Spin Master Inc. outlined full-year guidance of low single-digit revenue growth and mid to high single-digit EBITDA growth at the CIBC Eastern Institutional Investor Conference on September 24, 2026, while disclosing that a $40 million tariff refund was directed entirely toward debt reduction rather than earnings.
CFO Jonathan Bernstein said the midpoint of guidance assumes approximately 70 basis points of EBITDA improvement year-over-year. As of the third quarter, the company reported EBITDA of $29.22 million, trailing twelve-month revenue growth of 15.2%, and a gross profit margin of 44.63%.
Bernstein noted that about $50 million in cost of goods sold was affected by tariffs during the year. Spin Master received a $40 million refund, which was used to pay down debt. Separately, crude oil rising above $100 a barrel in March added roughly $15 million in cost pressure from resin, components, and transportation — an impact Bernstein said was absorbed within guidance.
The company also announced a supply chain shift, reducing production out of China for its legacy Spin Master business to about 25% by year-end.
"Every single year we are essentially resetting our line," Bernstein said. "When we build next year's line, we took into consideration where commodity prices were, and so we adapted ultimately what the product is, how much plastic is being used, et cetera, as well as the mix."
On the brand side, the third PAW Patrol theatrical film released in August 2026 earned approximately $150 million to $155 million at the box office and generated $20 million in production revenue in Q3. Netflix viewership for the brand rose 5%. At a premium price point, the company said over half of its SKUs are priced below $19.99, while items such as a $79.99 PAW Patrol truck with an inflatable dinosaur represent the higher end of the range.
Melissa & Doug, acquired three years prior, saw July and August sell-in improve year-over-year with stable point-of-sale in August. Its Cherry Lane dollhouse, featuring modular design for younger children, sold out immediately on the direct-to-consumer channel upon launch in August. An ice cream shop partnership with Van Leeuwen has become the brand's top DTC product. The company is expanding Melissa & Doug internationally into Canada and Europe.
Hapiko, an AI-enabled physical toy that turns children's ideas into colorable stickers, has sold out 13 times since launch under a recurring-replenishment model. Toca Boca, the company's gaming platform, reports 50 million to 60 million global active users, over 60% of whom are female and targeted at ages 6 through early teens. Piknik, integrated with the Lylli reading app, has about 500,000 subscribers catering to a younger audience.
Digital and entertainment businesses carry approximately 67% gross margins, compared with 50% for toys. The company aims for 50 to 100 basis points of annual margin expansion over time.
On the balance sheet, leverage stood at 0.3x excluding capital leases as of Q2 2026, with a debt-to-equity ratio of 0.05 and total debt to capital of 0.04. Spin Master has paid down $350 million of debt since the Melissa & Doug acquisition and returned $200 million to shareholders through buybacks and dividends. The dividend, now yielding 3.72%, has been raised for four consecutive years.
Bernstein characterized consumer demand as resilient. "Toys is something that certainly people make trade-offs for," he said.
