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New Product Launch & Expansion Efforts Aid JAKKS Pacific (JAKK)

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JAKKS Pacific, Inc. (JAKK - Free Report) will likely benefit from retail expansion, product launch and brand collaborations. Also, the emphasis on licensing partnerships and international footprint bodes well.

The Zacks Rank #1 (Strong Buy) company’s shares have declined 12.2% in the past year against the industry’s growth of 6.7%. Although the stock has underperformed the industry, its solid international footprint, focus on innovation and collaborations with popular brands and movie franchisees are likely to drive the performance.

Earnings estimates for 2024 have increased to $4.58 per share from $4.41 in the past 60 days, depicting analysts’ optimism over the stock's growth potential.   

Zacks Investment Research
Image Source: Zacks Investment Research

Let’s discuss the major driving factors.

Boosting Retail Presence: JAKKS Pacific focuses on expanding its reach to include prominent accounts such as Macy's and Amazon in the United States and Sainsbury's in the U.K. During the first-quarter 2024 earnings call, the company stated progress on working with ABG, including some iconic assortments of their properties comprising Element, Quiksilver, Roxy, Billabong, Volcom, Forever 21, Juicy Couture, Sports Illustrated and Prince. JAKKS Pacific is optimistic about its top-tier new designs for Element, Volcom, and Billabong and Quiksilver skateboards, which will be at specialty and mass retailers in-store and online in 2024.

For 2025, the company will venture into branded roller skates, inline skates, volleyball, outdoor furniture, and an extensive line of dolls and doll accessories infused with fashion elements from Forever 21, Prince, Sports Illustrated, Roxy and Billabong.

Improving Product Offerings: The company is keen on enhancing its product offerings through innovations and brand collaborations, resulting in a diverse product portfolio. During first-quarter 2024, the company garnered notable responses regarding the launch of three new pieces of entertainment in the world of Sonic the Hedgehog.

For 2024, JAKKS Pacific also announced a new agreement with SEGA in support of the Sonic Hedgehog 3 Paramount Pictures feature film, scheduled for release on Dec 20, 2024. The company planned to introduce an innovative range of products for Sonic fans, including figures, plush items, play sets, costumes and more.

Regarding content, the company is optimistic regarding Disney's announcement of Moana 2, slated for the upcoming holiday season release. A new line of products inspired by Moana 2 will be available on shelves in fourth-quarter 2024.

Focus on Licensing Partnerships: The company collaborates with renowned licensing partners, including The Walt Disney Company, Marvel, Pixar, DC Comics, Warner Bros., NBC Universal, and others. Notably, JAKKS Pacific has secured rights for Hasbro in both North America and the United States, as well as LEGO and Minecraft.

On Apr 08, 2024, JAKK announced collaboration with Epic Story Media to unveil an extensive content and licensing initiative centered around the new intellectual property, Wild Manes. JAKKS Pacific's outlook for 2024 and beyond is promising. JAKKS Pacific is gearing up to introduce a comprehensive line of outdoor products, including chairs, umbrellas, canopies, beach accessories, inflatable pool floats, sand and splash mats, foldable wagons and extensive lines of dolls and doll accessories.

The company's strategic expansion into new categories and acquisition of licenses aim to enhance its products, resulting in thriving, evergreen businesses. To further capitalize on this success, JAKKS Pacific is broadening its distribution channels.

Strong International Footprint: JAKKS Pacific is committed to diversifying its footprint outside the United States. 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. In 2024, the company expects to go deeper into the largest global markets with its toy kids consumer products and costume businesses.

Other Stocks to Consider

Some other top-ranked stocks in the Zacks Consumer Discretionary sector are:

Strategic Education, Inc. (STRA - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

STRA has a trailing four-quarter earnings surprise of 36.2%, on average. The stock has surged 42.7% in the past year. The Zacks Consensus Estimate for STRA’s 2024 sales and earnings per share (EPS) indicates an increase of 6.4% and 33.3%, respectively, from the year-ago levels.

Royal Caribbean Cruises Ltd. (RCL - Free Report) currently sports a Zacks Rank of 1. RCL has a trailing four-quarter earnings surprise of 18.3%, on average. The stock has rallied 81.6% in the past year.

The Zacks Consensus Estimate for RCL’s 2024 sales and EPS calls for growth of 16.6% and 61.9%, respectively, from the year-ago levels.

Hasbro, Inc. (HAS - Free Report) presently flaunts a Zacks Rank of 1. The company has a trailing four-quarter earnings surprise of 17.5%, on average. The stock has gained 15.3% in the year-to-date period.

The Zacks Consensus Estimate for HAS’ 2025 sales and EPS suggests an improvement of 4% and 14%, respectively, from the year-ago levels.

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