Q2 2024 JAKKS Pacific Inc Earnings Call Transcript
Key Points
- Jakks Pacific Inc (JAKK) reported a gross margin increase of 130 basis points, reaching 32.0%, the best Q2 margin since 2012.
- The doll and role play division saw a 6.6% increase in net sales, despite challenging comparisons with previous Disney releases.
- The company was named the 2023 Hard Goods Vendor of the Year by Target, highlighting strong retail partnerships.
- Jakks Pacific Inc (JAKK) is launching several new product lines, including The Simpsons and Wild Manes, which have received positive early reactions.
- The company has successfully reduced its total inventory level to $51 million, the lowest since 2010, indicating efficient inventory management.
- Total business sales decreased by 11% compared to the same quarter last year, reflecting a challenging market environment.
- The action play and collectible business experienced a significant decline of 30.5% in net sales, impacted by tough comparisons with the previous year's Super Mario Brothers movie.
- International sales dropped by 31.1%, partly due to logistic issues in Asia, affecting overall performance.
- The disguise costume business saw a decline in net sales from $49 million to $44 million, with expectations of a softer performance globally.
- Adjusted EPS decreased to $0.65 per diluted share, down from $1.26 last year, indicating a decline in profitability.
Good afternoon, everyone. Welcome to the JAKKS Pacific second-quarter 2024 earnings conference call with management, who will review the financial results for the first quarter ended June 30, 2024. JAKKS issued its earnings press release earlier today. The earnings release and presentation slides for today's call are available on the company's website in the Investors section.
On the call this afternoon are Stephen Berman, Chairman and Chief Executive Officer; and John Kimble, Chief Financial Officer. Stephen will first provide an overview of the quarter, along with highlights of product lines and current business trends. Then John will provide some additional editorial around JAKKS Pacific's financial and operational results. Mr. Berman will then return with additional comments and some closing remarks prior to opening up the call for questions. (Operator Instructions)
Before we begin, the company would like to point out that any comments made about JAKKS Pacific's future performance, events, or circumstances, including estimates of sales, margins, and/or adjusted EBITDA in 2024, as
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