JAKKS Pacific, Inc. (NASDAQ:JAKK) Q1 2024 Earnings Call Transcript

JAKKS Pacific, Inc. (NASDAQ:JAKK) Q1 2024 Earnings Call Transcript April 24, 2024

JAKKS Pacific, Inc. misses on earnings expectations. Reported EPS is $-1.09 EPS, expectations were $-0.32. JAKK  isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good afternoon, everyone. Welcome to the JAKKS Pacific’s First Quarter 2024 Earnings Conference Call with management, who will review Financial Results for the quarter ended March 31, 2024. JAKKS issued its earnings press release earlier today. The earnings release and presentation slides related to today’s call are available on the company’s recently remodeled website in the Investor Section. On the call this afternoon are, Stephen Berman, Chairman and Chief Executive Officer; and John Kimble, Chief Financial Officer. Stephen will first provide an overview of the quarter along with highlights of recent performance and current business trends. Then John will provide some additional editorial around JAKKS Pacific’s financial and operational results.

Mr. Berman will then return with additional comments and some closing remarks prior to opening up the call for questions. If you would like to submit a question, e-mail it to investors@jakks.net. Before we begin, the company would like to point out that any comments made about JAKKS Pacific’s future performance, events or circumstances, including the estimates of sales, margins and/or adjusted EBITDA in 2024, as well as any other forward-looking statements concerning 2024 and beyond are subject to Safe Harbor protection under federal securities laws. These statements reflect the company’s best judgment based on current market trends and conditions today and are subject to certain risk uncertainties, which would cause actual results to differ materially from those projected in forward-looking statements.

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For details concerning these and other such risk uncertainties, you should consult JAKKS’ most recent 10-K and 10-Q filings with the SEC, as well as the company’s other reports subsequently filed with the SEC from time to time. In addition, today’s comments by management will refer to non-GAAP financial measures, such as adjusted EBITDA and adjusted earnings per share. Unless stated otherwise, the most directly comparable GAAP financial metric has been reconciled to the associated non-GAAP financial measure within the company’s earnings press release issued today or previously. As a reminder, this conference is being recorded. With that, I would now like to turn the call over to Stephen Berman.

Stephen Berman: Good afternoon and thank you for joining us today. With our strong conviction, we are delighted with our current state of the business here at JAKKS. First, paying off our expensive and long-term debt last summer, and now retiring all the outstanding preferred shares. Our balance sheet has never been healthier. On the commercial side, I've personally been to Europe already twice this year, meeting with customers and licensors who are engaged about our renewed focus on those markets and excited to share their ideas to accelerate our growth there. And as we speak, we've had customers enter our showrooms for the last month, enthused about the current state of our portfolio and some of the new ideas we are chasing for 2025.

With that said, as our long-term investors know, first quarter is always our lowest shipping quarter. Retailers are cleaning up the shelves after the holiday season, and outside of the new entertainment-driven releases, it's a time of year led by day in and day out sales in support of birthdays and other impulse-driven purchases. What you don't see in the financial statements, but is of the highest importance during this time of year, is the table setting for the future business that I just talked about. Finalizing commitments against promotional opportunities and retail placement for later in the year happens now. Discussions about new listings for spring and even fall 2025 are happening now. And for us in particular, conversations about new entertainment releases and new product initiatives for 2025 and even 2026 are happening as well.

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