Hasbro Q1 2025 slides: Wizards segment drives 17% revenue growth, margins expand

Quarterly Performance Highlights

Hasbro, Inc. (NASDAQ:HAS) reported strong first-quarter 2025 results, with total revenue increasing 17% to $887 million, driven primarily by exceptional performance in its Wizards of the Coast segment. The company achieved a record high Q1 adjusted operating margin of 25.1%, representing a significant improvement from 19.6% in the same period last year.

As shown in the following financial highlights, Hasbro delivered substantial growth across key metrics, with adjusted operating profit improving by $74 million compared to the prior year:

The company maintained its financial discipline by paying $98 million in dividends during the quarter while also reducing debt by $50 million. Hasbro’s improved business mix contributed to earnings per share growth, with adjusted EPS reaching $1.04, up from the previous year.

Hasbro showcased several successful product launches that contributed to its first-quarter performance, including new releases across its gaming and entertainment franchises:

Segment Analysis

Hasbro’s performance varied significantly across its business segments, with Wizards of the Coast delivering exceptional results while Consumer Products continued to face challenges. The company’s reported results by segment highlight these contrasting performances:

On an adjusted basis, the company’s segment performance showed even stronger margins, particularly in the Wizards of the Coast and Entertainment segments:

The Wizards of the Coast segment was the standout performer, with revenue increasing 46% to $462 million, driven primarily by strong performance in MAGIC: THE GATHERING, licensed and digital gaming, and DUNGEONS & DRAGONS. The segment’s operating margin expanded dramatically to 49.8% from 38.8% in the prior year.

The following chart breaks down the drivers behind Wizards of the Coast’s impressive margin performance:

MAGIC: THE GATHERING continues to be a cornerstone franchise for Hasbro, having crossed $1 billion in annual revenue in 2022. The company reported that total FY 2024 MAGIC revenue was $1.08 billion, representing an impressive 11% CAGR over the past decade. The company also outlined its release schedule for upcoming sets in 2025, including collaborations with major franchises like Final Fantasy, Spider-Man, and Avatar:

Meanwhile, the Consumer Products segment saw revenue decline by 4% to $398 million, though its adjusted operating margin improved to -7.8% from -9.2% in the prior year. The segment’s performance was affected by planned declines in toys and games, partially offset by growth in licensing.

Operational Excellence and Inventory Management

Hasbro continues to make progress on its Operational Excellence Program, which aims to deliver $1 billion in gross cost savings by 2027. The company reported delivering $22 million of gross savings in Q1 2025 and remains committed to achieving its targets:

Inventory management has been another area of focus for Hasbro. The company reported a 12% reduction in owned inventory compared to Q1 2024, though inventory levels increased 8% from Q4 2024. Current inventory represents approximately 93 days of supply, which the company indicated is on plan for the year:

Market Position

Despite some challenges, Hasbro maintains leading positions in several key product categories. The company’s Q1 market share data shows it holds the #1 position in Action (WA:ACT) Figures & Accessories, Arts & Crafts, Games, and Blasters & Accessories, though it has experienced some share declines across these categories:

Forward Guidance

Looking ahead, Hasbro maintained its full-year 2025 guidance, projecting slight revenue growth on a constant currency basis and adjusted operating margin of 21% to 22%, up from 20.3% in FY 2024. The company expects adjusted EBITDA to reach $1.1 billion to $1.15 billion, compared to $1.057 billion in the previous year.

For the medium term (2025-2027), Hasbro is targeting mid-single-digit revenue growth CAGR on a constant currency basis, with average operating margin expansion of 50 to 100 basis points per year. The company also aims to reduce its gross debt to adjusted EBITDA ratio to 2.5x by 2026.

In premarket trading following the release, Hasbro shares were up 5.98% to $55.84, reflecting positive investor reaction to the strong quarterly results and maintained guidance.

Full presentation:

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