Spin Master remains ‘on track to deliver top line growth for the full year,’ it has said, despite a dip in its Q3 financials for 2019.
The global children’s entertainment company has released the results for the third quarter, ended September 30, 2019, citing that the company has “made solid strides in executing its long-term growth strategies.”
Q3 revenue for the Canadian toymaker hit $548.1 million, a decrease of 11.6 per cent from $620 million the year prior. The firm saw gross product sales decrease by 11.4 per cent to $583.3 million from $658.2 million.
The decline here has been driven primarily by a decline in Hatchimals in the Remote Control and Interactive Characters segment, but partially offset by growth in Boys Action and High Tech Construction.
In Europe, the picture was positive where gross product sales increased 1.6 per cent, while international gross product sales on a combined basis were 36.2 per cent of total gross product sales, increasing from 33.3 per cent.
Spin Master states its result do reflect a number of changes, a vast number circling US tariffs and congestion in its US supply chain, but maintains that its Q3 results are not indicative of its expected full year 2019 performance or its long term growth and value creation prospects.
Ronnen Harary, Spin Master’s chairman and Co-CEO, said: “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 multi-platform entertainment and digital content, will continue to drive long term profitable growth.”
Ben Gadbois, Spin Master’s president and chief operating officer, added: “Our decision to manage our brands more tightly using domestic replenishment and an evolving retailer trend away from direct import orders towards domestic orders shifted shipments from the third quarter to the fourth quarter.
“In addition, 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.”