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JAKKS Pacific (JAKK) Reports Wider-Than-Expected Q1 Loss

Zacks Equity Research

JAKKS Pacific, Inc. JAKK incurred adjusted loss of 98 cents per share in first-quarter 2019, wider than the Zacks Consensus Estimate of loss of 56 cents. The company incurred loss of 85 cents per share in the prior-year quarter.

Net sales totaled $70.8 million, which lagged the Zacks Consensus Estimate by 10%. The top line also fell 23.8% on a year-over-year basis. The company expects sales to grow by nearly 5% in 2019.

Following the quarterly results, shares of the company decreased 2.9% in after-hours trading on May 9. Notably, the challenging industry scenario for traditional toymakers hurt JAKKS Pacific’s first-quarter results. The Toys ‘R’ Us liquidation was another reason behind its disappointing performance in the quarter under review.

JAKKS Pacific, Inc. Price, Consensus and EPS Surprise

 

JAKKS Pacific, Inc. Price, Consensus and EPS Surprise

JAKKS Pacific, Inc. price-consensus-eps-surprise-chart | JAKKS Pacific, Inc. Quote

Operating Highlights

In the reported quarter, gross margin was 20.2%, down 450 basis points (bps) from the prior-year quarter. Adjusted EBITDA was a negative $17.1 million compared with a negative $14.6 million in the prior-year quarter.

Balance Sheet

As of Mar 31, 2019, cash and cash equivalents amounted to $42.4 million compared with $53.3 million as of Dec 31, 2018. Inventory decreased to $44.7 million from $53.9 million at the end of Dec 31, 2018. Long-term debt, as of Mar 31, 2019, totaled $142.4 million, up from $139.8 million at the end of 2018.

Zacks Rank & Other Stocks to Consider

JAKKS Pacific currently carries a Zacks Rank #2 (Buy). Some other top-ranked stocks in the industry are Electronic Arts EA, Hasbro HAS and Glu Mobile GLUU. While Electronic Arts currently sports a Zacks Rank #1 (Strong Buy), Hasbro and Glu Mobile carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Electronic Arts, Hasbro and Glu Mobile’s long-term EPS is projected to increase 16.5%, 10.7% and 15%, respectively.

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