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JAKKS Pacific (JAKK) Rises 13% in 6 Months: More Upside Left?
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JAKKS Pacific, Inc. (JAKK - Free Report) is poised to benefit from expansion efforts, licensing partnerships and digital efforts. Also, focus on new product launches has been driving sales in the last few quarters.
In the past six months, shares of JAKKS Pacific have gained 13.1% against the industry’s decline of 3.1%. The price performance was backed by a solid earnings surprise history. The company’s earnings surpassed the Zacks Consensus Estimate in all of the trailing four quarters. Earnings estimates for 2022 and 2023 have moved up 19.1% and 13.5%, respectively, in the past 30 days. This positive trend signifies bullish analysts’ sentiments and justifies the company’s Zacks Rank #1 (Strong 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 stocks here.
Image Source: Zacks Investment Research
Major Growth Drivers
Robust Cross-Border Footprints: JAKKS Pacific is committed to expanding its footprint outside the domestic boundaries. In sync with its strategy, the company opened sales offices and expanded distribution agreements for its products. Its partnership with Meisheng is expected to result in robust growth in Asia. 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. The expansion initiatives are likely to strengthen its international presence and customer base. The initiatives are expected to boost sales and profit margins as well as enable the company to attract licenses. During the third quarter, the company also made progress with respect to direct distribution in France, Spain, Italy and Mexico. The company is witnessing solid growth in Latin America and Europe.
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 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. The company made progress related to new licenses covering ball pits, the 10 environment, play environment, the outdoor furniture, the foot-to-floor ride-ons and trampoline businesses. The company announced the launch of licensed ReDo Skateboards in 2022. The company’s Disguise costume business is likely to perform well in 2022. Going forward, the company will add more offerings, from CoComelon to Squid Games, with Stranger Things and Sonic 2 movie costumes.
Digital Innovation Bodes Well: JAKKS Pacific has regularly brought about changes in its products to keep up with the changing play patterns of children. 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 introduced a number of mobile gaming apps and digital games along with physical toys, which should help the company cash in on 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 realized the importance of online retailing and shifted considerable focus to aggressively boost online sales. In the past few quarters, JAKKS Pacific has focused on creating digital experiences for online shoppers such as videos, 360-degree product images and enhanced web pages. It continues to modify its sales and logistics capabilities to capitalize on this continued shift to online. During fourth-quarter 2021, POS at the company’s top three U.S. customers rose 10%. The company is optimistic about its robust customer demand and is continuously making timely brand development and regular product innovation to drive margins.
Product Launches to Drive Growth: During third-quarter 2021, the company initiated a new doll program (in the United States) in association with Disney and Target. Branded as Disney ily 4EVER, the fashion line comprises 18 installs or related accessories inspired by Disney stories and caricatures. This includes the likes of Minnie Mouse, Tinkerbell, Stitch, Ariel, Elsa, Rapunzel and more. The company witnessed solid customer reactions in this regard. The new adult program in the United States at Target, branded Disney ILY 4EVER, did extremely well in fourth-quarter 2021, with the first five dolls introduced selling through 90% to 100% levels. It also recorded solid growth in Disney Princess, Nintendo and Sonic, with product lines comprising Super Mario Deluxe Bowser Airship and Sonic Giant-Eggman Robot Battle set.
Going forward, the company plans to launch the Encanto product line in the girls division that would comprise fashion dolls, large dolls, playsets, dress-up and role play. The pipeline also includes an 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). In the boys division, the company intends to work on the Black and Decker product line along with the re-release of Creepy Crawlers. JAKKS Pacific intends to launch Indoor Trampoline line along with PAW Patrol and Disney's Minnie Mouse SKU’s. The core, basic products, popular entertainment licenses with proven play patterns will drive growth in 2022. The company has undertaken universal brand development with franchises like Jurassic World, Minions, Child’s Play, Sony (including IP like Ghostbusters and Cobra Kai) as well as for Netflix’s Stranger Things, Ada Twist and Money Heist. These are likely to drive sales in the upcoming periods.
Other Key Picks
Some other better-ranked stocks in the Consumer Discretionary sector include Funko, Inc. (FNKO - Free Report) , Bluegreen Vacations Holding Corporation and Marriott International, Inc. (MAR - Free Report) .
Funko sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 96.2%, on average. Shares of the company have increased 1.7% in the past three months.
The Zacks Consensus Estimate for Funko’s current financial-year sales and earnings per share (EPS) suggests growth of 22.7% and 26.8%, respectively, from the year-ago period’s levels.
Bluegreen Vacations carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 425.1%, on average. Shares of the company have surged 63.6% in the past year.
The Zacks Consensus Estimate for Bluegreen Vacations’ current financial-year sales and EPS indicates growth of 8.3% and 20.8%, respectively, from the year-ago period’s levels.
Marriott carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 86.6%, on average. Shares of the company have gained 8.2% in the past year.
The Zacks Consensus Estimate for Marriott’s current financial-year sales and EPS indicates growth of 40.3% and 73%, respectively, from the year-ago period’s levels.
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JAKKS Pacific (JAKK) Rises 13% in 6 Months: More Upside Left?
JAKKS Pacific, Inc. (JAKK - Free Report) is poised to benefit from expansion efforts, licensing partnerships and digital efforts. Also, focus on new product launches has been driving sales in the last few quarters.
In the past six months, shares of JAKKS Pacific have gained 13.1% against the industry’s decline of 3.1%. The price performance was backed by a solid earnings surprise history. The company’s earnings surpassed the Zacks Consensus Estimate in all of the trailing four quarters. Earnings estimates for 2022 and 2023 have moved up 19.1% and 13.5%, respectively, in the past 30 days. This positive trend signifies bullish analysts’ sentiments and justifies the company’s Zacks Rank #1 (Strong 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 stocks here.
Image Source: Zacks Investment Research
Major Growth Drivers
Robust Cross-Border Footprints: JAKKS Pacific is committed to expanding its footprint outside the domestic boundaries. In sync with its strategy, the company opened sales offices and expanded distribution agreements for its products. Its partnership with Meisheng is expected to result in robust growth in Asia. 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. The expansion initiatives are likely to strengthen its international presence and customer base. The initiatives are expected to boost sales and profit margins as well as enable the company to attract licenses. During the third quarter, the company also made progress with respect to direct distribution in France, Spain, Italy and Mexico. The company is witnessing solid growth in Latin America and Europe.
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 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. The company made progress related to new licenses covering ball pits, the 10 environment, play environment, the outdoor furniture, the foot-to-floor ride-ons and trampoline businesses. The company announced the launch of licensed ReDo Skateboards in 2022. The company’s Disguise costume business is likely to perform well in 2022. Going forward, the company will add more offerings, from CoComelon to Squid Games, with Stranger Things and Sonic 2 movie costumes.
Digital Innovation Bodes Well: JAKKS Pacific has regularly brought about changes in its products to keep up with the changing play patterns of children. 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 introduced a number of mobile gaming apps and digital games along with physical toys, which should help the company cash in on 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 realized the importance of online retailing and shifted considerable focus to aggressively boost online sales. In the past few quarters, JAKKS Pacific has focused on creating digital experiences for online shoppers such as videos, 360-degree product images and enhanced web pages. It continues to modify its sales and logistics capabilities to capitalize on this continued shift to online. During fourth-quarter 2021, POS at the company’s top three U.S. customers rose 10%. The company is optimistic about its robust customer demand and is continuously making timely brand development and regular product innovation to drive margins.
Product Launches to Drive Growth: During third-quarter 2021, the company initiated a new doll program (in the United States) in association with Disney and Target. Branded as Disney ily 4EVER, the fashion line comprises 18 installs or related accessories inspired by Disney stories and caricatures. This includes the likes of Minnie Mouse, Tinkerbell, Stitch, Ariel, Elsa, Rapunzel and more. The company witnessed solid customer reactions in this regard. The new adult program in the United States at Target, branded Disney ILY 4EVER, did extremely well in fourth-quarter 2021, with the first five dolls introduced selling through 90% to 100% levels. It also recorded solid growth in Disney Princess, Nintendo and Sonic, with product lines comprising Super Mario Deluxe Bowser Airship and Sonic Giant-Eggman Robot Battle set.
Going forward, the company plans to launch the Encanto product line in the girls division that would comprise fashion dolls, large dolls, playsets, dress-up and role play. The pipeline also includes an 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). In the boys division, the company intends to work on the Black and Decker product line along with the re-release of Creepy Crawlers. JAKKS Pacific intends to launch Indoor Trampoline line along with PAW Patrol and Disney's Minnie Mouse SKU’s. The core, basic products, popular entertainment licenses with proven play patterns will drive growth in 2022. The company has undertaken universal brand development with franchises like Jurassic World, Minions, Child’s Play, Sony (including IP like Ghostbusters and Cobra Kai) as well as for Netflix’s Stranger Things, Ada Twist and Money Heist. These are likely to drive sales in the upcoming periods.
Other Key Picks
Some other better-ranked stocks in the Consumer Discretionary sector include Funko, Inc. (FNKO - Free Report) , Bluegreen Vacations Holding Corporation and Marriott International, Inc. (MAR - Free Report) .
Funko sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 96.2%, on average. Shares of the company have increased 1.7% in the past three months.
The Zacks Consensus Estimate for Funko’s current financial-year sales and earnings per share (EPS) suggests growth of 22.7% and 26.8%, respectively, from the year-ago period’s levels.
Bluegreen Vacations carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 425.1%, on average. Shares of the company have surged 63.6% in the past year.
The Zacks Consensus Estimate for Bluegreen Vacations’ current financial-year sales and EPS indicates growth of 8.3% and 20.8%, respectively, from the year-ago period’s levels.
Marriott carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 86.6%, on average. Shares of the company have gained 8.2% in the past year.
The Zacks Consensus Estimate for Marriott’s current financial-year sales and EPS indicates growth of 40.3% and 73%, respectively, from the year-ago period’s levels.