Spin Master slows after logistics issues; WowWee spins up shipments

Toymaker Spin Master Corp. reported fourth-quarter 2020 revenues that rose 3.6% year over year, despite an 11.8% drop in gross product sales in North America as a result of reduced sales of previous years' hits such as Hatchimals and Owleez. That has not stopped the company from running up U.S. seaborne imports, which rose 36.2% year over year in the fourth quarter of 2020, Panjiva's data shows. There are signs of moderation in the new year, however, as imports dipped 5.9% in January and February combined.

The company's North American business also faced higher sales allowances. Spin Master said it "experienced significant logistics and warehouse issues" that had to be addressed during the year, according to CFO Mark Segal. It has also seen a rotation in its supply chain, with imports from China soaring 133.6% year over year in the fourth quarter of 2020 while those from Vietnam and Taiwan dropped, reversing a three-year shift away from China.

While January and February are normally the deep off-peak season for toy importers, there has nonetheless been a 20.3% year-over-year rise in total U.S. seaborne toy imports, including a 30.2% increase in February. That likely reflects late deliveries resulting from more widespread logistics challenges than those flagged by Spin Master, as discussed in Panjiva's research of Feb. 22.

Among the major toy importers, the expansion in the first quarter so far has been led by Hasbro Inc. and Mattel Inc., with growth of 32.8% and 24.1%, respectively, in January and February combined. Among the second-tier companies, imports linked to WowWee Holdings Inc. jumped 147.1% after declining throughout 2020, potentially reflecting the launch of its Pop2Play folding activity sets. Meanwhile, JAKKS Pacific Inc. continued to experience a decline in shipments, with a 13.8% dip in January and February after earlier logistics challenges.

Christopher Rogers is a senior researcher at Panjiva, which is a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence. Links are current at the time of publication. S&P Global Market Intelligence is not responsible if those links are unavailable later.