WORLD NEWS

Jakks Q3 results miss analysts’ estimates

Published on: 26th October 2018

Revenue for the quarter came in at $236.7m versus the consensus estimate of $258.58m.

Jakks Pacific reported Q3 EPS of $0.38, $0.23 worse than the analysts’ estimate of $0.61.

Jakks chairman and CEO Stephen Berman stated: “As was the case in the first half, during the third quarter we continued to see the impact of the US liquidation of Toys R Us, which offset the positive contribution of several successful product lines, including Incredibles 2, Fancy Nancy, Perfectly Cute, Squish-Dee-Lish and MorfBoard. The net sales declines of 10% in the quarter and 9% year-to-date were primarily the result of the loss of sales to Toys R Us and the disruption from its stores’ liquidation throughout the marketplace.”

“We saw expected declines in several entertainment-driven properties, but we were pleased with the performance of our new product segments. The investments in the C’est Moi and MorfBoard brands continue to show momentum as distribution broadens.”

“Like other companies in our industry, we have seen shifts in the retail landscape that require us to adapt our cost structure and overhead, and we are taking steps to reduce our operating costs and improve our profit potential. Earlier this month, we initiated a plan to reduce our global workforce and consolidate certain of our operations and functions to reduce overhead, most of which we expect to be realised in calendar year 2019.”

“As we look ahead to the holiday season, we continue to focus on new product launches and keeping retail inventories lean. We expect the toy industry in 2019 to benefit from the continued shift in sales to healthier retailers and a robust license environment.”

The company believes the market disruption and lingering effects of the Toys R Us bankruptcy and liquidation in the United States and internationally will continue to persist through the balance of 2018, and will result in a decline in net revenues in 2018 when compared to 2017.

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