While the toy industry as a whole showed a 16% sales increase for the first half of the year, major toymakers are experiencing declines in sales and overall revenue as retailers moved through stock on hand as certain categories spiked in waves.
The Toronto-based toy and entertainment company reported a 10.9% sales decrease in Q2 alongside a 12.4% decline in overall revenue versus the same period last year. Sales in North America increased slightly, while sales in Europe dropped 21.6% and the rest of the world had a whopping 42.4% decline. Bright spots include a 19.2% sales increase across activities, games and puzzles, and plush, and a 9.1% sales increase for outdoor toys. Gross product sales for the first half of the year were down 5.9%.
“This quarter, we demonstrated meaningful progress toward resolving the operational challenges we experienced in 2019,” says Ronnen Harary, co-CEO, Spin Master. “We are incredibly proud of the global Spin Master team, who remained focused on driving improvements across the company, while also managing through the complexity of COVID-19 for the full quarter. Our performance in the second quarter, which showed strong POS across most of our key brands, highlights the resilience of the toy industry, the strength of our diversified portfolio of brands, entertainment franchises, and digital toys, and our global platform. This is underpinned by our strong financial base, which positions us well for long term success.”
Spin Master says that sales declines in PAW Patrol, Twisty Pets, DreamWorks Dragons, Bakugan, and Hatchimals have been offset by growth in other lines, including DC Comics-licensed products, Tech Deck, Monster Jam R/C, Kinetic Sand, and its games and puzzles portfolio.
Spin Master has a fresh product lineup waiting in the wings for fall that should benefit from the increased traffic at POS that retailers and other toymakers are reporting.
“Looking forward, global economies are reopening, but risk remains elevated and we are taking a cautiously optimistic approach to the second half,” Harary says. “New opportunities continue to emerge, and we are prepared to take advantage as they arise.”