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JAKKS Pacific (JAKK) Q1 Loss Wider Than Expected, Margin Down

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JAKKS Pacific, Inc.’s (JAKK - Free Report) adjusted loss of 88 cents per share was wider than the Zacks Consensus Estimate of a loss of 60 cents but narrower than the year-ago quarter’s loss of $1.01.

Net sales in the first quarter totaled $93 million, surpassing the consensus mark of $87.7 million by 6%. However, the top line fell 1.4% year over year.

Notably, the company’s shares have lost 53.1% in the past year, underperforming the industry’s rally of 15.6%.

The challenging industry scenario for traditional toymakers have affected JAKKS Pacific’s results.

Tighter retail inventory management and the recent Toys ‘R’ Us bankruptcy filing added to woes.

Operating Highlights

Gross margin in the first quarter was 24.7%, down 710 basis points (bps) from the prior-year quarter. Gross margin was negatively impacted by anticipated contractual royalty shortfalls related to the recently announced liquidation of Toys R Us and higher royalties resulting from a shift in product mix.

Adjusted EBITDA was negative $14.6 million compared with negative $10.6 million in the prior-year quarter.



JAKKS Pacific, Inc. Price, Consensus and EPS Surprise

 

 

Balance Sheet

As of Mar 31, 2018, cash and cash equivalents were $46.8 million, compared with $65 million as of Dec 31, 2017. Inventory declined 7.6% year over year to $54 million in 2017.

Long-term debt as on Mar 31, 2018, totaled $134.7 million, up from $133.5 million at the end of 2017.

JAKKS Pacific, which shares space with Glu Mobile Inc. , Hasbro Inc. (HAS - Free Report) and Activision Blizzard, Inc. carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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