JAKKS Pacific, Inc. (JAKK Quick QuoteJAKK – Free Report) reported third-quarter 2023 results, with earnings and revenues surpassing the Zacks Consensus Estimate. While revenues outpaced the consensus estimate for the eighth straight quarter, earnings beat the same for the third consecutive quarter.
Following the announcement, shares of the company increased 22% during the after-hours trading session on Nov 1. The company’s product margins have seen a notable boost this year, thanks to a more stable supply chain and reduced promotional activities compared with the previous year.
Q3 Earnings and Revenues
During the quarter, the company reported adjusted earnings per share (EPS) of $4.75, beating the Zacks Consensus Estimate of $3.46. In the prior-year quarter, JAKK reported adjusted EPS of $3.80.
Quarterly revenues of $309.7 million surpassed the consensus mark of $284 million. However, the top line declined 4% on a year-over-year basis. During the quarter, it reported solid contributions from Costumes. Yet, dismal Toys/Consumer Products sales hurt its top line.
Net sales in the Toys/Consumer Products segment decreased 9% year over year to $246 million. Our estimate was $236.6 million.
Costumes net sales rose 19% year over year to $63.7 million. Our projection was $46.4 million.
JAKKS Pacific, Inc. Price, Consensus and EPS Surprise
Operating Highlights
In the reported quarter, gross margin reached 34.5%, up 600 basis points from the prior-year levels. We predicted the metric to be 26.9%.
Adjusted EBITDA amounted to $67.1 million compared with $59.4 million a year ago.
Balance Sheet
As of Sep 30, the company’s cash and cash equivalents (including restricted cash) were $96.4 million compared with $76.6 million as of Sep 30, 2022.
As of Sep 30, 2023, total debt was zero, in contrast to $67.7 million as of Sep 30, 2022, and $67.2 million as of Dec 31, 2022.