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By Anuja Bharat Mistry
(Reuters) -Hasbro's quarterly results beat Wall Street estimates on Thursday, helped by strength in the company's gaming segment, sending the toymaker's shares up about 12%.
The Play-Doh maker said it would not change its annual forecasts amid the uncertainty related to the Trump administration's tariffs, adding that the levies did not have any material impact on the quarterly results due to the timing as to when they went into effect.
Hasbro, which sources about half of its toys and games sold in the U.S. from China, said it was reassessing logistics routes and manufacturing.
The toymaker was also speeding up efforts to diversify sourcing and "meaningfully" bring down its exposure to China, company executives said on a post-earnings call.
Hasbro's ongoing shift toward its digital and licensed gaming business helped attract younger customers after its toy business has struggled with weak demand for about three years.
The company's revenue rose 17.1% to $887.1 million in the first quarter, compared with the average analyst estimate of $771.2 million, according to data compiled by LSEG.
Revenue from Hasbro's digital gaming segment — which makes online versions of games such as "Magic: The Gathering" — jumped 46%.
Hasbro's turnaround efforts, such as streamlining its supply chain and maintaining leaner inventories, also helped the company to report an adjusted operating margin of 25.1%.
On an adjusted basis, the company earned $1.04 per share, beating estimates of 67 cents.
"Hasbro may be better positioned than most to weather what's ahead. The path forward isn't clear, but the company's recent moves suggest it's not standing still," Emarketer analyst Zak Stambor said.
Increasing worries about a global trade war, triggered by U.S. President Donald Trump's tariffs on trading partners, have piled pressure on the toy industry that is already struggling with weak demand.
"Hasbro holding firm on its 2025 guidance is a great signal of optimism that the global trade concerns will find a resolution soon," James Zahn, editor in chief at the Toy Book magazine, said.
(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Shounak Dasgupta)