Why Hasbro Stock Won the Game on Thursday

Games and toys company Hasbro (NASDAQ: HAS) reported powerful profits, even in the face of markets made turbulent by President Donald Trump's tariffs campaign. Reporting Q1 2025 earnings, Hasbro exceeded expectations, earning $1.04 per share instead of analysts' expected $0.67. Sales also came in strong at $887.1 million, versus expectations of $770.6 million.

Hasbro Q1 earnings

Not all the news was good. Actual earnings, as calculated according to generally accepted accounting principles (GAAP), were not "$1.04" per share, but only $0.70. Still, that worked out to a 66.7% increase over Q1 2024 levels.

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Sales grew 17% year over year, led by 46% growth in the company's flagship Wizards of the Coast (and digital gaming) business, both of which should be largely insulated from tariffs concerns. On a more granular level, sales were driven by strength at Magic: The Gathering, where sales also rose 46%. In consumer products (i.e. toys and board games), sales slipped 4%.

Free cash flow (defined as operating cash flow minus capital expenditures and capitalized software costs) declined 28% to $94.9 million. But Hasbro's quality of earnings looks good. Those $94.9 million in cash profits backed up 95% of the company's reported net income.

Is Hasbro stock a buy?

Turning to guidance, Hasbro is sticking with its February guidance, "given the uncertainty of the current tariff environment." And what was Hasbro's guidance in February? Digging through the SEC filings, it seems that in February, Hasbro told investors to expect sales up only "slightly" in 2025.

From an investor's perspective, I find this disconcerting. Sales surged 17% in Q1, but full-year sales will still be up only "slightly"? That sounds like Hasbro is actually forecasting a significant slowdown in sales this year, albeit it's taking some pains not to say that out loud.

Crazy as it may sound to say it, if you own Hasbro stock and are enjoying strong price gains today, now might be a good time to lock in those gains -- and sell Hasbro stock.

Should you invest $1,000 in Hasbro right now?

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Hasbro. The Motley Fool has a disclosure policy.