Toronto-based Spin Master is heading into the most important selling period of the year with stronger financial momentum, a major PAW Patrol theatrical release and relatively clean retail inventories as Canada’s toy market comes off a year of substantial growth.
The toy and entertainment company reported revenue of US$436.4 million for the second quarter ended June 30, an increase of 8.9% from a year earlier. Toy revenue rose 12%, supported by core brands including PAW Patrol, Monster Jam and GUND, along with newer products and lines including 4D CrystaLynx, Primal Hatch and Cool Maker.
Part of that increase reflected the timing of retailer orders. Approximately US$40 million of gross product sales that Spin Master had expected to record in the third quarter were shipped during Q2, in part as retailers prepared for the August 14 theatrical release of PAW Patrol: The Dino Movie.
The early shipments put more merchandise into the market ahead of what Spin Master expects will be a major consumer event for the franchise. What happens next will be more important: whether shoppers move through the initial inventory quickly enough to generate additional retailer orders through the fall and holiday season.
PAW Patrol Sets Up a Critical Second Half
Spin Master has made the third PAW Patrol theatrical movie one of its three major priorities for 2026, and management said on its July 30 earnings call that early indicators around the release have been encouraging.
The second trailer for PAW Patrol: The Dino Movie, released June 11, generated 110 million views during its first week, according to the company. Management said the film was generally tracking at or above the first two movies with its target audience ahead of its North American release.
The theatrical launch is being supported by a broad merchandise program. Movie-related toys began appearing online through major retail accounts in July, followed by additional in-store distribution in early August. Spin Master has developed individual promotional programs for major retailers, including social content involving movie talent and an Amazon campaign featuring close to one million PAW Patrol Dino-branded delivery boxes.
The specific programs discussed on the earnings call were primarily focused on the U.S. market, although PAW Patrol has extensive Canadian retail distribution and the film and related merchandise are also launching in Canada.
Spin Master spent the first half reducing existing PAW Patrol inventory at retail before the movie assortment arrived. CEO Christina Miller said the company believes inventory levels are healthy and that Spin Master is positioned to supply additional quantities of products that emerge as strong sellers.
Cleaner inventories give retailers more room for the movie assortment and greater flexibility to respond once consumer preferences become clearer. Spin Master has said it intends to chase successful products with additional inventory where needed.
The approximately US$40 million pulled forward into Q2 still requires context. It represents product shipped to retailers earlier than originally anticipated, not US$40 million of incremental consumer demand. Management said initial sell-through was meeting expectations and promoted movie merchandise was beginning to see a lift, while noting that the selling cycle was still at an early stage.
The more revealing period begins following the August 14 release, when point-of-sale performance will show which products are resonating and whether retailers need to replenish their initial allocations.
Canadian Toy Market Enters 2026 With Momentum
The launch arrives after a particularly strong year for Canada’s toy industry. Tracked Canadian toy sales reached approximately C$2.68 billion in 2025, increasing 14% from about C$2.34 billion a year earlier, according to Circana data. Circana estimates its retail tracking service represents approximately 69% of the Canadian toy market.
Several of the stronger categories overlap with areas where Spin Master operates or is expanding. Games and puzzles recorded a 56% increase in tracked Canadian sales in 2025, while building sets increased 25%, arts and crafts rose 15% and action figures and accessories gained 13%. Vehicles grew 7%, while infant, toddler and preschool toys increased 6%.
Spin Master’s portfolio reaches across many of those areas, including PAW Patrol and Melissa & Doug in preschool, Monster Jam in vehicles, Rubik’s and other properties in games and puzzles, GUND in plush, and Kinetic Sand and Cool Maker in creative play. The company is also pushing further into collectibles and strategic trading cards as those categories take on a larger role within the wider toy industry.
The Canadian figures do not establish how the market will perform through the 2026 holiday season, but they show Spin Master entering the second half after a year of strong domestic spending across several categories relevant to its business.
PAW Patrol Extends Beyond the Toy Aisle
The scale of the movie launch also illustrates how Spin Master’s business has expanded beyond physical toys. The company organizes its operations around three creative centres: toys, entertainment and digital games. PAW Patrol: The Dino Movie gives the same franchise an opportunity to generate activity across all three.
Spin Master produces the PAW Patrol films and participates in their theatrical and subsequent distribution economics. Each movie also creates a new merchandising cycle for the toy business, while a new PAW Patrol digital game is launching around the latest theatrical release. The stand-alone game will be free to play with in-app purchases.
Television helps maintain engagement between theatrical releases, while movies create larger promotional moments that extend into merchandise and digital gaming. The model gives Spin Master several ways to build commercial activity around intellectual property it has developed over more than a decade.
The underlying franchise continues to show considerable longevity. Spin Master announced during the second quarter that Nickelodeon renewed PAW Patrol for Seasons 14 and 15, while spinoff Rubble & Crew was renewed for Seasons 5 and 6. The company said PAW Patrol remained the top-ranked preschool series year-to-date and continues to expand its audience through YouTube.
Theatrical releases have broadened that reach. The first PAW Patrol movie generated roughly US$144 million at the worldwide box office, while 2023’s PAW Patrol: The Mighty Movie produced a stronger North American theatrical result than its predecessor. Management said pre-release indicators for The Dino Movie have been running at or above the previous films.
Retail Ordering Patterns Begin to Normalize
Spin Master’s earnings call also provided insight into inventory behaviour among major toy retailers. Management said retailers have returned to more historical fall-set patterns in 2026 following several years of unusual volatility in order timing and inventory. Major accounts were completing their fall merchandise sets around the time of the July 30 call, providing greater visibility into how products will be positioned during the second half.
Spin Master expects a somewhat greater proportion of domestic replenishment orders this year. Retailers can carry more measured initial inventory positions and add merchandise closer to the point of sale as demand becomes clearer.
That could push a greater proportion of Spin Master’s annual revenue into the fourth quarter. The company expects third-quarter consolidated revenue to be generally stable, reflecting the US$40 million of orders brought forward into Q2 and the possibility that more replenishment occurs later in the year.
Management has stopped short of predicting a significant restocking cycle. Much will depend on consumer demand as retailers make subsequent buying decisions based on which products demonstrate the strongest turnover.
Melissa & Doug Turnaround Continues
Returning Melissa & Doug to growth is another major priority for Spin Master in 2026, more than two years after completing its US$950-million acquisition of the children’s toy business.
Melissa & Doug revenue declined during Q2, although the result was expected against an unusually strong comparison. Revenue had increased almost 40% in the second quarter of 2025, when the business had considerable domestic inventory available for sale to retailers.
Spin Master has since used promotions and off-price and discount channels to work through inventory while improving the economics of the business. Despite lower revenue this quarter, Melissa & Doug gross profit remained stable as gross margins expanded.
The company said it has also gained shelf space with key retailers and is introducing new products for the fall. Among them is Cherry Lane, a preschool collection featuring playsets, vehicles and figures designed around developmental play for toddlers and preschool-aged children. Spin Master said early performance has been encouraging.
Melissa & Doug is also moving into adjacent categories. A partnership with Penguin Random House will bring the brand into publishing, with books expected to launch this fall, while additional licensed products and collaborations are being introduced as part of the growth strategy.
Those efforts come as Canada’s preschool toy category has been expanding. Tracked Canadian sales of infant, toddler and preschool toys increased 6% in 2025, according to Circana.
Spin Master Expands Into Collectibles and Trading Cards
Spin Master’s longer-term strategy is taking the company further into categories reaching teenagers, adult collectors and hobby customers.
Management identified collectibles and strategic trading cards as priority growth areas. In May, Spin Master announced a global licensing agreement with Finnish mobile game developer Supercell covering franchises including Clash of Clans, Clash Royale and Brawl Stars. Toys and collectibles based on the games are targeted for launch in summer 2027.
The company is also preparing to launch Hellbreak, its strategic trading-card game, later this fall. Collaborations with AMC, Blumhouse and Lionsgate have been announced, with additional studio partners expected.
Toca Boca offers another example of Spin Master extending intellectual property into new channels. A Toca Boca lifestyle collection is scheduled to launch in more than 350 Miniso stores in the U.S. around the back-to-school period, taking a brand built primarily through digital gaming into physical retail.
Within Toca Boca World, Spin Master continues to work on conversion, content frequency and partnerships while preparing to launch a direct-to-consumer web store. The company expects the store to allow it to retain a greater share of revenue from purchases while building a more direct commercial relationship with players.
Pricing Held Steady Ahead of Holiday Season
Spin Master is heading toward the holiday period without some of the price increases it had previously contemplated. The company received approximately US$38 million in tariff refunds late in Q2, recorded as an offset to cost of sales. Spin Master excluded the refunds from its adjusted earnings measures because they are one-time in nature.
Management had previously estimated that higher oil prices and related pressures could add approximately US$15 million to second-half costs and had considered recovering much of that amount through higher prices.
Following the refunds, Spin Master decided not to proceed with those increases. CFO Jonathan Roiter said the company considered consumer conditions, its products and competitors in making the decision, while using the refund to help absorb additional costs. Management said it also intends to use the benefit to offset proposed new tariffs.
Holding prices could help support sales during a holiday period when households remain selective about discretionary purchases, although demand will ultimately depend on individual products and the broader consumer environment.
Spin Master maintained its full-year outlook despite the stronger second-quarter results, forecasting stable to low-single-digit revenue growth and mid- to upper-single-digit growth in adjusted EBITDA.
The second half accounted for 64% of Spin Master’s revenue last year and generated all of its annual profit, leaving much of the company’s 2026 performance dependent on the months ahead.
Spin Master enters that period with new products reaching shelves, older inventories reduced, retailer programs underway and one of its most important entertainment franchises returning to theatres. Canada’s toy market is also coming off a year of strong growth across several categories in which the Toronto company competes.
The next test will come from consumers. The performance of PAW Patrol: The Dino Movie and Spin Master’s broader fall lineup will determine which products generate the repeat orders needed to carry that momentum through the holiday season.
