Hasbro, Inc. filed a lawsuit on February 27, 2026, seeking refunds of tariffs imposed under President Donald Trump’s emergency trade measures. The company’s claim follows the U.S. Supreme Court’s February 20 ruling in Learning Resources Inc. v. Trump and V.O.S. Selections v. United States, which held that the International Emergency Economic Powers Act does not authorize the president to impose sweeping tariffs.
Hasbro estimates that it paid up to $60 million in tariff costs between April 2025 and February 2026, with an average tariff rate of 25%. The lawsuit could recover those payments and reduce the company’s import costs, directly benefiting the Consumer Products segment that has been pressured by tariff increases and macro‑economic headwinds.
In its 2025 earnings, Hasbro reported a 14% revenue rise driven by the Wizards of the Coast and Digital Gaming segments, while the Consumer Products segment saw a 4% decline in full‑year revenue and a 7% drop in Q3 2025. The company posted a net loss of $2.30 per share for 2025, largely due to a non‑cash goodwill impairment charge. The Q4 2025 results were a bright spot: adjusted earnings per share of $1.51 beat the consensus of $0.99 by $0.52, and revenue of $1.45 billion exceeded the $1.26 billion estimate by $0.19 billion. Operating margin in Q4 2025 expanded to 20.6% from 5.4% a year earlier, reflecting a favorable mix shift to higher‑margin segments and disciplined cost management.
Management highlighted the company’s “Playing to Win” strategy, noting that cost productivity and pricing discipline helped protect margins amid tariff volatility. The lawsuit is part of a broader wave of legal challenges by importers seeking refunds for IEEPA tariffs, underscoring the uncertainty surrounding U.S. trade policy and its impact on the toy industry.
For 2026, Hasbro expects constant‑currency revenue growth of 3%–5% and an adjusted operating margin of 24%–25%, signaling confidence in its cost‑control initiatives and the continued strength of its digital‑first play strategy. The potential refund could further improve margins, but the company remains cautious about ongoing tariff uncertainty and macro‑economic headwinds that could affect the legacy Consumer Products segment.
Market reaction to the Q4 2025 earnings was positive, with the company’s shares rising about 2% in pre‑market trading. The beat was driven by strong performance in the Wizards of the Coast segment and disciplined cost management, which offset the decline in the legacy consumer products line.
The lawsuit’s outcome could materially alter Hasbro’s cost structure and profitability. A successful refund would reduce import costs and improve margins, while a dismissal would leave the tariffs in place and potentially exacerbate margin compression in the Consumer Products segment. The case also signals to other importers that legal recourse is possible, potentially influencing future litigation and trade policy compliance strategies.
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