No toying around in the market for Hasbro (HAS) shares on Thursday.
Shares of the toymaker exploded 11% after the company smashed through fourth quarter profit estimates and offered upbeat longer-term guidance.
The Street gave Hasbro high marks for aggressive cost-cutting, which has more room to go — CEO Chris Cocks told me on Yahoo Finance the company aims to slash $1 billion in costs by 2027. Its previous goal was $750 million.
Cocks said the toy industry has bottomed out after a few challenging years.
“The toy category has been down, kind of like low single-digit percentage [drop] per year for the last three years. We see that starting to flatten out and basically being flat for the next two to three years. We think Hasbro will benefit — we’ve got a great innovation portfolio coming out.”
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Net sales: -14.5% year over year to $1.1 billion vs. estimates for $1.02 billion
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Adjusted operating profits: +1,390% year over year to $164.8 million vs. estimates for $149.3 million
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Adjusted EPS: +21% year over year to $0.46 vs. estimates for $0.34
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Total revenue up slightly year over year
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Adjusted operating margin of 21% to 22%, versus 20.3% last year
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Net sales: Mid-single-digit percentage annual revenue growth
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Adjusted operating margins: 50 basis points to 100 basis points annual improvement
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Other: $1 billion in cost savings, up from prior guidance of $750 million
Toy stocks have done surprisingly well in 2025 despite tariff news swirling. Shares of Mattel (MAT) and Hasbro are up 22% and 18%, respectively, year to date. But tariff headwinds are likely coming for each toy giant’s financials and stock price.
President Trump has pledged to implement reciprocal tariffs pending an April 1 report from Commerce Secretary Howard Lutnick. The premise is that the US would raise its tariffs on foreign items to match what other countries slap on US products.
The administration has already put an additional 10% tariff on Chinese imports, while a 25% tariff on Canada and Mexico is on hold.
That could materially impact consumer companies as a sizable portion of their merchandise is sourced from China due to its low production cost. But tariffs could also stunt demand as consumers balk at price hikes.
Trump’s tariffs could reduce American consumers’ spending power by $46 billion to $78 billion every year they are in place, estimates the National Retail Federation (NRF).
Nearly 80% of US toys are manufactured in China, according to industry trade group the Toy Association.