Company expects long term overall growth despite acknowledging Q3 challenges.
Spin Master has announced its financial results for the third quarter ended 30th September. Revenue decreased by 11.6% from $620m to $548.1m, compared to the same period in 2018, while gross product sales decreased by 11.4% to $583.3m from $658.2m. The decline was driven primarily by a fall in sales of Hatchimals products. This was partially offset by growth in Boys Action and High-Tech Construction.
Sales increased 1.6% in Europe and declined 15.3% and 12.1% in North America and Rest of World, respectively.
Ben Gadbois, Spin Master’s president and COO commented, “Increased inventory levels arising from our decision to bring in inventory earlier to mitigate US tariffs, together with short term disruption caused by our US East Coast warehouse consolidation, created congestion in our US supply chain. This resulted in a significant shift of both shipments and orders from the third quarter to the fourth quarter. We are pleased with the progress we have made in October, with both orders and shipments off to a strong start. We remain on track to deliver top line growth for the full year.”
The company stated that it will continue to focus on driving growth, and reiterated its principle strategies, which include: innovation using Spin Master’s global internal and external research and development network; developing evergreen global entertainment properties; increasing international sales in developed and emerging markets; and leveraging the company’s global platform through strategic acquisitions.
“We have made solid strides in executing our long-term growth strategies,” said chairman and Co-CEO Ronnen Harary. “While our performance in the third quarter was negatively affected by several challenges, we do not believe it is indicative of our expected full year 2019 performance nor our long-term growth and value creation prospects. We believe Spin Master’s diversified portfolio of brands and franchises, driven by our relentless focus on innovation and storytelling, is strong and healthy and the power of our international platform as well as our ability to capture the hearts and minds of kids with engaging multiplatform entertainment and digital content, will continue to drive long term profitable growth.”