Net Sales Up Slightly at JAKKS Pacific in Q4 2016

SANTA MONICA: JAKKS Pacific’s financial results for the fourth quarter of 2016, which ended on December 31, saw net sales rise to $167 million from $163.4 million in Q4 2015.

Gross margin was 31.2 percent, up from 30.3 percent in the same period last year. Operating margin was down 1.4 percent, an improvement from the previous 4.2 percent loss. Net loss attributable to JAKKS Pacific was $7.6 million, as compared to $9.3 million in the same year-ago quarter. Adjusted EBITDA was $4 million, an increase from negative $2.1 million in Q4 2015.

For 2017, JAKKS Pacific expects higher net income, earnings per share and adjusted EBITDA on lower net sales compared to last year. The company also anticipates improved profitability with a continued focus on building its base of evergreen brands and categories as well as entering new categories, creating a strong portfolio of new and existing licenses, and developing owned IP and content.

Stephen Berman, the company’s chairman and CEO, commented: “As we indicated in December, several of our key licensed products, including some tied to motion pictures, experienced surprising sales weakness in December, resulting in sales that were only modestly higher than a year ago. Despite the shortfall from our original guidance, we were able to make progress on several of our strategic goals, including growing some of our core segments, broadening our owned IP both internally and with newly acquired property, expanding our geographic footprint, and building up our online sales channel.

“In 2017, we will continue to focus on efforts to transform JAKKS Pacific from a multinational toy maker to a global provider of consumer products for kids. We expect our core business to benefit from the launch of new entertainment- licensed product lines inspired by Marvel’s Guardians of the Galaxy, Disney’s Beauty and the Beast live action, LEGO Batman, DC Superhero Girls, Power Rangers, Minecraft and Nintendo. In terms of our owned IP, we expect another solid year for Gift ‘Ems and anticipate that the Chocolate Egg Surprise Maker, Real Workin’ Buddies Dusty and Mighty Runner brands will be well received by consumers. And, we will focus on supporting our owned IP with content created by Studio JP.”