Games Workshop raised its core revenue outlook and expects slightly improved pre-tax profits despite a fall in licensing income and rising tariff costs
The Nottingham-based maker and retailer of tabletop games has revised its sales and profit outlook, signaling improved trading momentum. Management told shareholders on Friday that it now expects core revenue of at least £625 million for the year to May 31, up from the prior year’s £565 million.
In this context, core revenue refers to the company’s primary sales from its own channels and product lines, rather than ancillary income sources. The announcement arrived amid wider investor interest in specialty retail businesses that combine in-house products with licensing partnerships.
Alongside the top-line upgrade the group also outlined profit expectations and a shift in the composition of income. The company projects pre-tax profits of at least £265 million for the same reporting period, a modest increase versus last year’s £262.8 million.
Here, pre-tax profit denotes profit before the deduction of corporation tax and is a common yardstick for comparing underlying operational performance. Despite stronger sales, the company cautioned that certain revenue streams would be weaker this year, reflecting a rebalancing between direct sales and licensed income streams.
Revenue mix and licensing headwinds
A notable element of the update is the expected drop in licensing revenues tied to the Warhammer brand. The business said licensing receipts would be at least £30 million, down from £52.5 million in the prior year. The term licensing revenues covers income from third parties that pay to use the company’s intellectual property in products, media, and collaborations. Management indicated that while these agreements remain strategically valuable, timing and the pipeline of third-party projects have caused a short-term reduction in that line of income.
Why the licensing shortfall matters
Licensing income can be lumpy, and a weaker year does not necessarily signal a structural problem for the brand. The company’s core retail performance has carried the business in the face of this decline: direct sales channels, including company-owned stores and online, helped offset softer third-party deals. Investors often view a strong base of core revenue as evidence of underlying customer demand and product resilience, which in this case supported the group’s ability to lift its overall sales forecast despite the licensing gap.
Costs, tariffs and geographic footprint
The group warned that rising import taxes would add pressure to margins, estimating around £12 million of incremental costs this year, particularly affecting shipments to the United States. These tariff costs reflect changes in trade policy and import pricing that hit companies with international supply chains. Games Workshop operates 575 stores worldwide, with the largest footprint in North America (202 shops) and 134 locations in the UK. That global network both supports local sales growth and exposes the business to cross-border cost fluctuations.
Operational resilience across markets
Having a mix of company-owned shops and digital channels helped the retailer manage regional volatility. The breadth of the retail estate means the firm can lean on stronger markets while absorbing temporary pressures in others. The company’s retail-led model—where product design, manufacturing relationships and direct merchandising converge—remains the engine behind the improved core revenue forecast.
Market reaction and analyst view
Financial markets responded positively to the update; shares were about 3% higher on Friday morning after the announcement. Equity analysts saw signs that trading had regained pace following softer growth earlier in the year. Andrew Wade of Jefferies described the latest trading note as evidence of a recent re-acceleration in momentum and characterized the overall performance as solid, broadly in line with his expectations and ahead of market consensus. Such commentary helped underpin investor confidence that the company can convert stronger sales into sustained profitability despite the short-term licensing decline and higher import costs.
In summary, the business update from this Nottingham-based retailer combines a stronger-than-expected sales outlook with modest profit improvement, tempered by a decline in licensing revenues and a headwind from tariff costs. With a substantial global store network and robust direct sales, the firm appears positioned to navigate these challenges while continuing to grow its core franchise.
