This article first appeared on GuruFocus .
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Net Sales:$139.2 million in Q2, a 17% increase year-over-year.
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Year-to-Date Sales:$245.9 million, 6% ahead of the prior year.
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North America Sales Growth:20% increase in Q2, 3% for the first half.
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International Sales Growth:3% increase in Q2, 20% for the first half.
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Toys and Consumer Products Growth:5% increase in the first half.
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Dolls, Role-Play and Dress-Up Growth:12% increase in Q2.
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Disguised Business Growth:8% increase in Q2, 9% for the first half.
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Outdoor Seasonal Business:12% decrease in Q2, 17% decrease year-to-date.
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Gross Margin:32.3% in Q2, slightly lower than 32.8% last year.
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Operating Loss:$142,000 in Q2, improved from a $2.8 million loss last year.
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Adjusted EBITDA:$5.4 million in Q2, up from $2.3 million last year.
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Adjusted EPS:$0.25 in Q2, $0.09 for the first half.
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Cash Position:$60.6 million in cash at the end of Q2, up from $43.1 million last year.
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Inventory Level:$58.3 million at the end of Q2, down from $71.8 million last year.
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Quarterly Dividend:$0.25 per share, payable on September 28.
Release Date: July 23, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Jakks Pacific Inc ( NASDAQ:JAKK ) reported a 17% increase in net sales for Q2, reaching $139.2 million, with North America leading the growth.
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The company's international business saw a 20% increase in sales for the first half of the year, marking the highest level of international first-half shipping in over a decade.
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The Toys and Consumer products division grew by 5%, driven by the success of the Super Mario Brothers film merchandise.
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The Dolls, Role-Play, and Dress-Up business increased by 12% in Q2, with strong performance from the Frozen product line.
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Adjusted EBITDA for the quarter was $5.4 million, up from $2.3 million in Q2 of the previous year, indicating improved financial performance.
Negative Points
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The outdoor seasonal business experienced a decline, with sales down 12% in the quarter and 17% year-to-date, due to structural headwinds in retail space allocation.
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Gross margins slightly decreased to 32.3% from 32.8% in the previous year, despite tight management of costs.
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The company reported a slight operating loss of $142,000 in the quarter, although this was an improvement from a $2.8 million loss in the same quarter last year.
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The company does not anticipate any more tariff refunds going forward, which had previously contributed to non-operating income.
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No revenue from anime-related efforts is expected for 2026, indicating a delay in realizing potential growth from this segment.
Q & A Highlights
Q: How has the domestic market changed post-tariff adjustments, and what opportunities does this present for JAKKS Pacific? A: Stephen Berman, CEO, explained that the market has adapted to price changes due to tariffs and costs. JAKKS has reduced costs to bring price points back to levels that drive volume, particularly under $30 retail. The company has diversified its distribution across major retailers and value trades, seeing strong point-of-sale results compared to last spring.
Q: What is the outlook for international markets and their impact on margins? A: Stephen Berman noted that international markets, particularly in EMEA, Latin America, and Southeast Asia, are growing well. JAKKS has adapted its product lines to be more suitable for these markets and maintains a strong FOB structure, enhancing margins and offering competitive pricing to consumers.
Q: How is JAKKS Pacific planning to utilize its increasing cash reserves, particularly regarding new licenses and potential M&A? A: Stephen Berman stated that JAKKS has a strong balance sheet, allowing for exploration of new licenses and potential acquisitions. The company is focused on diversifying its license portfolio and remains open to acquisition opportunities that align with its core focus on toy and kids' consumer products.
Q: Was there any benefit to gross margins from the tariff refunds received? A: John Kimble, CFO, confirmed that there was no benefit to gross margins from the tariff refunds in the quarter.
Q: Is the pace of anime-related efforts progressing as expected, and what is the revenue outlook for 2026? A: Stephen Berman confirmed that anime-related initiatives are on track, with a grassroots marketing approach and wide distribution planned for fall 2027. There is no expected revenue from these efforts in 2026.
Q: How is the current media landscape affecting JAKKS Pacific, particularly with changes at major studios like Pixar and Warner Bros.? A: Stephen Berman stated that there are no challenges from the media landscape changes. JAKKS sees opportunities due to its focus on kids' products and diversification into kidult areas, maintaining strong relationships with licensors and entertainment holders.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
