Games Workshop shares fell as much as 6.5 per cent after it warned that US tariffs and higher plastic costs could place further pressure on its business, overshadowing another year of record sales and profit.

The company expects new US tariffs to create an annualised cost of approximately £13m during its current financial year.

It also flagged a roughly £2m impact from higher plastic costs amid supply-chain disruption and volatility across global energy markets. Games Workshop said it had secured enough plastic to deliver its plans for 2026/27, with suppliers holding additional raw materials to reduce the risk of shortages.

The warnings prompted Games Workshop shares to fall as much as 6.5 per cent on Tuesday. They were trading at £195.64 shortly before 9am, giving the FTSE 100 business a market value of approximately £6.46bn.

Profit reaches record £275.7m

The share-price decline came despite Games Workshop reporting record group revenue and profit for the year to 31 May.

Total sales increased 6.8 per cent from £617.5m to £659.7m, while pre-tax profit rose 4.9 per cent from £262.8m to £275.7m.

Operating profit advanced from £261.3m to £275m, and profit attributable to shareholders increased to £206m from £196.1m. Basic earnings per share climbed from 594.9p to 624p.

Chief executive Kevin Rountree said Games Workshop and the Warhammer hobby remained “in great shape”, with record group sales and pre-tax profit supported by another strong performance from its core miniature business.

Core revenue, which includes the sale of miniatures, paints, rulebooks and other hobby products, rose 10.9 per cent to £626.8m. At constant exchange rates, it increased 12.2 per cent to £634.1m.

Core operating profit jumped £33.3m to £245.1m, taking its margin from 37.5 per cent to 39.1 per cent.

Games Workshop’s core gross margin also improved from 69.5 per cent to 71.1 per cent as higher volumes, production efficiencies and lower material purchasing costs offset part of the impact from tariffs and packaging taxes.

Independent retailers drive growth

Sales through independent retailers remained Games Workshop’s largest channel and delivered the strongest growth during the year.

Trade revenue surged 17.2 per cent to £405.3m and represented 65% of core sales, compared with 61 per cen a year earlier.

The number of independent trade accounts carrying Games Workshop products increased by approximately 1,000 to 9,100 globally. Its products are also stocked across more than 3,000 larger chain-store outlets carrying a smaller range aimed at recruiting new customers to the hobby.

North American trade sales rose 13.5 per cent to a record £170.9m, while the team serving the UK and continental Europe delivered a 17.9 per cent increase to £180.4m.

Trade revenue in Asia jumped 38.3 per cent to £23.1m, with the business seeking to expand the Warhammer hobby across China, South Korea, Japan and Southeast Asia.

Sales through Games Workshop’s own stores edged up 2.1 per cent to £131.4m, accounting for 21 per cent of core revenue.

The retailer opened 42 shops during the year, including six relocations, and closed 14. This took its global estate from 570 to 598 stores.

Its portfolio included 134 UK stores, 212 in North America, 175 across continental Europe, 47 in Australia and New Zealand and 30 across Asia at the end of May.

UK store sales slipped 0.5 per cent to £36.8m, while North American retail revenue fell 1.5 per cent at reported exchange rates to £50.9m.

Continental Europe performed more strongly, with sales rising 12.3 per cent to a record £31.1m. Japanese store revenue climbed 23.2 per cent to £4.2m, while its shops in Singapore, Malaysia and China also improved their performance.

Games Workshop said almost all its stores remained profitable under its relatively low-cost operating model. The average capital expenditure required for its shop openings was approximately £40,000, while average rents increased by about two per cent at constant currency.

The group is also planning to open a larger Warhammer World location outside Washington DC in summer 2027, although the project is running slightly behind its original milestones.

Online sales were broadly flat, slipping 0.6 per cent to £90.1m at reported exchange rates, although they increased 2.3 per cent on a constant-currency basis.

Orders placed online for collection from a Warhammer store rose 9.5 per cent to £10.4m. Games Workshop said its ecommerce platform also acted as a “virtual stockroom” for its shops and independent retail partners, allowing customers to access its wider range regardless of where they chose to purchase.

Click here to sign up to Retail Gazette‘s free daily email newsletter