A mix of licensed products and original IP gave Jakks Pacific a boost last year, despite fallout from the collapse of Toys “R” Us (TRU) in the U.S. and other territories. The company reported financial results for the fourth quarter and full-year ended December 31, 2018, with a targeted goal of 5 percent sales growth this year. Highlights include less than expected losses and an increase in gross margin.

In its earnings announcement, the Santa Monica-based toymaker put heavy spin on the TRU impact, focusing on results as it would be with TRU excluded.

“We are pleased that despite the considerable industry-wide disruption caused by the liquidation of Toys ‘R’ Us, we were able to deliver positive adjusted EBITDA for the full year,” says Stephen Berman, CEO of Jakks Pacific. “New licensed properties such as Incredibles 2, Harry Potter, and Fancy Nancy, as well as our properties such as Morf Board, Perfectly Cute, and TP Blaster, performed very well during the 2018 fourth quarter. We made good progress on our goals of expanding international sales and increasing the portion of our sales generated through online retailers, and we believe that we are better positioned entering 2019.”

Fourth Quarter 2018 Overview vs. Same Period 2017:

  • Net sales were $132.3 million compared to $136.6 million reported in the prior year period. Excluding net sales to TRU of $1.3 million and $19.6 million in 2018 and 2017, respectively, net sales increased in 2018 by 12 percent on a year-over-year basis.
  • Gross margin was 30.6 percent, up from 22.1 percent in 2017.
  • Net loss attributable to Jakks was $3.2 million, or $0.14 per basic and diluted share vs. net loss attributable to Jakks of $30.4 million, or $1.33 per basic and diluted share in 2017.
  • Adjusted EBITDA was negative $1.6 million, compared to negative $6.8 million in 2017.

Fiscal 2018 Overview vs. Same Period 2017:

  • Net sales were $567.8 million compared to $613.1 million reported in the prior year period. Excluding net sales to Toys “R” Us of $16.6 million and $69.4 million in 2018 and 2017, respectively, net sales increased in 2018 by 1 percent on a year-over-year basis.
  • Gross margin was 27.4 percent, up from 25.4 percent in 2017.
  • Net loss attributable to Jakks was $42.4 million, or $1.83 per basic and diluted share vs. net loss attributable to JAKKS of $83.1 million, or $3.89 per basic and diluted share in 2017.
  • Adjusted EBITDA was $2.3 million, compared to $15.8 million in 2017.

Jakks had a strong showing at Toy Fair New York, and just announced a new partnership with The Pokémon Company for Halloween costumes through its Disguise division.