You wouldn’t know there was an escalating global trade war by looking at Hasbro Inc.’s first-quarter balance sheet.
But the Pawtucket company’s $887 million first-quarter profit doesn’t reflect $100 million to $300 million in revenue losses projected for this year as a result of “reciprocal” tariffs with China and other key international manufacturing hubs for its products.
In an earnings call with investors Thursday morning, hours after Hasbro posted its first-quarter financial report, CEO Chris Cocks detailed the challenges that lie ahead for the toy and game empire under President Donald Trump’s current tariffs.
“Even with Hasbro’s relative strength and flexibility, logistics are becoming more complex and changes in receivables and shipping dynamics present a challenge,” Cocks said. “Ultimately, tariffs translate into higher consumer prices, potential job losses as we adjust to absorb increased costs, and reduced profits for our shareholders.”
There were no specifics shared on layoffs or price hikes.
Hasbro has accelerated a shift away from manufacturing in China — where 50% of its toys are made now — and intends to reduce its reliance on Chinese materials and labor to less than 40% of toys by 2026, Gina Goetter, Hasbro chief operating and financial officer, told investors during the call.
Other cost-cutting measures on the horizon include “source optimization” and “targeted pricing actions.” Together with potential layoffs and “prioritizing debt reduction,” Goetter estimated the company would see a net profit loss of $60 million to $180 million this year, mostly reflected in the second half of the year. The estimates are based on an existing 145% U.S. tariff on Chinese goods and a 10% tariff on goods from other countries.
No mention was made of Hasbro’s potential relocation to Massachusetts during the earnings call nor in the financial report. But costs associated with swapping its circa 1900 headquarters on Newport Avenue in Pawtucket for a piece of prime Boston-area real estate could be off the table as uncertainty roils the stock and bond markets.
Earlier this month, as Hasbro’s stocks plunged to a 52-week low, company executives postponed the headquarters announcement. Originally expected within the first three months of the year, Hasbro now expects to provide “clarity” on potential moving plans in the summer, Andrea Snyder, a company spokesperson, said previously.
Gov. Dan McKee’s office was last in touch with Hasbro via email on April 11, Olivia DaRocha, a spokesperson for McKee’s office, said in an email Friday afternoon.
Earlier this month, DaRocha said the administration will “remain engaged” with Hasbro. The publicly traded international company first opened as a family-owned pencil box maker in Providence, and still employs roughly 1,000 workers in Rhode Island.
The economic roller coaster set off by Trump’s trade policies has not yet hit home for Hasbro, though. The company saw profits rise 17% compared with a year ago, boosted by a 46% increase in its digital gaming business, featuring Magic: The Gathering and Dungeons & Dragons products.
Its digital gaming segment has been shielded from tariffs because its products are made in the U.S. or are digital, executives said.
The company has also not revised its guidance to investors on its annual performance.
“While we are dealing with a wide range of potential tariff, retailer and consumer outcomes, our games business and our strategic flexibility give us options,” Goetter told investors on the call.
Earnings per diluted share rose to 70 cents per share, up from 42 cents a year ago. Hasbro also saw stocks rebound slightly in the last 30 days. Shares opened at $61.84 Friday morning.
Updated to include a response from Gov. Dan McKee’s office.
This story was originally published by the Rhode Island Current.
