JAKKS Pacific's (JAKK) Q3 Earnings & Revenues Beat, Stock Up

JAKKS Pacific, Inc. JAKK reported third-quarter 2022 results, with earnings and revenues surpassing the respective Zacks Consensus Estimate. The company’s top line also increased year over year.

Following the results, the company’s shares jumped 11.2% during the after-hours trading session on Oct 27. During the quarter, the company benefited from robust demand for its products. The company’s costume business is also performing well. This year, the company has already shipped 25% more costumes than the last year.

Stephen Berman, chairman and CEO of JAKKS Pacific, stated, “We are on track to deliver full-year 2022 revenue growth around 20% vs. prior year for the second year in a row, which are exceptional results that the team and I are very proud of.”

Q3 Earnings and Revenues

During the third quarter, the company reported adjusted earnings of $3.67 per share compared with the Zacks Consensus Estimate of $3.57. In the prior-year quarter, the company had reported adjusted earnings per share of $3.69.

Quarterly revenues of $323 million surpassed the consensus mark of $279 million by 15.6%. The top line increased 36% on a year-over-year basis. The company’s results benefited from a sharp increase in shipments.

Net sales in the company’s Toys/Consumer Products segment increased 56% globally (50% North America, 85% International) on a year-over-year basis, while sales of the Disguise costumes segment decreased 17% year over year.

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 came in at 28.5%, down 310 basis points from the prior-year quarter. The downside was mainly caused by a rise in inbound freight expenses. Adjusted EBITDA came in at $59.4 million during the quarter compared with $41.7 million reported in the prior-year quarter.

Balance Sheet

As of Sep 30, 2022, the company’s cash and cash equivalents (including restricted cash) came in at $76.6 million compared with $26.7 million as of Sep 30, 2021. Debt, non-current portion, net as of Sep 30, 2022, was $65.2 million compared with $93.9 million as of Sep 30, 2021.

Zacks Rank & Key Picks

JAKKS Pacific currently has a Zacks Rank #3 (Hold)

Some better-ranked stocks in the Zacks Consumer Discretionary sector are Crocs, Inc. CROX, Hyatt Hotels Corporation H and Live Nation Entertainment, Inc. LYV.

Crocs sports a Zacks Rank #2 (Buy). CROX has a long-term earnings growth rate of 15%. Shares of the company have declined 53.1% in the past year. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for CROX’s 2022 sales and EPS indicates a rise of 49.7% and 20.7%, respectively, from the year-ago period.

Hyatt currently sports a Zacks Rank #1. H has a trailing four-quarter earnings surprise of 798.8%, on average. The stock has inched up 6.6% in the past year.

The Zacks Consensus Estimate for H’s current financial year sales and EPS indicates a surge of 89.1% and 113%, respectively, from the year-ago period’s reported levels.

Live Nation currently sports a Zacks Rank #1. LYV has a trailing four-quarter earnings surprise of 70.7%, on average. The stock has declined 22.2% in the past year.

The Zacks Consensus Estimate for LYV’s current financial year sales and EPS indicates growth of 130.8% and 117.2%, respectively, from the year-ago period’s reported levels.

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