TORONTO — Spin Master Corp. says it continues to face challenges from inflation, higher interest rates and a slowdown in consumer spending, including on toys, that it predicts will remain through least the end of the year.
"We expect this environment will continue throughout 2024 as consumers manage through the impact of high interest rates and inflation," he added.The comments came as Spin Master reported a loss of US$54.8 million in the first quarter, compared with a loss of US$1.9 million a year earlier. Its revenues totalled US$316.2 million, up from US$271.4 million during the same quarter last year.
Chief financial officer Mark Segal said in a release that toy gross product sales excluding the acquisition's impact were in line with a year earlier, during what's normally the lowest quarter for the toy industry. The company was focused on Melissa & Doug's integration efforts during the first quarter, improving cost efficiencies from the acquisition and moving toward $6 million in net cost savings this year, it said in the release. The goal is to achieve $25-$30 million in savings and efficiency by the end of 2026."We've already begun to capitalize on cost synergies and identify revenue growth opportunities," Segal said in a statement.
Despite a strong lineup, Segal said the company is expecting the toy industry will continue to face headwinds from an ongoing economic slowdown. The company, majority-owned by ATCO, said the Yellowhead Mainline project would include 200 kilometers of pipeline and related control and compression facilities that will run from Peers, Alberta, to Edmonton. Development of the pipeline comes as demand for gas grows from Alberta's industrial expansion and population growth as well as from offshore buyers as Canada's first liquefied natural gas export terminal comes online next year.