The following is a summary of the JAKKS Pacific, Inc. (JAKK) Q2 2024 Earnings Call Transcript:

Financial Performance:

• JAKKS Pacific reported Q2 revenue of $148.6 million, down 11% year over year but up significantly from the $112.4 million in Q2 2021.

• Gross margin improved by 130 basis points, with gross margin at 32.0%, attributed to lower royalty expense and favorable product mix.

• Operating margin was reported at 5.1% and adjusted EBITDA margin at 8.3%, marking strong results despite lower sales.

Business Progress:

• Increased focus on several major product launches aligned with upcoming theatrical releases and streaming events, including Disney's Moana 2 and Sega's Sonic the Hedgehog 3.

• Expansion of product lines into new categories and markets, including a new deal with Academy Sports for Element, Quicksilver, and Roxy skateboards.

• Notable achievements include JAKKS being named the 2023 Hard Goods Vendor of the Year by Target, and the launch of several new initiatives across various product lines including the Simpsons, Wild Manes, and Disney role-play toys.

Opportunities:

• Strong anticipation for new film releases like Disney's Moana 2 and Sega's Sonic the Hedgehog 3 that are expected to boost related merchandise sales.

• Expansion into new product categories and markets, particularly with the launch of Element, Quicksilver, and Roxy skateboards at Academy Sports, aiming to level out seasonal revenue fluctuations and build a stronger presence in evergreen market segments.

Risks:

• Continued challenges in international logistics that impacted sales due to delayed container arrivals, particularly affecting the European market.

• Market uncertainties and potential disruptions in retail and supply chain dynamics that could affect sales and operations.

More details: Jakks Pacific IR

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