Toymaker Spin Master says it’s ‘too early’ to predict how the holiday season will go

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TORONTO — Spin Master Corp. is unsure how much of a gift this holiday season will be for toy manufacturers.

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The Toronto-based company behind brands including Paw Patrol and Rubik’s Cube said Thursday that the industry believes this Christmas is going to be “a little bit choppier” with consumer behaviour “less predictable and more spread out this season than we’ve recently seen.”

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“So while we think we have the right products … we’re also recognizing that this is a unique Q4 and that Q4 will be an important part of our year,” said Spin Master’s chief financial officer Jonathan Roiter on a call with analysts.

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The uncertainty is a reflection of the ripple effects that U.S. tariffs have had on everything from manufacturing to consumer spending.

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The impacts are persisting as the toy industry heads into its most important stretch of the year, which spans from Black Friday in November to the conclusion of the December holidays and Boxing Day.

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“Certainly, it’s too early in the quarter to shape up how the consumer is going to turn up, but I mean these next 10 weeks are critical in the year,” Roiter said.

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Earlier Thursday, Spin Master announced its third-quarter profit and revenue fell compared with a year ago as it said it faced an uncertain economic environment and a shift in retailer buying behaviour driven by the impact of tariffs.

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The toy company, which keeps its books in U.S. dollars, said it earned US$106.8 million or US$1.03 per diluted share for the quarter ended Sept. 30.

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It compared with a profit of US$140.1 million or US$1.32 per diluted share in the same quarter last year.

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Revenue totalled US$734.7 million for the quarter, down from US$885.7 million a year ago.

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Toys revenue for the quarter amounted to US$650.4 million in the quarter, down from US$810.9 million a year ago, while entertainment revenue totalled US$32.8 million, down from US$37.1 million. Digital games revenue rose to US$51.5 million from US$37.7 million a year ago.

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“This quarter, toys, entertainment, and digital games once again captured the imagination of kids and parents, reflecting our focus on innovation and storytelling,” CEO Christina Miller said on the same call as Roiter. “However, underlying performance was not matched in our financial results, but this was anticipated.”

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On an adjusted basis, Spin Master says it earned US$1.11 per diluted share in its latest quarter compared with an adjusted profit of US$1.60 per diluted share in the same quarter last year.

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The quarter spanned a period when U.S. President Donald Trump continued disrupting the global economic status quo, antagonizing trading partners with new, elevated tariffs.

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It forced toy companies to consider where they make their products, what tariffs would do their costs and how much of a price increase customers could bear.

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Spin Master’s calculations have been predicated around the U.S. being one of its most important sales markets and China being a production powerhouse.

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Trump has threatened to hit China with a 157 per cent tariff. This week, however, he started walking that back by musing about a 47 per cent duty instead.