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JAKKS Pacific (JAKK) Q1 Loss Wider than Expected, Stock Down
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Shares of JAKKS Pacific, Inc. (JAKK - Free Report) fell nearly 3% in yesterday’s trading session after the company reported a wider-than-expected loss in the first quarter of 2017. However, sales were better than expected in the quarter.
Quarter Discussion
This California-based company’s loss of $1.01 per share was flat when compared to the prior-year quarter figure but wider than the Zacks Consensus Estimate of a loss of 97 cents.
JAKKS Pacific, Inc. Price, Consensus and EPS Surprise
JAKKS Pacific’s revenues decreased 1.2% year over year to $94.5 million but exceeded the Zacks Consensus Estimate of $90 million by over 5%.
Behind the Headline Numbers
Gross margin in the quarter was 31.8%, down 70 basis points (bps) year over year, due to pricing pressure on Funnoodle pool toys and higher tooling amortization on increased capital expenditures in 2016, partially offset by lower royalties resulting from a shift in product mix.
Adjusted EBITDA (earnings before interest, taxes and amortization) was a negative $10.6 million compared with the year-ago quarter’s figure of a negative $9.2 million.
2017 View
For 2017, JAKKS Pacific continues to expect higher net income, earnings per share and adjusted EBITDA on lower net sales compared to 2016. Moreover, the company anticipates enhanced profitability in 2017 given continual focus on building its base of evergreen brands and categories as well as entering new categories, creating a strong portfolio of new and existing licenses, and developing owned IP and content.
Performance of Other Toymakers
Among other toymakers, Hasbro Inc. (HAS - Free Report) reported better-than-expected first-quarter 2017 results, while Mattel Inc. (MAT - Free Report) posted lower-than-expected results for the quarter.
Zacks Rank
JAKKS Pacific currently carries a Zacks Rank #4 (Sell).
The Zacks Consensus Estimate for Nintendo’s fiscal 2017 earnings moved up 1.4% over the last 60 days. Meanwhile, for fiscal 2017, EPS is expected to skyrocket 364.4%.
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JAKKS Pacific (JAKK) Q1 Loss Wider than Expected, Stock Down
Shares of JAKKS Pacific, Inc. (JAKK - Free Report) fell nearly 3% in yesterday’s trading session after the company reported a wider-than-expected loss in the first quarter of 2017. However, sales were better than expected in the quarter.
Quarter Discussion
This California-based company’s loss of $1.01 per share was flat when compared to the prior-year quarter figure but wider than the Zacks Consensus Estimate of a loss of 97 cents.
JAKKS Pacific, Inc. Price, Consensus and EPS Surprise
JAKKS Pacific, Inc. Price, Consensus and EPS Surprise | JAKKS Pacific, Inc. Quote
JAKKS Pacific’s revenues decreased 1.2% year over year to $94.5 million but exceeded the Zacks Consensus Estimate of $90 million by over 5%.
Behind the Headline Numbers
Gross margin in the quarter was 31.8%, down 70 basis points (bps) year over year, due to pricing pressure on Funnoodle pool toys and higher tooling amortization on increased capital expenditures in 2016, partially offset by lower royalties resulting from a shift in product mix.
Adjusted EBITDA (earnings before interest, taxes and amortization) was a negative $10.6 million compared with the year-ago quarter’s figure of a negative $9.2 million.
2017 View
For 2017, JAKKS Pacific continues to expect higher net income, earnings per share and adjusted EBITDA on lower net sales compared to 2016. Moreover, the company anticipates enhanced profitability in 2017 given continual focus on building its base of evergreen brands and categories as well as entering new categories, creating a strong portfolio of new and existing licenses, and developing owned IP and content.
Performance of Other Toymakers
Among other toymakers, Hasbro Inc. (HAS - Free Report) reported better-than-expected first-quarter 2017 results, while Mattel Inc. (MAT - Free Report) posted lower-than-expected results for the quarter.
Zacks Rank
JAKKS Pacific currently carries a Zacks Rank #4 (Sell).
A better-ranked stock in the same sector is Nintendo Co., Ltd. (NTDOY - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Nintendo’s fiscal 2017 earnings moved up 1.4% over the last 60 days. Meanwhile, for fiscal 2017, EPS is expected to skyrocket 364.4%.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>