• Hasbro stock jumped 5% on Thursday after the company reported fourth-quarter earnings.

• Strength in Hasbro's stock price could largely be attributed to the continued growth of Magic: The Gathering.

• Hasbro reported mixed earnings results and offered 2023 guidance that was below analyst estimates.

Hasbro stock jumped as much as 5% on Thursday after the company reported mixed fourth-quarter earnings results and offered 2023 guidance that was below analyst expectations.

Notably, the toy company revealed that Magic: The Gathering, the beloved fantasy trading card game, has become its first billion dollar brand by annual sales.

Here were the key numbers:

Revenue: $1.68 billion, versus analyst estimates of $1.58 billion
Adjusted earnings per share: $1.21, versus analyst estimates of $1.29
2023 adjusted earnings per share guidance: $4.45 to $4.55, versus analyst estimates of $4.88

Hasbro CEO Chris Cocks said its 2022 financial results came below its own expectations as revenue fell 16% year-over-year in the fourth-quarter due to an overall slump in holiday toy sales. But Cocks went onto highlight what's working for the toy maker.

"Despite this, we delivered our first billion-dollar brand in Magic: The Gathering and another record year at Wizards of the Coast and Digital Gaming," Cocks said.

Cocks called the $1 billion milestone for Magic: The Gathering a big achievement for not just the company, "but for the thousands of hobby shops" across the country.

The reported boom in Magic: The Gathering sales comes as fans and local game store owners have voiced growing complaints that Hasbro is over-monetizing the game by producing too many new expansions and releasing too much peripheral content.

The owner of Action City Comics in Brooklyn, NY, Eric LaGaccia, told Insider last week that Hasbro is "trying to milk as much money from [Magic: The Gathering] customers as possible."

Bank of America this month criticized Hasbro for its monetization strategy of Magic: The Gathering, making a second scathing call for the stock since November. "Within its Wizards segment, Hasbro continues to destroy customer goodwill by trying to over-monetize its brands," BofA said in a note last week.

While Hasbro's strategy has paid off, given that Magic: The Gathering grew revenues 40% in the fourth-quarter to $263 million, Cocks admitted that the company might have been too aggressive with its monetization strategy last year.

"We were too aggressive in some of our pricing assumptions, notably our 30th anniversary edition of Magic and pulled back on available supply impacting Q4 results," Cocks said on Hasbro's earnings call. "We're taking some of the feedback to heart."

The 30th anniversary release angered fans with an eye-watering price tag, with a set of four booster packs, which contain 15 cards each, selling for $1,000. Additionally, fans have complained about too much crossover with other established brands and the general pace of new releases making cards quickly irrelevant in competitive play.

But Hasbro still plans to move forward with a number of new cross-themed Magic: The Gathering releases in 2023 to expand its player base and grow the business. "We feel good about the fundamentals of Magic," Cocks said.

Read the original article on Business Insider