Magic: The Gathering's growth aids Hasbro in compensating for toy revenue decline
In a significant turnaround, Hasbro, the American multinational toy and board game company, has reported impressive results for its Q2 2025, largely thanks to the success of Magic: The Gathering (MTG). The company's earnings per share of $1.30 surpassed the expected $0.78 and the prior year's $1.22, a testament to the strategic pivot towards digital gaming and Wizards of the Coast products.
The Magic: The Gathering segment experienced a staggering 23% growth, driven by the release of the Final Fantasy set in June. This surge in revenue was substantial enough to offset declines in Hasbro's traditional toy sales and the Consumer Products segment, which saw a 16% drop due to order timing and geographic volatility.
The Wizards of the Coast & Digital Gaming segment, which also includes Monopoly Go! and other titles, saw a 16% revenue growth to $522 million, boasting a strong operating margin of 46.3%. This highlights the profitability of this division within Hasbro.
Despite the consumer products and entertainment segments facing declines (16% and 15%, respectively), the success of MTG and digital gaming enabled Hasbro to raise its full-year revenue forecast and project sustained growth for 2025 and beyond. The company anticipates a revenue increase in the mid-single digits on a constant currency basis and an adjusted operating margin of 22% to 23% for the full year.
Production and shipments resumed from China in May for Hasbro, and the executive stated that 2025 is the year Hasbro will return to growth. The company's inventory is up 17% year over year, and the plan also includes adding $1 billion in gross cost savings.
However, it's important to note that Hasbro recorded a $798 million operating loss, inclusive of a $1 billion noncash goodwill impairment charge. Despite this, analysts led by Jefferies have expressed positive expectations heading into the Q2 print for Hasbro.
In summary, Magic: The Gathering's robust Q2 2025 growth was a key factor in Hasbro beating earnings expectations and improving its annual outlook, underscoring the strategic pivot towards digital gaming and Wizards of the Coast products as core drivers of the company’s future growth.
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