Spin Master Corp. updated its outlook for full-year gross product sales and adjusted EBITDA margin for the year ending Dec. 31, 2019.
The company expects to report a decrease of approximately 1% in gross product sales for last year when compared to 2018 during its Q4 and full-year financial results. The financials will be revealed after markets close on Wednesday, March 4. The Toronto-based toy and entertainment company says that the revised guidance reflects the U.S. toy industry decline of between 2% to 4%, according to recent reports.
“Our overall performance in the fourth quarter and for 2019 as a whole, was disappointing relative to our outlook in early November,” says Ronnen Harary, Spin Master’s co-CEO. “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 as we have in previous years, at the level we needed to in order to meet our profitability targets. We continue to remain focused on the execution of our long-term strategy. As we look forward to 2020 and beyond, the strength, diversity, and depth of our innovative brands, entertainment franchises, and mobile digital portfolio, along with our track record of successful innovation, gives us confidence in delivering our long-term organic gross product sales growth target of mid to high single-digits.”
In November, Spin Master’s previous guidance was that the company expected gross product sales to grow in the low single-digit range compared to 2018. The company says that it took a hit from the shortened U.S. holiday shopping season, operational challenges from tariff threats, the consolidation of its East Coast business, and a massive drop in sales for its Hatchimals brand.
Spin Master says that excluding sales of Hatchimals products, which declined more than $230 million last year, its gross sales rose approximately 16% over 2018.
The company recently launched its new Batman toy collection, the first wave of products to come from a new three-year licensing partnership with Warner Bros. Consumer Products (WBCP) to develop toys based on DC Comics.