Hasbro Stock Falls After Earnings Beat. Tariffs Are Hitting the Toy Business.

“Magic: The Gathering” revenue increased 23%, but tariffs weighed on toy sales. (Photograph by Keith Morris / Alamy Stock Photo)

Shares of Hasbro fell Wednesday after the toy and game maker even beat earnings expectations and raised its guidance for the remainder of 2025. While strong “Magic: The Gathering” sales are spurring growth, tariff headwinds remain.

The company posted second-quarter adjusted earnings of $1.30 a share, well above Wall Street’s consensus estimate of 78 cents, according to FactSet. Revenue came in at $980.8 million, compared to analysts’ forecasts of $880.4 million.

Hasbro stock was down 1.1% in afternoon trading Wednesday, having soared before stock markets opened.

The company raised forecasts for 2025. It now expects adjusted earnings before interest, taxes, depreciation, and amortization of between $1.17 billion and $1.2 billion this year, up from previous guidance of $1.1 billion to $1.15 billion. Revenue is expected to rise mid-single digits from last year, whereas past forecasts had called for only slight growth.

Hasbro’s “Wizards of the Coast” roleplaying and trading-card segment—headlined by “Magic: The Gathering”—fueled the upward revision, the company said. “Magic” revenue grew 23% to $412 million in the second quarter from $336 million the year prior, helping to offset a decline in toy sales.

But tariffs on toys may still be weighing on investors’ minds. Hasbro recorded a $1 billion non-cash goodwill impairment charge in its consumer product segment in the second quarter due to tariffs’ impact on the company’s long-term outlook. Management expects to take a $60 million hit from tariffs this year, but sees that number growing in 2026 and 2027, chief financial officer Gina Goetter said on a conference call.

Hasbro now expects consumer products revenue, which includes toys, to decline 5% to 8% this year compared to 2024, in part due to tariffs and shifting order patterns from retailers. At the beginning of the year, the company said revenue in the category would be flat to down 4%.

Write to Nate Wolf at nate.wolf@barrons.com