Spin Master says YTD growth has outpaced the industry but that Q3 revenue was impacted by early shipments and current economic challenges.
Spin Master has announced its financial results for the both three and nine month periods ending September 30th, 2022.
“We remain committed to our long-term growth strategy through the development of innovative toys, engaging, multiplatform entertainment content and creative, open-ended digital game experiences,” said Max Rangel, Spin Master’s Global president and CEO. “While our year-to-date growth has outpaced the toy industry globally, our revenue this quarter was affected by the pull forward of toy shipments into the second quarter, and by the challenging macroeconomic factors affecting consumers.”
Compared to the same Q3 period in 2021, revenue was $624.0m, a decrease of 12.7% from $714.5m. Constant currency revenue was $643.7m, a decrease of 9.9%, from $714.5m. Excluding Paw Patrol: The Movie distribution revenue in the prior year, constant currency revenue decreased by 6.5%.
Revenue by segment declined by 9.1%, 30.1%, 35.7% in Toys, Entertainment and Digital Games, respectively.
During the quarter, Spin Master acquired assets from SolidRoots LLC, a creator of family board games. This acquisition is expected to complement the company’s existing Board Games offering. The company also completed the acquisition of Nørdlight Games AB, a digital game studio based in Sweden, which it had previously taken a minority investment in via Spin Master Ventures. The move supports plans to grow revenue and penetration within the Digital Games segment.
“We firmly believe that the power of our innovative toy portfolio, diversified entertainment pipeline and suite of digital games will drive solid results,” added Max Rangel. “As we look forward to 2023 and beyond, we will continue to allocate capital to grow the business over the long term by leveraging the strength, diversity and depth of our innovative brands, entertainment franchises and digital games, as well as M&A, to maximize shareholder value.”
Mark Segal, Spin Master’s chief financial officer, added: “As expected, revenue growth in the third quarter was a difficult comparison due to the shift of customer shipments into the second quarter this year, a decline in digital games revenue and from Paw Patrol: The Movie distribution revenue recognized in the prior year. Despite this revenue decline, gross margin across our creative centres was up.”
Spin Master said it will continue to balance investments designed to deliver on its long-term strategy while also effectively managing costs, and that the company remains confident in its high levels of operational discipline and ability to navigate retailer and consumer dynamics to deliver profitable growth for 2022.