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Mar 31, 2024
JAKKS Q1 2024 Earnings Report
JAKKS Pacific's financial performance declined in the first quarter of 2024 due to decreased net sales and lower gross margins.
Key Takeaways
JAKKS Pacific reported a decrease in net sales by 16% year-over-year, driven by the absence of new film releases compared to the previous year. The gross margin also decreased by 580 basis points, leading to an operating loss of $21.3 million compared to $4.4 million in Q1 2023. The company completed the retirement of its Preferred Shares, removing restrictions on common stockholders' claims over the enterprise.
Net sales decreased by 16% to $90.1 million due to a lack of new film releases compared to the prior year.
Gross margin declined by 580 basis points to 23.4% due to higher inventory obsolescence expense and retailer markdowns.
Operating loss widened to $21.3 million, compared to an operating loss of $4.4 million in Q1 2023.
The company retired its Preferred Shares, eliminating restrictions on common stockholders' claims.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
The company is focused on the fall season, supporting two major film releases planned for Q4, and expanding its international network.
Positive Outlook
- Supporting two major film releases planned for Q4 of this year.
- Gaining traction on new 2025 initiatives.
- Relentless efforts to expand the international network.
- Retiring Preferred Shares at a negotiated discount.
- No lenders or other parties restricting the common stockholders’ claim over the entire enterprise.
Challenges Ahead
- Experienced lower shipping and retail sales due to the absence of new film releases in Spring 2024.
- Weakening demand for products from a Q4 2023 film release.
- Funded retailer markdowns to move excess stock.
- Addressed cancelled reorders for which inventory had been built.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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