More Hatchimals are on the way, despite botched holiday launch of originals
Executives at Canadian toymaker Spin Master said the company had “never experienced anything like the frenzied demand for Hatchimals” that helped increase the company’s fourth-quarter revenue by 30.9 per cent from 2015 to 2016.
Hatchimals, plush animatronic creatures that emerge from an egg after receiving some tender loving care, became a must-have toy this past Christmas season. The toys received press coverage around the world after reports that many Hatchimals failed to hatch, disappointing children and frustrating parents, some of whom shelled out big money for the coveted toys on the black market.
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“Initial shipments flew off customer shelves following our Hatchimal Hatch Day on October 7th, and we could not restock fast enough,” said Spin Master chief operating officer Ben Gadbois on a Tuesday conference call with investors.
“I’m glad to say that Hatchimals are back in stock at major retailers, and demand remains strong.”
Number of defective Hatchimals unknown
Spin Master has not publicly disclosed how many Hatchimals have been sold — much less how many have failed to hatch — but Gadbois said the company has recorded “well over two million successful hatches.”
Parents told CBC News that their kids were disappointed by Hatchimals that failed to hatch. (Provided/Jessica Perkins)
Executives on the conference call did not reveal the exact problem with the defective Hatchimal toys, how many Hatchimals were replaced, or the cost of replacing them. And the company declined to take questions from a CBC News reporter on the conference call.
Spin Master’s fourth quarter gross sales for the toy category including Hatchimals increased 85.2 per cent compared to the fourth quarter of 2015, to $92.6 million US. For all of 2016, sales of that segment increased 21.2 per cent over 2015, to $282.8 million US.
In February, Spin Master received an “Innovative Toy of the Year” award for Hatchimals at the North American International Toy Fair.
New Hatchimals on the way
Despite the launch problems, Spin Master executives indicated that the company is betting on Hatchimals for the future.
“Obviously when you have such a success, it is important to maximize the opportunity,” said Gadbois.
Collectible Hatchimals will be coming “in a few months,” he said. The collectibles “will be priced at $2.99 per single pack,” and will also be available in packs of up to one dozen. There will be 70 different collectible Hatchimals, said Gadbois, who cited research from consumer research firm NPD that shows collectible toys are in-demand.
A more expensive Hatchimal toy, “Hatchimal Glitter Garden,” will be launching in mid-2017, according to Gadbois.
“These critters have sparkles in their fur, and hatch out of shimmering speckled eggs,” he said.
Gadbois also promised “another big surprise for our second Hatchimal day,” around October 6.
Spin Master reported revenues of $338.4 million US in the fourth quarter of 2016, up 30.9 per cent from the same quarter in 2015. Revenues increased 26.1 per cent year-over-year after excluding revenue from Swimways Corporation, which was acquired in the third quarter of 2016.