Despite surpassing quarterly earnings expectations, Hasbro (HAS, Financial), a global toy giant, issued a significant warning during its earnings call. The company stated that if the current tariffs imposed by the Trump administration persist, its profits could face a $300 million hit by 2025. This potential loss equates to 78% of its projected net income for 2024, estimated at $385 million.
Gina Goetter, Hasbro's CFO, revealed that the company has modeled three tariff scenarios: 50%, 145%, and a global 10% rate. Without mitigation strategies, the total gross profit loss in 2025 could range from $100 million to $300 million. China, as a major toy manufacturing hub, constitutes over 60% of Hasbro's supply chain.
CEO Chris Cocks highlighted the company's three protective strategies: the resilience of its gaming business, the isolation of its digital operations, and supply chain flexibility. Games like "Magic: The Gathering" and "Dungeons & Dragons" are primarily produced in the U.S. and Japan, minimizing tariff exposure to under $10 million. The digital and IP licensing businesses remain unaffected by physical tariffs, and the company has initiated capacity replacement strategies in Southeast Asia.
