JAKKS Pacific, Inc. ( JAKK Quick Quote JAKK - Free Report) is riding on strategic acquisitions, solid international footprint, and focus on digital innovation and collaborations with popular brands and movie franchisees. Additionally, JAKKS Pacific is connecting with customers through digital videos, display banners and social ads, which should improve customer experience. So far this year, shares of JAKKS Pacific have gained 160.5% against the Zacks Toys - Games - Hobbies industry’s 8.5% fall. The outperformance can primarily be attributable to solid earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters. Earnings estimates for 2021 have moved significantly up to 17 cents per share from the estimated loss of 16 cents per share, over the past 30 days. This positive trend signifies bullish analysts’ sentiments and justifies the company’s Zacks Rank #2 (Buy), indicating robust fundamentals and the expectation of outperformance in the near term. You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here Major Growth Drivers Inorganic Drives & Joint Ventures Boosting Growth: JAKKS Pacific depends largely on acquisition of assets and businesses for growth. The company’s ability to successfully close the acquisitions lends it a competitive advantage over others. JAKKS Pacific has collaborations with Disney, Skechers, Nickelodeon, Cabbage Patch Kids and Chico to manufacture toys and merchandise related to these brands. During the second quarter of 2021, the company extended its contract partnership with BLACK+DECKER. JAKKS Pacific’s current BLACK+DECKER branded toy product lines comprise Tool Belt Set, Electric Power Drill, Power Tool Workshop, and BLACK+DECKER home items like Coffee Maker, Toaster, Mixer and Oven. Also, it witnessed double-digit growth sales in many areas like Nintendo, the Black & Decker in the same period. In the girls and preschool targeted businesses, primarily dolls, dress-up, role play toys, plush and other consumer products, net sales rose 50% year over year to $49.3 million. This was primarily driven by strong sales of Disney Princess and Raya merchandise. The company intends to launch the Encanto product line under the girl’s division, comprising fashion dolls, large dolls, playsets, dress-up and role play. The pipeline also includes extension of its Perfectly Cute doll and accessory line at Target, new launch of toys and collectibles based on Haribo (a global gummy candy brand). Under the boy’s division, it intends to work on the Black and Decker product line along with the re-release of Creepy Crawlers. JAKKS Pacific believes that core, basic products, popular entertainment licenses with proven play patterns will drive growth in 2021. Image Source: Zacks Investment Research Digital Innovation Bodes Well: JAKKS Pacific has regularly brought about changes in its products to keep up with the changing play patterns of children. Recently, the demand for physical toys has been declining due to younger children’s preference for digital games and other electronic learning tools. Consistent with this trend, the company has introduced a number of mobile gaming apps and digital games along with physical toys, which should help the company cash in on the demand for smartphone gaming. The company is also connecting with customers through digital videos, display banners and social ads, which should improve customer experience. It realizes the importance of online retailing and shifted considerable focus to aggressively boosting online sales. During second-quarter 2021, the company’s gross shipment was driven by the continuation of robust POS for Disney Princess brand, which grew 30% year over year. Robust Cross-Border Footprints: JAKKS Pacific — which shares space with Electronic Arts Inc. ( EA Quick Quote EA - Free Report) , Hasbro, Inc. ( HAS Quick Quote HAS - Free Report) and Mattel, Inc. ( MAT Quick Quote MAT - Free Report) — is very committed to expanding its footprint outside the domestic boundaries. Consistent with its endeavors, the company has opened sales offices and expanded distribution agreements for its products. Its partnership with Meisheng is expected to result in robust growth in Asia. Meanwhile, after launching Tsum Tsum in key international markets like Latin America and Asia, the company plans to expand its distribution in new territories going forward. During second-quarter 2021, it witnessed solid international growth, especially in Europe. For second-quarter 2021, international sales of Toys/Consumer Products grew 45% globally to $81.5 million. The company’s international expansion is currently up 20% and it expects robust international orders for the rest of 2021. Focus on Licensing Partnerships: JAKKS Pacific’s licensing partners are responsible for some of the most popular intellectual properties in the world, including The Walt Disney Company, Marvel, Pixar, DC Comics, Warner Bros., NBC Universal and so many others. Also, the company has acquired Hasbro rights for North America as well as LEGO and Minecraft. The company’s new licenses include Apex Legends, Bendy and the Ink Machine, Blippi, Chucky, Ghostbusters, Hocus Pocus, Peppa the Pig, PJ Mask, Raya and the Last Dragon and Spirit. During second-quarter 2021, sales of Disguise increased Disguise costumes increased 37% year over year. This can majorly be attributed to new license acquisitions. With Disguise costume segment along with retail partners, the company is expecting strong demand for Halloween 2021.