Spin Master Earnings: Despite Another Year of Weak Industry Demand, Acquisitions Drive Sales Growth

There weren't many surprises in no-moat Spin Master’s fourth-quarter report, given that the firm offered preliminary results on Feb. 14. At that time, the company said fourth-quarter sales had risen 8% to USD 503 million and indicated that, if Paw Patrol distribution revenue is excluded, full-year EBITDA margin was up slightly from 2022’s 19.2%. In the final report, sales closely match our forecast, but 2023 adjusted EBITDA margin of 22% outperformed our 20% estimate on lower ocean freight costs and improving mix.