Spin Master accelerates shift from China to dodge tariffs, share up on results
TORONTO – Spin Master Corp. says it has accelerated plans to diversify production out of China as a trade dispute between the world’s two largest economies drags on.
The Toronto-based toy company, which saw its shares jump more than 12 per cent Thursday on earnings, says it was already shifting away from the country but that the high-profile trade dispute between China and the U.S. has made it act faster.
Chief operating officer Benoit Gadbois says Spin Master started to diversify away from China in 2015 as costs rose at a time that 90 per cent of its production was based in the country.
He said on a conference call Thursday that about 65 per cent of the company’s production is now in China and the plan is to have it below 50 per cent next year.
China and the U.S. have imposed hefty tariffs as a trade dispute drags on. U.S. President Donald Trump rattled markets Thursday when he said he would impose a 10 per cent tariff on US$300 billion in Chinese goods not already facing tariffs.
Spin Master’s shares shrugged off a wider stock market reversal to close up $4.57, or 12.19 per cent, to $42.07 Thursday after reporting adjusted profits of 19 cents per share to beat analyst expectations of 13 cents per share according to financial markets data firm Refinitiv.