting recent extensions with Disney for MARVEL and STAR WARS brands. Licensing and digital revenues are more resilient against tariffs, providing a buffer for company-wide results.

Looking Ahead: Outlook and Investor Watch Points

Management raised its outlook for total revenue in FY2025, now expecting mid-single digit growth in constant currency, up from earlier guidance of “slight” full-year revenue growth. The company projects an adjusted operating margin in the 22%–23% range for FY2025, and adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $1.17 billion to $1.20 billion. Hasbro’s guidance assumes continued tariff pressures and factors in potential toy category declines similar to those seen during major recessions such as the 2008–2009 period.

Hasbro’s management highlighted ongoing risk factors for the remainder of the year. These include continued retailer volatility, non-cash impairments in traditional toys reflecting deeper structural change, and pressure on segment margins within the high-growth Wizards unit due to rising royalty costs. The company has not changed its plans for Consumer Products for now, leaving this outlook unchanged amid ongoing uncertainty. Supply chain diversification efforts are ongoing, but significant results are not expected to materialize until 2026.

The quarterly dividend was kept steady at $0.70 per share.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool recommends Hasbro. The Motley Fool has a disclosure policy.