Canadian toymaker Spin Master Corp. is monitoring the Russian invasion of Ukraine but says it has minimal exposure to the two eastern European countries. 

"We are carefully watching the situation between Ukraine and Russia," Mark Segal, chief financial officer of the Toronto-based company, said during a call with analysts. But he said less than two per cent of Spin Master's gross product sales are derived from Russia.

The toymaker behind brands like Paw Patrol, Hatchimals and Gund does have a small warehouse in Moscow but its primary distribution centres are in Central and Northern Europe, Segal said. 

In Ukraine, Spin Master has a "couple of million dollars" in sales through a third-party distributor, he noted. 

His comments came during a call with analysts to discuss Spin Master's fourth-quarter earnings, which topped expectations with higher sales and profit and set the stage for 2022. 

Despite the strong results, the toymaker is tracking a number of potential headwinds for the coming year. 

The removal of stimulus payments in the United States, rising interest rates and inflation could put pressure on disposable incomes and Spin Master's sales growth, Segal said. 

"We expect to see some costs remain at elevated levels and other costs rising, although not at the same rate as 2021," he said. 

Spin Master raised prices last year to partially offset higher input costs, especially with ocean freight. 

"We will continue to take pricing selectively, and implement other measures to allow us to remain neutral from a margin perspective in our toy business," Segal said. 

"These actions include ongoing collaboration with our suppliers in Asia, pre-buying electronic components, evaluating parts substitutions, facilitating inventory pre-build strategically to reduce the impact of COVID lockdowns and finally increasing multi-carrier ocean freight sourcing for cost and predictability."