JAKKS Pacific (JAKK) Up A Quarter on Earnings Beat

Joel Anderson |

Shares in multi-brand toy company JAKKS Pacific (JAKK) spiked on Wednesday after the company released its Q3 earnings before the opening bell. Reduced expenses drove profits ahead of expectations, and the earnings beat resulted in a more-than 25 percent spike in the company’s stock.

Earnings Beat Expectations

JAKKS cruised to a net income of $36.6 million, or $1.11 per share, ahead of FactSet consensus estimates of $1.05 a share. Revenue edged down 1 percent year-over-year from $314.5 million to $310.9 million, but still managed to beat analyst expectations of $297.9 million. The company also reiterated guidance that anticipates a loss of $2.56 per share on the year on revenue of $620 million, though analyst expectations average out to a loss of $2.63 per share on revenue of $613.7 million.

CEO Cites Disney Dolls, Halloween Costumes as Reason for Earnings Beat

President and CEO Stephen Berman commented that it was Disney lines of toys and seasonal buying that were driving the company’s profits, stating:

We are pleased with our third quarter results and believe we're on track to achieving our full year 2013 guidance. Highlights of our third quarter sales include Disney Princess dolls, dress-up and role play, Sofia the First dress-up and role play items, 31-inch Giant Action Figures, Disguise Halloween costumes, Black & Decker boy role play and our Pre-School Ride On and activity cables. These are great examples of our core Evergreen brands and categories that are the foundation of our business. We recently completed our Fall Toy preview meetings and are excited about the enthusiastic response from retailers, license owners and other industry partners to our 2014 product line including our DreamPlay Toys and products and technologies. …

We, along with our retailers, are focused on managing risks on new product launches, but for JAKKS, we believe with our strong basic categories, where we are leaders in and are a major competitor, we have an extremely strong core business now and going forward. It is a challenging retail environment but with our previously announced restructuring, our strong basic core business, our DreamPlay and technology initiatives, we believe we will lay groundwork for a more profitable 2014 and beyond. Looking ahead to 2014, we are optimistic about future opportunities including the launch of our licensed and non-licensed DreamPlay and technology kid products and the solid performance of our core category business lines which spans a wide spectrum that includes Action Figures, Dolls, Dress-up and Role Play, Halloween costumes from Disguise, kids furniture and seasonal products from Kids Only!, infant and pre-school products from Tollytots, ride-on vehicles and wagons from Moose Mountain and outdoor and junior sports products and Impulse Toys from Maui toys. In addition, we have an aggressive international plan of expansion and growth going forward in 2014 and beyond.

Hasboro (HAS) Also Ahead of Expectations

JAKKS earnings beat comes on the heels of Monday’s earnings call from competitor Hasboro that showed them ahead of expectations as well. The company’s adjusted earnings per share of $1.31 was ahead of Zacks Consensus estimates of $1.27 a share, helping the company’s stock rise almost 6.5 percent since Friday’s close.

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Symbol Name Price Change % Volume
HAS Hasbro Inc. 83.15 -0.73 -0.87 813,453
JAKK JAKKS Pacific Inc. 6.80 -0.05 -0.73 221,208
RBISF Rubis SCA Pfd Sub Rt 06/04/2015 n/a n/a n/a 0


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