Q1 2024 Earnings Summary
Reported on Feb 3, 2025 (After Market Close)
Pre-Earnings Price$19.73Last close (Apr 25, 2024)
Post-Earnings Price$19.85Open (Apr 26, 2024)
Price Change
$0.12(+0.61%)
- Expansion into New Markets and Products: JAKKS is expanding into specialty and collective retail markets with the Authentic Brands Group (ABG) line, including Element skateboards, outdoor furniture, and canopies. The initial launch of skateboards is coming in the fall of this year, with the full product line hitting in spring and summer 2025.
- Strong Pipeline of Licensed Products: The company is launching new products related to popular franchises such as "The Simpsons" and ABG brands like Element, Volcom, and Billabong. While the major impact is expected in 2025, initial launches will begin in the third and fourth quarters of this year, potentially boosting sales and market presence.
- Anticipated Improvement in Gross Margins: JAKKS acknowledged challenges impacting gross margins in Q1 but anticipates that many of these negative impacts are unique to that quarter. The company is confident that gross margins will improve in the balance of the year as they sharpen product margins and move past one-time issues.
- Margins are under pressure due to multiple factors, including disappointing performance of a Q4 2023 theatrical release leading to excess inventory, increased need for price promotions to sell through products, and higher G&A expenses that are expected to persist. , ,
- Significant new product launches will not impact revenues until 2025, such as the full rollout of the Simpsons line and the ABG collaboration, indicating limited near-term growth prospects.
- Cash reserves have been reduced due to the unexpected redemption of preferred shares, leading to lower liquidity and potential reliance on credit lines, which may increase financial risk.