On August 1, 2024, Jakks Pacific Inc (JAKK, Financial) released its 8-K filing for the second quarter of 2024, revealing a challenging period for the multi-brand toy company. Jakks Pacific Inc designs, produces, markets, and distributes a wide range of toys and consumer products, including action figures, dolls, toy vehicles, and more.
Performance Overview
Jakks Pacific Inc reported net sales of $148.6 million for Q2 2024, an 11% decrease from $166.9 million in Q2 2023. The company also reported a net income of $5.3 million, down 18% from $6.5 million in the same period last year. This resulted in earnings per share (EPS) of $0.47, beating the analyst estimate of $0.38. The revenue also exceeded the estimated $134.92 million.
Key Financial Metrics
Despite the decline in sales, Jakks Pacific Inc managed to improve its gross margin rate by 130 basis points compared to the previous year. The Dolls, Role-Play/Dress-Up division saw a 6.6% increase in net sales, reaching $63.6 million, while the Action Play & Collectibles division experienced a significant 30.5% drop, generating $36.6 million.
| Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| Net Sales | $148.6 million | $166.9 million | -11% |
| Net Income | $5.3 million | $6.5 million | -18% |
| EPS | $0.47 | $0.58 | -19% |
Management Commentary
“The first half of 2024 closes with our delivering solid results anchored by our evergreen business of time-tested toy categories and play patterns,” said Stephen Berman, CEO of Jakks Pacific Inc. “A lack of new content releases created unfavorable topline comparisons with prior year, but our base business continued to perform and adapt in an ever-changing marketplace.”
Balance Sheet and Cash Flow
As of June 30, 2024, Jakks Pacific Inc reported cash and cash equivalents of $17.9 million, down from $32.4 million a year earlier. Inventory levels also decreased to $51.3 million from $65.1 million in the same period last year. The company’s total assets stood at $378.3 million, with total liabilities of $182.4 million.
Challenges and Future Outlook
The decline in net sales was primarily due to a lack of new content-related product launches, which had bolstered sales in the first half of the previous year. Additionally, international sales were down 31%, impacted by logistics-related issues and unfavorable comparisons with the prior year's content slate.
Looking ahead, Jakks Pacific Inc is optimistic about its upcoming product launches, including new lines supporting "Moana 2" and "Sonic the Hedgehog™ 3," set to release in theaters later this year. These launches are expected to drive sales in the latter half of 2024.
For more detailed financial information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Jakks Pacific Inc for further details.
