Drop the needle on the Super Mario Bros. theme song because JAKKS Pacific is winning the game.
While the company battled the same fourth quarter “boss level” that everyone faced last year — dodging shrinking profit margins paired with a 30% dip in sales due to an increasingly challenging business climate and a disappointing holiday season — the company captured the flag with a net sales increase of 28% to $796.2 million for 2022 as a whole.
The challenging Q4 did have a bright spot in JAKKS’ Diguise business, with a whopping 61% spike in the costumes segment that powered the division to a 38% full-year gain versus 2021. For 2022, the toys and consumer products segment in North America saw a 26% spike while international sales jumped 28% year-over-year.
“2022 exceeded our expectations with a second consecutive year of more than 20% sales growth and, more importantly, strong retail sell-through for our customers,” says JAKKS Pacific Chairman and CEO Stephen Berman. “In addition to a couple of strong successes, we saw solid results from the majority of our product lines. We shipped an exceptional amount of product in a compressed time window resulting in higher-than-average costs in our domestic fulfillment operations in the back half of the year, suppressing our full-year margins. In Q4, and in the new year, we focused on resetting our inventory position and warehouse capacity and feel well-positioned for the new year.”
Licensed Brands, Original IP Level-Up Sales as JAKKS Looks to Grow
On its earnings call Thursday afternoon, JAKKS revealed that products tied to Disney’s Encanto continued to drive sales alongside strong performance from SEGA’s Sonic the Hedgehog, Disney Princess, and Nintendo-branded items.
“We have a great lineup of new introductions in 2023. We’re launching and extending some of our own brands, in addition to introducing new product lines in association with film and TV releases throughout the year,” Berman says.
This year is already off to a strong start with a full range of products supporting The Super Mario Bros. Movie, a new range of Disney Tsum Tsums collectibles, and the launch of JAKKS’ original property Ami Amis, which debuted exclusively at The Toy Book in January.
The company also has new products in the pipeline tied to major entertainment releases, including Disney’s live-action The Little Mermaid and the animated feature, Wish, alongside new licensed offerings from brands including Paramount’s Beavis and Butthead.
JAKKS plans to grow its business in North America by extending its reach beyond its major customers and into additional retail channels while “methodically growing” its international presence by going deeper into its largest markets.
Additionally, the company offered the following bullet points to guide its activities in the months ahead:
- Focus on timeless brands and categories — “singles and doubles”
- Actively pursue the most relevant intellectual property (IP) rights for its model
- Work closely with factories to ensure the best prices and on-time deliveries
- Work with customers and licensing partners to develop the right promotional programs to generate robust sell-through for this year’s product while simultaneously developing the 2024 line
JAKKS leadership also says that the company is “talking to everyone all the time about brand new product line extensions and opportunities to continue to layer on the newness and excitement that our business requires.”
For a preview of JAKKS Pacific’s new products, check out the 2023 edition of The BIG Toy Book, available now.