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JAKKS Pacific (JAKK) Q4 Earnings & Revenues Beat Estimates

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JAKKS Pacific, Inc. (JAKK - Free Report) reported fourth-quarter 2022 results, with earnings and revenues surpassing the respective Zacks Consensus Estimate. The metrics declined on a year-overyear basis.

Stephen Berman, chairman and CEO of JAKKS Pacific, stated, “2022 exceeded our expectations with a second consecutive year of 20+% sales growth and, more importantly, strong retail sell-through for our customers. In Q4, and in the new year, we focused on resetting our inventory position and warehouse capacity and feel well-positioned for the new year. Our North American business grew 27% on a full-year basis, and our International business grew by 38%.”

Q4 Earnings and Revenues

During the quarter, the company reported an adjusted loss of $1.44 per share, narrower than the Zacks Consensus Estimate of a loss of $1.49. In the prior-year quarter, the company reported adjusted earnings per share (EPS) of 14 cents.

JAKKS Pacific, Inc. Price, Consensus and EPS Surprise

 

JAKKS Pacific, Inc. Price, Consensus and EPS Surprise

JAKKS Pacific, Inc. price-consensus-eps-surprise-chart | JAKKS Pacific, Inc. Quote

 

Quarterly revenues of $131.9 million surpassed the consensus mark of $81 million by 62.2%. However, the top line declined 30% on a year-over-year basis. The downside was mainly due to the prioritization of FOB sales and the related changes and seasonality of the business.

Net sales in the company’s Toys/Consumer Products segment declined 34% globally (34% North America, 35% International) on a year-over-year basis. Sales in the Disguise costumes segment increased 61% year over year.

Operating Highlights

In the reported quarter, gross margin came in at 21.7%, down 490 basis points from the prior-year quarter. The downside was mainly caused by a lower capitalization of warehouse costs, higher tooling amortization, obsolete inventory and royalty expense. However, this was partially offset by a fall in inbound freight expenses. Adjusted EBITDA came in at $(12.1) million during the quarter against $5 million reported in the prior-year quarter.

Balance Sheet

As of Dec 31, 2022, the company’s cash and cash equivalents (including restricted cash) came in at $85.5 million compared with $76.6 million as of Sep 30, 2022. Debt, non-current portion, net as of Dec 31, 2022, was $41.6 million compared with $65.2 million as of Sep 30, 2022.

2022 Highlights

Net sales in 2022 came in at $796.2 million compared with $621.1 million in 2021.

Adjusted EBITDA in 2022 came in at $76.4 million compared with $49.2 million in 2021.

In 2022, adjusted earnings per share (EPS) came in at $4.28 compared with $2.59 reported in the previous year.

Zacks Rank & Key Picks

JAKKS Pacific currently has a Zacks Rank #4 (Sell).

Some better-ranked stocks in the Zacks Consumer Discretionary sector are Las Vegas Sands Corp. (LVS - Free Report) , Bluegreen Vacations Holding Corporation and Crocs, Inc. (CROX - Free Report) .

Las Vegas Sands sports a Zacks Rank #1 (Strong Buy). LVS has a long-term earnings growth rate of 2.5%. The stock has increased 46.5% in the past year.  You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for LVS’ 2023 sales and EPS indicates a rise of 107.7% and 217.5%, respectively, from the year-ago period’s estimated levels.  

Bluegreen Vacations sports a Zacks Rank #1. BVH has a trailing four-quarter earnings surprise of 11.6%, on average. Shares of the company have increased 5.5% in the past year.  

The Zacks Consensus Estimate for BVH’s 2023 sales and EPS indicates a rise of 0.2% and 10.2%, respectively, from the year-ago levels.  

Crocs carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 21.8%, on average. Shares of Crocs have increased 63.5% in the past year.

The Zacks Consensus Estimate for CROX’s 2023 sales and EPS indicates a rise of 12.4% and 0.9%, respectively, from the year-ago period’s levels.


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