After close of trading on 31 July, Jakks Pacific reported financial results for the second quarter ended June 30, 2024.
First-half net sales for Jakks Pacific were USD 238.7 million – a year-on-year decrease of 13.0%. This was primarily due to a lack of new content-related product launches, which occurred in the first half of last year.
Second Quarter 2024 Overview
Net sales were USD 148.6 million, a year-over-year decrease of 11.0%. Toys/consumer products net sales were USD 104.6 million, a year-over-year decrease of 11.3%. Costumes net sales were USD 44.0 million, a year-over-year decrease of 10.1%. Gross profit was USD 47.6 million, a year-over-year decrease of 7.1% from USD 51.2 million in 2023. Operating income was USD 7.6 million (5.1% of net sales) vs. USD 16.4 million (9.9% of net sales) in Q2 2023.
Interestingly, gross margin was 32.0%, up 130 basis points over Q2 2023, suggesting cost-cutting measures (or price increases) had been applied in a difficult economic climate.
On the plus side, the dolls, role-play/dress-up division generated net sales of USD 63.6 million, up 6.6% over last year. Against that, the action play & collectibles division generated net sales of USD 36.6 million, down over 30% from last year.
Overall, in the first half year, North America was down 8%, attributable to the impact of lower contribution from product lines launched in support of new entertainment content and lower costume sales. Internationally, it was down 31%, primarily due to orders slipping into the following quarter due to logistics-related issues but also negatively impacted by the content slate comparison with the previous year.
Stephen Berman, CEO of Jakks Pacific, said: “The first half of 2024 closes with our delivering solid results anchored by our evergreen business of time-tested toy categories and play patterns. A lack of new content releases created unfavourable topline comparisons with prior year, but our base business continued to perform and adapt in an ever-changing marketplace.
“The first half of 2024 closes with our delivering solid results anchored by our evergreen business of time-tested toy categories and play patterns. A lack of new content releases created unfavourable topline comparisons with prior year, but our base business continued to perform and adapt in an ever-changing marketplace”
Berman continued: “We are pleased with our progress to date and our positioning and preparation for the new product we’re shipping in the latter half of the year. Exciting new launches supporting Moana 2, releasing in theatres this November, and Sonic the Hedgehog 3, releasing in theatres this December will be the cornerstones of the broad retail support we have secured with our top customers globally. We are also in the middle of the exciting initial launch of our new line of products inspired by “The Simpsons,” the launch of our Authentic Brands Group business as well as several other new IP and category extensions.”
As for the balance sheet, Jakks’ cash and cash equivalents (including restricted cash) totalled USD 17.9 million as of June 30, 2024, down from USD 32.4 million as of June 30, 2023, and USD 72.6 million as of December 31, 2023.
