The company has announced its financial results for the fourth quarter and full year 2019.
The results show that Spin Master’s global Q4 revenue increased by 14.3% to $473.5m, with gross product sales growing by 18.3% to $550.7m. Gross product sales increased by 27.2% in Europe, 18.8% in North America and 1.6% in the Rest of World. However, the company posted a net loss in Q4 of $17.2m, compared to a net income of $11.4m in the previous year.
Full year revenue decreased by 3.1% to $1,581.6m, while gross product sales decreased by 1.0% to $1,691.2m. Gross product sales increased 14.4% in Europe and decreased by 4.9% in the Rest of World and 5.4% in North America .
Commenting on the results, Spin Master’s chair and co-CEO Ronnen Harary said: “Our overall performance in the fourth quarter and for 2019 was disappointing. Despite the solid performance of several of our brands and franchises, we were unable to fully offset the year over year decline in Hatchimals sales. Furthermore, we did not execute at the level needed to meet our profitability targets. Our industry is evolving and we are moving quickly to adapt to the new opportunities, leveraging the underlying strength of our core business, our dedication to innovation, our global distribution network and our financial stability. As we consider our prospects for 2020 and beyond, the strength, diversity and depth of our portfolio give us confidence that we will deliver long-term growth.
We are committed to re-energizing our top line as well as developing a broad program that builds operating efficiencies into our business. Regarding COVID-19, we are monitoring the situation very closely and are assessing the impact to our supply chain as information becomes available. It is anticipated that the evolving conditions will have an impact on our global operations, as our manufacturing base in China , which produces approximately 60% of our goods, is not yet able to produce at full capacity. We do not know what the rest of the year will bring but we have initiated a broad range of actions to attempt to mitigate disruptions.”
A statement accompanying the results provided further comment on the potential impact from COVID-19: “ The Company expects 2020 gross product sales to decline in the mid-single digit range relative to 2019, excluding any supply chain and other disruptions resulting from COVID-19. We expect COVID-19, based on currently known factors, to further reduce 2020 gross product sales, resulting in a decline towards the higher end of the mid-single digit range. COVID-19 is expected to affect second quarter shipments in particular.”
