SEGA’s Blue Blur and Disney’s Madrigal family helped to power Jakks Pacific‘s best first quarter sales and earnings per share (EPS) in 14 years.
The company reported that net sales in Q1 hit $120.9 million, a 44% spike versus $83.8 million in the same period in 2021. Jakks’ highest Q1 sales since 2008 were powered by strong sales of products inspired by Disney’s Encanto and Paramount Pictures’ Sonic the Hedgehog 2. Additionally, Disguise — Jakks’ costumes and seasonal division — contributed to the gains by more than doubling its Q1 sales versus last year.
“Our 2022 is off to an exceptional start,” says Jakks Pacific President and CEO Stephen Berman. “For several years we have talked about maintaining a disciplined focus on growing evergreen toy categories and brands to deliver consistently improving, yet sustainable, results. In addition, this approach can also benefit from the excitement and enthusiasm new entertainment content can generate. As the year begins, we are starting to see strong results as more consumers discover and embrace films like Sonic the Hedgehog 2 and Encanto, and want to deepen their relationships with the characters by engaging with a broad array of our toys, Halloween costumes, day-to-day role play, and many other related products.”
Berman notes that while movies are back to driving enthusiasm in the toy department, the rest of Jakks’ toys and consumer products business experienced mid-single-digit growth in Q1.
Despite the massive growth in net sales, the global supply chain issues took their toll on profit across the board. Gross profit in Q1 2022 was $29.9 million compared to $26.1 million last year.
According to the company, its improved profit margins and lower royalty expenses were no match for the continued increases in freight costs and other business expenses.
“Tight cost controls paired with our higher revenues still generated positive Q1 EBITDA for the first time since 2008,” Berman says. “We have a lot of work to do as we continue to navigate the unpredictable nature of current events, but are excited by the opportunities we see ahead of us this year and thinking ahead to 2023.”
