Net sales grew 18%, the strongest quarterly growth the company has enjoyed in nearly five years.
Jakks has reported financial results for the third quarter ended September 30th, 2019. Net sales for the third quarter were $280.1m, up 18% compared to the same period last year. Sales in the 2019 third quarter were said to be boosted by strong initial sales of Disney Frozen II products.
Gross margin was 28.9%, up from 27.2% in Q3 of last year, while net income was reported as $16.4m, compared to $15.7m in 2018. Adjusted EBITDA was $44.1m, an increase of 64% over the third quarter of 2018.
Jakks chairman and CEO Stephen Berman commented: “We are pleased to report solid results across several financial metrics in the third quarter, as strong sales of Disney Frozen II, Disguise and Nintendo more than offset the declines of some older products. Our net sales grew 18% in the quarter, the strongest quarterly growth in YOY sales we have seen in nearly five years, led by online sales of our products, which were up 32% compared to last year. More importantly, we were able to improve gross margins and tightly managed expenses, resulting in a 64% year-over-year increase in Adjusted EBITDA.”
Jakks also announced that chief financial officer Brent T. Novak will step down in December 2019, and that the company is currently conducting a search for its next CFO. Brent commented: “I have appreciated the opportunity to work with Stephen and the Jakks team, and assisting in the completion of the Recapitalization transaction in August 2019.”
Stephen added: “Brent has been a valued member of the Jakks team since joining the company in April 2018. We wish him well in his future endeavours.”
The company stated in the report that its goal for 2019 is to grow sales by approximately 5% on a YOY basis with improved levels of Adjusted EBITDA, compared to 2018.
“We expect to close out the year on a strong note, and carry momentum into 2020,” concluded Stephen. “We remain committed to containing costs and managing our balance sheet prudently. We expect good performances over the holiday season from Frozen II, Nintendo, Disney Princess and X-Power Dozer.”