Spin Master reported a “challenging” first quarter, which followed a difficult fiscal 2019. The Canadian toy and entertainment company’s revenue for Q1 2020 declined 4.9% to US$227.3 million. Gross product sales for the same period were relatively steady, increasing by less than 1% to US$242.3 million.

The toyco’s remote control and interactive characters category fell 35% to US$20.2 million in the first quarter. The drop was driven by its Hatchimals brand, which also contributed to declines throughout fiscal 2019.

Revenue for the outdoor category was US$28.4 million, down 15.5% compared to last year. The outdoor category includes sales of products under the SwimWays, Kelsyus, Coop and Aerobie brands.

The preschool and girls category saw a 10.9% decline in revenue, to the tune of US$56.5 million. The decrease was driven by PAW Patrol, Twisty Petz and Off the Hook.

Additionally, Spin Master’s other revenue category declined 24.2% to US$21.9 million, due to a decrease in royalty income from products marketed by third parties using the company’s owned intellectual property.

Spin Master’s boys, action and construction category, however, increased 19.6% to US$59.1 million due to sales related to Bakugan, Tech Deck and DC.

Q1 2020 also saw an increase in revenue for the activities, games, puzzles and plush category, which was up 24% to US$78.1 million. The Kinetic Sand brand, along with Spin Master’s games and puzzles portfolio, drove strength for the category.

Gross product sales increased in North America (up 2.2% to US$144.6 million) and in Europe (up 13.6% to US$73.5 million) in the first quarter. Sales declined in the rest of the world, however, falling 29.4% to US$24.2 million.

Net loss for the first quarter was US$26.7 million (compared to US$20.9 million in Q1 2019). More than half of Spin Master’s manufacturing is in China (between 60% and 65%), and the company reported that while its capacity was affected early in Q1 2020, its production in the region has returned to normal levels.

Like Hasbro and Mattel, Spin Master withdrew its 2020 outlook. The company announced in February that its global president, COO and board director Ben Gadbois was stepping down, along with global operations and CIO Bill Hess. Looking forward, the toymaker announced it will take steps to reduce or defer its capital expenditures, and reduce its operating expenses in an effort to mitigate the effects of the COVID-19 pandemic.