Hasbro Inc. (HAS.O) reported second-quarter profit and sales that exceeded analysts’ projections as shoppers snapped up Avengers and Aladdin toys following the latest blockbuster film releases.

• Revenue for the world’s largest publicly traded toymaker was $984.5 million, the second straight quarterly gain. Earnings before interest, taxes, depreciation and amortization rose 41 per cent, also beating estimates.

Key Insights

• The company said its entertainment slate continued to improve, buoyed by the recent releases of “Avengers: Endgame” and “Aladdin,” whose toys it sells. Hasbro also has toy licences for popular franchises such as “Frozen” and “Star Wars,” which will see new films this holiday season.
• Hasbro reported an improvement in its margins. The results also show the company is finally recovering from the effects of Toys “R” Us’s liquidation -- a key hurdle for the company.
• One major headwind could still be ahead: China-made toys are on the list of items that could be hit with tariffs if the U.S. and China don’t reach a trade deal. Jefferies analysts said last week that a 10 per cent hike would be “digestible,” but a 25 per cent tariff would stunt demand.

Market Reaction

• The shares are up 34 per cent this year through Monday’s close.