Spin Master (TOY) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue declined 8.6% year-over-year to $328.5M, reflecting anticipated lower sales due to prior year order pull-forward ahead of U.S. tariffs and macro uncertainty.

• Net loss widened to $32M ($0.32 per share) from $24.5M ($0.24 per share) in Q1 2025; adjusted net loss was $24.1M.

• Free cash flow improved to $71.1M from negative $10.8M year-over-year, with operating cash flows rising to $103M, driven by working capital management.

• Focused on product innovation, expanding evergreen brands, and stabilizing Melissa & Doug, driving positive operational performance.

• Strategic investments in creative capabilities and digital engagement are laying groundwork for future growth.

Financial highlights

• Q1 consolidated revenues decreased 8.6% ($328.5M vs $359.3M), mainly due to prior year retail order pull-forward from tariff concerns.

• Adjusted EBITDA was $17.2M, down $4.4M year-over-year, with margin at 5.2%.

• Adjusted operating loss increased to $23.8M from $5.9M, mainly from higher depreciation and amortization tied to new content delivery.

• Gross profit decreased to $173.2M from $194.9M, with gross margin down 150bps to 52.7%.

• Operating cash flows rose to $103M, driven by working capital management, tax refunds, and lower cash operating expenses.

Outlook and guidance

• Reiterated 2026 guidance for stable to low single-digit revenue growth and mid to upper single-digit adjusted EBITDA growth.

• Q2 expected to see stable to low single-digit growth in revenue and adjusted EBITDA, with toy segment as primary driver.

• H2 expected to bear the impact of higher input costs (~$15M) from oil price increases, but mitigation plans are in place.