Hasbro raises annual forecasts on digital gaming demand, 'Magic' boost

By Neil J Kanatt

July 21 (Reuters) - ‌Hasbro raised its ​annual ​revenue and profit forecasts on Tuesday, betting on resilient demand for its digital gaming business and continued strength in "Magic: The Gathering," sending the ‌company's shares up about 11% in early trading.

The company also beat ⁠second-quarter sales and profit estimates and said the flagship "Magic" franchise fueled a 27% rise in revenue ‌at its Wizards of the ‌Coast and Digital Gaming unit, compared with 16% growth a year earlier.

Stronger spending by higher-income consumers helped Hasbro offset weak demand from lower-income households facing persistent ​inflation.

"Magic player base is growing, new players are growing, we're reacquiring lapsed players." CEO Chris Cocks said.

Hasbro launched the "Secrets of Strixhaven" series in April and its "Marvel ⁠Super Heroes" title last month, and expects to release its Star Trek-themed set in November.

"The second half of ​the year is a little bit of a wild card," James Zahn, editor-in-chief of Toy Book magazine, said, adding that Magic's ​release schedule is heavier than last year's.

The Play-Doh ‌maker now expects annual revenue to grow in the range of 5% to 7%, compared with its prior forecast of 3% ⁠to 5%. Analysts expected growth of 6.3%, according to data compiled by LSEG.

Some analysts, however, called the forecast conservative.

Hasbro's finance chief Gina Goetter said the forecast primarily accounts for the strong ⁠growth in the first half of the year, and that uncertainty around the crucial holiday ​season exists.

"A lot can change between September and December. So it (forecast) just allows us a little bit of protection."

It sees annual adjusted core profit between $1.45 billion and $1.50 billion, compared with the ‌previous outlook range of $1.40 billion to $1.45 billion.

Second-quarter revenue rose 16% to $1.14 billion, topping analysts' estimates of $1.07 billion.

The company's quarterly adjusted profit ‌fell 1.5% to $1.28 per share. Analysts had estimated a profit of $1.14 per share.

Hasbro said it ⁠incurred $11 million in incremental expenses ‌in the quarter from a ​cybersecurity incident that occurred in March, and expects additional related costs in the future.

(Reporting by Neil J Kanatt in Bengaluru; Editing by ‌Leroy Leo)

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