The acquisition of Melissa & Doug is driving sales in Spin Master’s toy portfolio.
For the third quarter of 2024, revenue spiked 24.7% to $885.7 million, including $155 million attributed to Melissa & Doug. Revenue in Toys spiked 34.8%, accompanied by a 16.8% decline in Digital Games and a 41.5% dip in Entertainment.
Gross product sales in Toys spiked 36% to $922.7 million versus $678.6 million in Q3 last year. Excluding Melissa & Doug, gross product sales in Toys increased 9.1% over Q3 last year.
Although the broader economic conditions remain a challenge, we generated toy sales growth across major markets reflecting our continued commitment to creating innovative products, powerful brands and magical play experiences."
Spin Master notes that declines outside of toys were primarily due to tough comps against last year’s delivery of PAW Patrol: The Mighty Movie and Unicorn Academy paired with lower in-game spending on the digital side. In toys, a shift of orders from Q2 into Q3 helped push the gains.
“We are executing effectively on the integration, delivering $4.5 million in net cost synergies year to date and we are continuing to identify revenue growth opportunities,” adds Mark Segal, Spin Master’s Chief Financial Officer. “Adjusted EBITDA for the quarter was up just under $9 million comparatively, excluding Melissa & Doug and the PAW Patrol movie in the prior year. We are maintaining our outlook for 2024 for both Spin Master and Melissa & Doug. We continued to execute our capital allocation strategy and by the end of Q3, we repurchased over 2 million shares under our NCIB. Over the long term, we will continue to invest to drive growth, while also managing our costs and preserving financial flexibility to maximize shareholder value.”
Spin Master will host an earnings call tomorrow morning to discuss today’s report in detail.
