In This Article:
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Revenue: Over $300 million in Q3 2024, slightly more than last year.
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Gross Margin: 33% in Q3, with gross profit dollar growth of 2%.
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Net Inventory: $63.5 million at the end of Q3, down from $68.8 million last year.
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Debt Status: Company remains debt-free.
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Adjusted EPS: $4.79 for Q3 and $4.50 for the first nine months.
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Adjusted EBITDA: $58.5 million, reflecting an 8.5% EBITDA margin.
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Sales Performance: Dolls role play and dress-up business up 6% in Q3; action play and collectible business up 5% in Q3.
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Latin America Sales: $22.6 million in Q3, up 48% year-over-year.
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European Sales: Down 3.8% in Q3.
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Asia Pacific Sales: Down 3.4% in Q3.
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Canada Sales: Down over $4 million in Q3.
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Costume Business: Up 7% outside the US in Q3.
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Selling Expense: $7.6 million in Q3, down from $10.7 million last year.
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G&A Spending: $33.1 million in Q3, down 2% from last year.
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Interest Expense: $938,000 year-to-date, a reduction of $4.8 million versus last year.
Release Date: October 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Jakks Pacific Inc (NASDAQ:JAKK) reported year-over-year sales increases across all three toy consumer product divisions in Q3 2024.
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The company remains debt-free, providing financial strength and flexibility for future initiatives.
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International markets, particularly Latin America, showed significant growth with a 48% increase in Q3 sales compared to the prior year.
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Jakks Pacific Inc (NASDAQ:JAKK) has successfully expanded its retail presence with exclusive products and additional shelf space globally.
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The company maintains a strong focus on accessible price points, with over half of its sales volume driven by products priced at $30 or less.
Negative Points
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The action play and collectible business was down 9% year-to-date, partly due to timing issues with movie releases.
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The European and Asia Pacific regions experienced sales declines of 3.8% and 3.4% respectively in Q3.
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Retailers are actively destocking, leading to soft sell-through across the industry, although Jakks Pacific Inc (NASDAQ:JAKK) is performing better than most.
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Creditworthiness of some retailers remains a concern, with a 1% year-over-year sales decline attributed to deteriorating credit situations.
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The company faces challenges in maintaining or expanding margins due to consistent fixed cost increases without scale leverage.
Q & A Highlights
Q: Can you discuss the opportunities in the outdoor segment, particularly with the Authentic Brands Group? A: Stephen G Berman, CEO: We recently launched the Element portion of our initiative with the Authentic Brands Group at Academy, and the initial sell-throughs have been tremendous. We plan to expand the product range in spring with Element Skateboards and Roxy Floaties. Our existing seasonal products like ball pits and outdoor furniture are seeing better comparisons, and we expect growth in 2025. The segment is diverse, including brands like Quicksilver, Roxy, and Juicy Couture, and licenses with Mattel and Spinmaster.