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JAKKS Pacific's (JAKK) Stock Surges on Q2 Earnings Beat
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JAKKS Pacific, Inc. (JAKK - Free Report) reported impressive second-quarter 2022 results, with both earnings and revenues surpassing the Zacks Consensus Estimate. The metrics increased on a year-over-year basis.
Following the results, the company’s shares surged 34.7% during the after-hours trading session on July 27. During the quarter, the company benefited from robust demand for its products. The company continues to witness strong demand for its major toy businesses, especially Disney’s Encanto and Sega’s Sonic the Hedgehog. Despite supply chain headwind, the company reported its first profitable second quarter in ten years.
Stephen Berman, chairman and CEO of JAKKS Pacific, stated, “We’re excited to continue to delight our consumers with a tremendous offering across our toy, consumer product and Halloween ranges, both on-shelf and on-line, and in the US and internationally.”
Q2 Earnings and Revenues
During the second quarter, the company reported adjusted earnings of $1.98 per share against the Zacks Consensus Estimate of a loss of 73 cents. In the prior-year quarter, the company had reported an adjusted loss of 44 cents per share.
Quarterly revenues of $220.4 million surpassed the consensus mark of $145 million by 52.1%. The top line increased 96.2% on a year-over-year basis. The company’s results benefited from a sharp increase in shipments. During the first half of 2022, the company’s shipments crossed $300 million for the first time in the company’s history.
Net sales in the company’s Toys/Consumer Products segment increased 82.6% globally on a year-over-year basis, while sales in the Costumes segment increased 132.2% year over year. Sales from Action Play and Dolls business increased 89.4% and 107.4%, respectively, on a year-over-year basis.
JAKKS Pacific, Inc. Price, Consensus and EPS Surprise
In the reported quarter, gross margin came in at 27.6%, down 77 basis points (bps) from the prior-year quarter. The downside was mainly caused by a rise in inbound freight expenses. Adjusted EBITDA came in at $27.1 million during the quarter compared with $5 million reported in the prior-year quarter.
Balance Sheet
As of Jun 30, 2022, the company’s cash and cash equivalents (including restricted cash) came in at $62.3 million compared with $38.3 million as of Jun 30, 2021. Debt, non-current portion, net as of Jun 30, 2022, was $82.5 million compared with $95.7 million as of Jun 30, 2021.
Zacks Rank & Key Picks
JAKKS Pacific currently has a Zacks Rank #4 (sell)
Some better-ranked stocks in the Consumer Discretionary sector are G-III Apparel Group, Ltd. (GIII - Free Report) , MGM Resorts International (MGM - Free Report) and Bluegreen Vacations Holding Corporation .
The Zacks Consensus Estimate for GIII’s current financial year sales and EPS indicates growth of 13.8% and 8.2%, respectively, from the year-ago period’s reported levels.
MGM Resorts carries a Zacks Rank #2 (Buy). MGM has a trailing four-quarter earnings surprise of 212.5%, on average. Shares of the company have declined 22% in the past year.
The Zacks Consensus Estimate for MGM’s current financial year sales and EPS suggests growth of 27.6% and 240.3%, respectively, from the year-ago period’s reported levels.
Bluegreen Vacations carries a Zacks Rank #2. BVH has a trailing four-quarter earnings surprise of 85.9%, on average. The stock has increased 44.3% in the past year.
The Zacks Consensus Estimate for BVH’s current financial year sales and EPS indicates growth of 11.2% and 35.1%, respectively, from the year-ago period’s reported levels.
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JAKKS Pacific's (JAKK) Stock Surges on Q2 Earnings Beat
JAKKS Pacific, Inc. (JAKK - Free Report) reported impressive second-quarter 2022 results, with both earnings and revenues surpassing the Zacks Consensus Estimate. The metrics increased on a year-over-year basis.
Following the results, the company’s shares surged 34.7% during the after-hours trading session on July 27. During the quarter, the company benefited from robust demand for its products. The company continues to witness strong demand for its major toy businesses, especially Disney’s Encanto and Sega’s Sonic the Hedgehog. Despite supply chain headwind, the company reported its first profitable second quarter in ten years.
Stephen Berman, chairman and CEO of JAKKS Pacific, stated, “We’re excited to continue to delight our consumers with a tremendous offering across our toy, consumer product and Halloween ranges, both on-shelf and on-line, and in the US and internationally.”
Q2 Earnings and Revenues
During the second quarter, the company reported adjusted earnings of $1.98 per share against the Zacks Consensus Estimate of a loss of 73 cents. In the prior-year quarter, the company had reported an adjusted loss of 44 cents per share.
Quarterly revenues of $220.4 million surpassed the consensus mark of $145 million by 52.1%. The top line increased 96.2% on a year-over-year basis. The company’s results benefited from a sharp increase in shipments. During the first half of 2022, the company’s shipments crossed $300 million for the first time in the company’s history.
Net sales in the company’s Toys/Consumer Products segment increased 82.6% globally on a year-over-year basis, while sales in the Costumes segment increased 132.2% year over year. Sales from Action Play and Dolls business increased 89.4% and 107.4%, respectively, on a year-over-year basis.
JAKKS Pacific, Inc. Price, Consensus and EPS Surprise
JAKKS Pacific, Inc. price-consensus-eps-surprise-chart | JAKKS Pacific, Inc. Quote
Operating Highlights
In the reported quarter, gross margin came in at 27.6%, down 77 basis points (bps) from the prior-year quarter. The downside was mainly caused by a rise in inbound freight expenses. Adjusted EBITDA came in at $27.1 million during the quarter compared with $5 million reported in the prior-year quarter.
Balance Sheet
As of Jun 30, 2022, the company’s cash and cash equivalents (including restricted cash) came in at $62.3 million compared with $38.3 million as of Jun 30, 2021. Debt, non-current portion, net as of Jun 30, 2022, was $82.5 million compared with $95.7 million as of Jun 30, 2021.
Zacks Rank & Key Picks
JAKKS Pacific currently has a Zacks Rank #4 (sell)
Some better-ranked stocks in the Consumer Discretionary sector are G-III Apparel Group, Ltd. (GIII - Free Report) , MGM Resorts International (MGM - Free Report) and Bluegreen Vacations Holding Corporation .
G-III Apparel sports a Zacks Rank #1 (Strong Buy). GIII has a trailing four-quarter earnings surprise of 97.5%, on average. The stock has declined 27.1% in the past year. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for GIII’s current financial year sales and EPS indicates growth of 13.8% and 8.2%, respectively, from the year-ago period’s reported levels.
MGM Resorts carries a Zacks Rank #2 (Buy). MGM has a trailing four-quarter earnings surprise of 212.5%, on average. Shares of the company have declined 22% in the past year.
The Zacks Consensus Estimate for MGM’s current financial year sales and EPS suggests growth of 27.6% and 240.3%, respectively, from the year-ago period’s reported levels.
Bluegreen Vacations carries a Zacks Rank #2. BVH has a trailing four-quarter earnings surprise of 85.9%, on average. The stock has increased 44.3% in the past year.
The Zacks Consensus Estimate for BVH’s current financial year sales and EPS indicates growth of 11.2% and 35.1%, respectively, from the year-ago period’s reported levels.