Spin Master cancels toy price hikes, offsets costs with $37.9M tariff refund

TORONTO – Spin Master Corp. is rethinking a plan it had to increase toy prices.

The Toronto-based company behind Paw Patrol, Melissa & Doug and Hatchimals was previously set to use price hikes to offset US$15 million in additional costs it was expecting to incur from the war in the Middle East through the second half of this year. 

But chief financial officer Jonathan Roiter now says that’s no longer necessary because Spin Master is getting US$37.9 million back from the U.S. government after its Supreme Court ruled in February that a 10 per cent global tariff on imports President Donald Trump had applied was unconstitutional. The move allowed companies who had paid the tariffs since 2025 to apply for refunds.

“With the reception of the tariff refunds, we’ve decided to utilize those refunds to counter the increased costs without having to increase pricing,” Roiter explained on a Thursday call with analysts.

The refunds will also help the company head off potential impacts of new tariffs of 10 to 12.5 per cent that U.S. President Donald Trump has said he will start applying to imports from multiple countries starting Aug. 19, Roiter added.

Spin Master shelled out about US$30 million on tariffs last year and anticipates a similar spending level this year, excluding the refund. 

Many of its toys are manufactured in China, Vietnam, India, Mexico, Indonesia and the European Union. U.S. retailers are among Spin Master’s biggest buyers, making Trump’s ever changing array of tariffs a headache for businesses like Spin Master.

Despite the challenges, the toy maker reported Thursday a second-quarter profit of US$29.7 million. That compared with a loss of US$46.5 million a year earlier.

The company, which keeps its books in U.S. dollars, said its profit amounted to 29 cents US per share for the quarter ended June 30, compared with a loss of 46 cents US per share a year earlier.

On an adjusted basis, it earned eight cents US per share in its latest quarter compared with a loss of seven cents US per share in the same quarter last year.

Revenue for the quarter totalled US$436.4 million, up from US$400.7 million in the second quarter of 2025.

Toy revenue in the quarter reached US$361.1 million, up from US$322.3 million a year ago, while entertainment revenue amounted to US$31.2 million, down from US$32.1 million in the same quarter last year.

Digital games revenue was US$44.1 million, down from US$46.3 million in the second quarter of 2025.

Moving forward, chief executive Christina Miller said the company has three goals: capture the upside of a forthcoming Paw Patrol movie, return the Melissa & Doug brand to growth and fully realize the value of digital game Toca Boca by providing more opportunities for fans to engage with the brand.

The company has also been working to expand its audience with a global licensing agreement it struck with mobile games giant Supercell in May. Spin Master intends to make toys linked to Supercell’s games like Clash of Clans, Clash Royale, and Brawl Stars.

It will also develop trading cards for its Hellbreak game through partnerships with studios AMC, Blumhouse, and Lionsgate.

This report by The Canadian Press was first published July 30, 2026.

Companies in this story: (TSX:TOY)

Note to readers:This is a corrected story. A previous version referred to new U.S. tariffs applying at a 50 per cent rate.