The acquisition of Melissa & Doug is driving sales of the Spin Master toy portfolio.
In the third quarter of 2024, revenue surged 24.7% to $885.7 million, with Melissa & Doug accounting for $155 million. Toy revenue surged 34.8%, but this was offset by a 16.8% decline in digital games revenue and a 41.5% decline in entertainment revenue.
Total toy sales surged 36% to $922.7 million, compared with $678.6 million in the third quarter last year. Excluding Melissa & Doug, total toy sales increased 9.1% compared with the third quarter of last year.
While broader economic conditions remain a challenge, our toy sales growth in our key markets reflects our continued commitment to creating innovative products, strong brands and magical play experiences."
—Max Rangel, Global President and CEO of Spin Master
Spin Master pointed out that the decline in the business outside of toys was mainly due to higher competition compared with last year’s deliveries. Paw Patrol: The Full Movie and Unicorn Academy Plus the in-game spend is lower on the digital side. In toys, a shift in orders from the second to the third quarter helped drive growth.
Mark Segal, chief financial officer of Spin Master, added: “We are executing the integration effectively and have realized $4.5 million in net cost synergies year-to-date, and we continue to identify revenue growth opportunities.” “Adjusted EBITDA in the quarter increased by nearly $9 million, excluding Melissa & Doug and PAW Patrol Movies from the previous year. We maintain our 2024 outlook for Spin Master and Melissa & Doug. We continued to execute our capital allocation strategy and by the end of the third quarter, we had repurchased over 2 million shares under NCIB. Over the long term, we will continue to invest to drive growth while managing costs and maintaining financial flexibility to maximize shareholder value.
Spin Master will hold an earnings call tomorrow morning to discuss today’s report in detail.
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