Three months ago, a tariff-driven market crash put Hasbro Inc.’s potential relocation plans on ice.
But the Pawtucket-based toymaker now appears back on solid financial ground, buoyed by record sales in its digital gaming business and easing of reciprocal tariffs with China.
“2025 will be the year Hasbro returns to growth, and we will do so backed by record operating margins,” CEO Chris Cocks said in a call with investors Wednesday morning, immediately following the release of Hasbro’s second-quarter earnings.
Cocks did not address a move to Massachusetts during the 75-minute call, nor were relocation plans noted in the company’s financial filings. The company was reportedly looking to abandon its century-old Rhode Island roots in favor of a more modern and transit-friendly alternative in or near Boston.
After President Trump’s April tariff announcement roiled markets, Hasbro officials postponed a decision on a potential move, promising an update would come this summer. The delay, combined with prior projections for $100 million to $300 million in annual revenue losses from the initial 145% reciprocal tariff with China — now scaled back to 10% — looked promising for Rhode Island’s ability to hang on to one of its top employers.
But after beating analysts’ forecasts in its second quarter earnings, Hasbro’s purse strings could loosen, especially if Massachusetts officials come through with tax incentives tied to a relocation.
For now, Hasbro is keeping mum.
“We have no new updates to share,” Andrea Snyder, a Hasbro spokesperson, said in an email Wednesday.
Gov Dan McKee’s office also did not immediately return for comment regarding his last discussions with Hasbro executives.
The company maintains its 1,000-person workforce in Rhode Island, having not given notice of any mass layoffs to the state Department of Labor and Training this year, despite prior warnings that tariffs could force staffing cuts. Private employers with more than 100 workers are required to give state and local officials 60 days notice before cuts under the Worker Adjustment and Retraining Notification Act.
Rhode Island leaders tried to entice Hasbro to stay within state lines, even if not at its Newport Avenue headquarters in Pawtucket, offering up a prime piece of undeveloped land in the I-195 Redevelopment District for $1. But more sweeping tax incentives, similar to what Massachusetts officials suggested in publicly released emails with Hasbro executives, were never put on the table for the Rhode Island General Assembly to consider during its 2025 legislative session.
Despite higher-than-expected second-quarter revenue and an improved year-end outlook, Hasbro is not out of the woods yet. Toy sales fell, especially in North America, in the second quarter amid uncertainty over how the ongoing trade war with China might impact retail pricing and demand. Anticipating additional fallout from the reciprocal tariffs, the company recorded a $1 billion non-cash impairment in its consumer products arm, leading to an $854.7 million profit loss for the quarter that ended June 30.
However, the $981 million in net, second-quarter revenue marks a 1% decrease over the second quarter of 2024, with adjusted operating profits of $247 million and adjusted earnings per diluted share of $1.30, a 7% increase year-over-year.
The magic of MAGIC: The Gathering
Much of Hasbro’s success rests upon its digital gaming business, including MAGIC: The Gathering, which saw revenue soar 23% compared with a year ago, with its latest product, Final Fantasy, marking the highest-grossing release in MAGIC history in the wake of a June 13 debut. Final Fantasy also brought in record numbers of new players in its first two weeks, according to Hasbro.
“This isn’t just a one-off moment,” Cocks said during the earnings call. “It’s a clear indication of the power of MAGIC’S community, our release cadence, and the resonance of our Universes Beyond strategy.”
The company also reported growth in its licensing business, with positive outlooks supported by a newly inked, multi-company deal to bring Hasbro games to casinos and online gambling, including through Bally’s Corp., which runs Rhode Island’s casinos.
Still, the company continues to look to cut costs and drive down debt, now anticipating $175 million to $225 million in cost savings this year through a combination of “cost discipline” and “opportunistic debt reduction,” Gina Goetter, Hasbro’s chief financial and chief operating officer, said on the earnings call.
Goetter did not provide details on future cost-cutting measures, including the impact to the local workforce.
Hasbro continues to shift its manufacturing away from China — where half of its toys are made — with the goal of cutting usage of Chinese materials and labor to less than 40% of products by 2026, Goetter said. At the same time, it has looked to move more production to the United States, including East Longmeadow, Massachusetts, where it already uses a European-owned manufacturing plant to make its board games.
Hasbro stocks rose 3.2% in pre-market trading immediately after the company reported its second-quarter earnings.
This story was originally published by the Rhode Island Current.
