July 21 (Reuters) – Hasbro raised its annual revenue and profit forecasts on Tuesday, betting on resilient demand for its digital gaming business and continued strength in “Magic: The Gathering” despite an uncertain consumer spending environment.
Shares of the company rose 2% in premarket trading after it beat second-quarter sales and profit estimates. Its flagship “Magic” franchise fueled a 27% rise in revenue at its Wizards of the Coast and Digital Gaming unit, compared with 16% growth a year earlier.
Stronger spending by higher-income consumers helped Hasbro offset weak demand from lower-income households facing persistent inflation.
“With strong indications for our remaining releases and line of sight to continued growth in 2027, the Magic flywheel is firing on all cylinders,” CEO Chris Cocks said.
Hasbro launched the “Secrets of Strixhaven” series in April and its “Marvel Super Heroes” title last month, and expects to release its Star Trek-themed set in November.
“The second half of the year is a little bit of a wild card,” James Zahn, editor-in-chief of Toy Book magazine, said, adding that Magic’s release schedule is heavier than last year’s.
The Play-Doh maker now expects annual revenue to grow in the range of 5% to 7%, compared with its prior forecast of 3% to 5%. Analysts expected growth of 6.3%, according to data compiled by LSEG.
D.A. Davidson and Roth MKM analysts, however, said the updated forecast was conservative, as management incorporated only part of its first-half earnings outperformance into its full-year outlook, leaving room for future upside.
It sees annual adjusted core profit between $1.45 billion and $1.50 billion, compared with the previous outlook range of $1.40 billion to $1.45 billion.
Second-quarter revenue rose 16% to $1.14 billion, topping analysts’ estimates of $1.07 billion.
The company’s quarterly adjusted profit fell 1.5% to $1.28 per share. Analysts had estimated a profit of $1.14 per share.
Hasbro said it incurred $11 million in incremental expenses in the quarter from a cybersecurity incident that occurred in March, and expects additional related costs in the future.
(Reporting by Neil J Kanatt in Bengaluru; Editing by Leroy Leo)
