TORONTO – Spin Master Corp.‘s busiest time of year left the business with some holiday blues — a US$184.3 million loss.
The Toronto-based toy maker behind the Paw Patrol, Hatchimals and Melissa & Doug brands announced the fourth-quarter result Thursday, saying it compared with a profit of US$21.1 million or 20 cents US per diluted share a year earlier.
The company, which keeps its books in U.S. dollars, blamed the loss on a US$229.1-million non-cash impairment of goodwill and intangible assets and said it came as Spin Master capped “a challenging year for our U.S. toy sales.”
“We navigated a difficult tariff macro environment and while we achieved many of our goals, our results did not meet our expectations we set at the beginning of the year,” conceded CEO Cristina Miller on a call with analysts.
Manufacturers like Spin Master have faced a litany of challenges in the last year as U.S. President Donald Trump pummeled Canada and several other countries with tariffs, prompting some to respond with levies of their own.
While Trump didn’t always follow through with the tariffs, his threats caused mass uncertainty for business owners. In some instances, their supply chains were disrupted and they were forced to rethink how they make products, what route they should take to get to customers and how much of their manufacturing could be repatriated.
Spin Master responded to the shifts by dramatically reducing its reliance on China — another of Trump’s tariff targets — for production. It was also affected because the U.S. is the biggest aggressor in the trade war and one of the company’s most important markets.
Those dynamics especially hurt Spin Master brand Melissa & Doug, which makes wooden toys meant for preschoolers to use in pretend play.
“The vast, vast majority of its production was coming out of China and the vast majority of sales were into the U.S. and so, it had a disproportionate impact,” Spin Master chief financial officer Jonathan Roiter said on the same call as Miller.
The pain point was reflected in Spin Master’s fourth-quarter results, which showed the company earned 41 cents US per diluted share on an adjusted basis, down from 55 cents US per diluted share a year earlier.
Revenue also reached US$618.2 million in the period ended Dec. 31, down from US$649.1 million a year earlier.
Spin Master’s toy revenue alone was US$522.3 million, down about seven per cent from a year earlier. The company attributed the drop to lower gross product sales, which were triggered by global headwinds from the quickly changing tariff policies and a continued slowdown in orders from U.S. retailers. Those challenges spurred the company to resort to higher markdowns and more promotions to get inventory sold.
Revenue, however, was up by 15.8 per cent to $53.4 million in its digital games business as customers made more in-game purchases when playing Toca Boca World and increasingly subscribed to Piknik.
Revenue also rose in the company’s entertainment segment, increasing by 2.9 per cent from last year to US$42.5 million.
In its outlook for 2026, Spin Master said it expects stable to low single-digit percentage growth in revenue compared with 2025.
That outlook prepares the company for the possibility that an uncertain economy will temper demand for toys from U.S. consumers but also factors in growth that may come from the upcoming release of the new Paw Patrol movie and digital games.
This report by The Canadian Press was first published March 5, 2026.
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