bought the dip today Spin Master Corp. (TOY-T) slid 3.2 per cent following the late Wednesday release of better-than-expected fourth-quarter 2023 results and guidance for fiscal 2024.
The Toronto-based toymaker reported adjusted EBITDA of $65-million, up from $12.4-million during the same period a year ago and well above the Street’s projection of $47-million. Gross margins came in a 52.1 per cent, up 2.2 per cent year-over-year and also better than forecasts.
“The company’s 2023 adjusted EBITDA margin of 22 per cent is impressive and much higher than historical levels of 19-20 per cent,” said Stifel analyst Martin Landry in a note. “Spin Master expects to maintain this high level of profitability on its legacy businesses in 2024 calling for EBITDA margins to remain stable at 22 per cent when excluding Melissa & Doug. This guidance translates into 2024 adjusted EBITDA of $498-million, higher than our expectations of $484-million and consensus of $482-million. Management expects 2024 revenue to be flat year-over-year when excluding the contribution from the Melissa & Doug acquisition which is similar to Mattel’s flat revenue and better than Hasbro’s 7-per-cent decline in revenues. We expect Spin Master’s shares to react well to these results [Thursday].”