Spin Master (TOY) CIBC Eastern Institutional Investor Conference summary

Supply chain and input costs

• Legacy production in China fell to ~25%; supply chain was diversified by year-end. Tariffs affected ~$50 million of COGS this year; a ~$40 million refund was excluded from earnings and used to repay debt.

• Retailer line-setting returned to August historical norms this year, extending shelf time; domestic replenishment share versus direct imports was stable, with potential Q4 replenishment pickup as products sell through.

• Oil, resin, transportation and component inflation are expected to add ~$15 million of cost this year; pricing was not raised, with next year's product design, plastic use and mix adjusted to protect target price points and margins.

Financial outlook and margins

• Full-year outlook remained low-single-digit revenue growth and mid- to high-single-digit EBITDA growth; Q3 revenue was expected to be stable and EBITDA to decline slightly YoY, within the full-year range.

• Q3 toy revenue had a ~$40 million timing headwind from sales shifted from Q3 to Q2; normalized for the shift, toy sales were expected to grow. Q3 gross margin contraction was expected at ~200 bps.

• Q3 margin pressures included movie production amortization, lapping high-margin digital partnership revenue, ~$15 million of commodity costs and ~$12 million of marketing moved from Q2 to Q3.

• Full-year guidance midpoint implied ~70 bps YoY improvement; longer-term annual margin expansion target was 50–100 bps, supported by growth mix toward digital and entertainment and continued cost-base work.

Brand and franchise updates

• Melissa & Doug July–August sell-in was up on easier comps, with August POS stabilizing; priorities are product newness and shelf space, with broader U.S., Canadian and European distribution.

• Cheery Lane launched in August and sold out on the DTC channel; partnerships include Random House books and Van Leeuwen, while new products are helping expand distribution and shelf space.

• PAW Patrol's August movie was tracking at $150–155 million box office and generated $20 million of Q3 production revenue; related toys outperformed the first two movies, and U.S. POS turned positive in August and remained positive.

• PAW Patrol Netflix viewership was up 5%; new digital game and series content support brand health, with further announcements planned. A movie cycle takes 3–4 years from greenlight to release.

• Consumer demand was described as resilient across income segments; more than 50% of SKUs are priced below $19.99, alongside premium offerings such as a $79.99 PAW Patrol movie-related toy.