JAKKS Pacific (JAKK) Q2 Earnings Beat Estimates, Stock Up
JAKKS Pacific, Inc. JAKK reported second-quarter 2023 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Revenues surpassed the consensus estimate for the seventh straight quarter. However, both the metrics declined on a year-over-year basis.
Following the announcement shares of the company increased 7.2% during the after-hours trading session on Jul 27. Positive investor sentiments were witnessed as the company enhanced its financial flexibility by retiring the balance of its long-term debt ahead of its scheduled maturity. Given the high interest rate environment, the initiative paves the path for future bottom-line improvements (by eliminating interest burden) and access to cheaper financing (as and when required).
Q2 Earnings and Revenues
During the quarter, the company reported an adjusted earnings per share (EPS) of $1.26, beating the Zacks Consensus Estimate of 47 cents. In the prior-year quarter, JAKK reported an adjusted EPS of $2.10.
JAKKS Pacific, Inc. Price, Consensus and EPS Surprise
JAKKS Pacific, Inc. price-consensus-eps-surprise-chart | JAKKS Pacific, Inc. Quote
Quarterly revenues of $166.9 million surpassed the consensus mark of $154 million by 8.1%. However, the top line declined 24.3% on a year-over-year basis. During the quarter, the company reported solid contributions from Action Play & Collectibles business.
During the quarter, net sales in Toys/Consumer Products segment declined 20.8% year over year to $117.9 million. Our estimate for the segment sales was $125.6 million. Costumes net sales during the quarter fell 31.5% year over year to $49 million.
For the first six months (ended Jun 30,2023), sales in North America declined 24% year over year. However, the same for international increased 10% year over year.
Operating Highlights
In the reported quarter, gross margin came in at 30.7%, up 310 basis points from the prior-year quarter’s levels. Our estimate for gross margin was 27.7%.
Adjusted EBITDA during the quarter came in at $20.7 million compared with $27.1 million reported in the prior-year quarter.
Balance Sheet
As of Jun 30, the company’s cash and cash equivalents (including restricted cash) were $32.4 million compared with $38.3 million as of Mar 31, 2023.
During the quarter, the company retired debt of $30.2 million prior to its maturity.
Zacks Rank & Other Top Picks
JAKKS Pacific sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the Zacks Consumer Discretionary sector are as follows:
Trip.com Group Limited TCOM flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 147.9%, on average. Shares of TCOM have increased 43.7% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Trip.com Group’s 2023 sales and EPS suggest an increase of 101.6% and 531%, respectively, from the year-ago period’s levels.
Live Nation Entertainment, Inc. LYV flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 21%, on average. Shares of LYV have increased 3.1% in the past year.
The Zacks Consensus Estimate for Live Nation’s 2024 sales and EPS indicates a rise of 7.3% and 142.6%, respectively, from the year-ago period’s levels.
OneSpaWorld Holdings Limited OSW carries a Zacks Rank #2 (Buy). OSW has a trailing four-quarter earnings surprise of 65.8%, on average. Shares of OSW have increased 70.4% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates a rise of 34% and 89.3%, respectively, from the year-ago period’s levels.
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