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Mar 31, 2020
JAKKS Q1 2020 Earnings Report
JAKKS Pacific's first quarter earnings were impacted by supply chain strains and volatile environment due to COVID-19, but net sales decreased only by 6% and gross margins improved.
Key Takeaways
JAKKS Pacific reported a decrease in net sales by 6% to $66.6 million compared to the same period last year, but gross margin improved to 24.6%. The company experienced a net loss attributable to common stockholders of $12.3 million, or $0.41 per share. Despite challenges from COVID-19, the supply chain has almost completely returned to normal, and the company is focusing on evergreen product lines and reducing operating expenses.
Net sales decreased by 6% to $66.6 million due to COVID-19 impacts.
Gross margin improved to 24.6% due to better product margins.
Net loss attributable to common stockholders was $12.3 million, or $0.41 per share.
The company is focused on evergreen product lines and cost reduction measures.
Forward Guidance
JAKKS Pacific expects continued retail disruption in the second half of the year, but anticipates it will ease as stay-at-home guidelines are lifted. The company will focus on products that remain in demand and expects to benefit from pent-up demand and clean retail inventories later in the year.
Positive Outlook
- Retail POS trends were positive during the first quarter and have continued to be positive in recent weeks.
- Focus on products that remain in demand even with the disruption to normal buying patterns
- Expect to benefit from pent-up demand
- Expect to benefit from clean retail inventories later in the year.
- Strong relationships with key licensors and manufacturing partners, as well as valued retail partners
Challenges Ahead
- Expect retail disruption to continue
- Challenges in managing supply-chain
- Volatile environment in March
Historical Earnings Impact
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Avg. Return Before/After Earnings
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