As Toys “R” Us continues the process of shuttering its US operations, Toronto-based toy and entertainment company Spin Master has reported record first quarter revenue to the tune of US$285.7 (up 25.5%). The company’s net income, however, fell by 13.8% to US$8.7 million in the period ended March 31, thanks to a Toys “R” Us bad debt expense.
Spin Master’s adjusted earnings, meanwhile, increased by 40.4% to US$43.3 million, and gross profit for the quarter was up 31.3% to US$148.8 million (representing 51.2% of revenue).
The company’s overall gross product sales rose by 25.7% to US$288 million in Q1, driven by Hatchimals, Luvabella and its Games segment. In fact, strong sales for Hatchimals Colleggtibles (pictured) and Luvabella led to a 95.9% jump to US$91.1 million for Spin Master’s Remote Control and Interactive Characters segment.
The Activities, Games & Puzzles and Fun Furniture segment grew by 20% to US$57.6 million, thanks primarily by Cool Maker branded products, Kinetic Sand and the Games portfolio (including Cardinal).
The Boys Action and High-Tech Construction segment was up by 27.1% to US$16.7 million due to strength in Tech Deck and Flush Force, while the Outdoor segment saw 8.9% growth to US$40 million.
Lower sales for Teletubbies and Powerpuff Girls offset strong demand for PAW Patrol in the Preschool and Girls segment, which fell by 2.5% to US$82.6 million.
Spin Master’s Other Revenue, meanwhile, was US$29.8 million in Q1 2018 (up 45.5% from the same period last year). This segment reflects merchandising royalty and TV distribution income from products marketed to third parties using Spin Master’s owned IP, as well as app revenue from Toca Boca and Sago Mini.
Spin Master’s first quarter results come as many other toycos— including Hasbro, Mattel and Jakks Pacific—are reporting losses attributed in large part to Toys “R” Us liquidations. Spin Master’s solid Q1 2018 sales also follow a strong fiscal 2017, in which the company reported revenue of US$1.55 billion for the full year (an increase of 34%) with significant growth in its Remote Control and Interactive Character segments.
On March 5, Spin Master acquired US plush manufacturer Gund from Enesco for approximately US$76 million. The deal closed on April 2, and Gund will be included in Spin Master’s Activities, Games & Puzzles and Fun Furniture segment going forward.