Jakks Pacific
NASDAQ: JAKK
$25.58 ▲ +0.42  (+1.68%)
At close: Aug 13, 2026 · 1:56 PM UTC
Financial Ratios
Market Cap293.68 Mn
P/E18.14
P/S2.32
Div. Yield0.03
Revenue Growth (1y) (Qtr)16.91
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About

JAKKS Pacific, Inc. is a company that designs, produces, markets, sells and distributes toys and related kid targeted consumer products, including kids indoor and outdoor furniture, costumes and various product lines in the sporting goods and home furnishings space. The firm focuses on acquiring or licensing well known intellectual property, trademarks and brand names, many of which are evergreen brands with long product histories. It also develops proprietary products…

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Sector: Consumer Cyclical Industry: Leisure CIK: 0001009829

Investment Thesis

▲ Bull case
  • The company has launched a large scale anime manga and digital creator cultural platform that positions it at the forefront of a fast growing global entertainment segment. This initiative involved over two years of collaboration with top Japanese IP holders such as Aniplex VIZ Media Kodansha Cover Corp and Crunchyroll. By securing worldwide rights for multiple properties the firm can offer a broad portfolio of premium collectibles figures plush tech accessories costumes and role play products. The platform also expands into high growth live event and influencer driven merchandise opportunities with a next generation global distribution infrastructure covering direct to consumer specialty experiential retail and promotional channels.
  • The theatrical release of the Super Mario Galaxy movie generated strong consumer excitement and secured significant out of aisle promotional space for JAKKS Pacific product lines. Retailers are now fully onboard and ready to support the Mario franchise with expanded shelf space and marketing support. The forthcoming streaming release announced by Nintendo and Universal will extend the tailwinds and provide continued sell through momentum throughout the year. This dual phase of theatrical and streaming exposure creates a sustained demand environment for Mario related toys costumes and accessories.
  • International sales increased 38% year over year in the first quarter reaching 29 million dollars and demonstrating the success of the company's geographic diversification strategy. Growth was driven by strong performance in EMEA where the firm achieved its best quarter since 2015 and record results in France and Spain over the past fifteen years. The company has opened five new distribution centers across various territories to better serve smaller accounts and improve market penetration. This international expansion reduces reliance on the volatile US market and provides a more stable revenue base.
  • Over 70% of the company's North American business is shipped on a FOB basis indicating strong demand for this flexible order fulfillment model. The FOB approach allows JAKKS Pacific to align closely with retailer inventory needs while minimizing working capital strain. Despite a 16% decline in North American sales the FOB segment remained resilient and supported overall gross margin stability. The company's ability to maintain a 33 point 4% gross margin despite lower sales reflects effective product mix management and reduced reliance on low margin closeout sales.
  • The firm ended the quarter with 64 million dollars in cash up from 59 million dollars a year ago providing a solid liquidity buffer for strategic initiatives. Management highlighted plans to invest capital in the anime initiative tooling marketing and new 2027 product launches without compromising financial discipline. The board approved a quarterly dividend of zero point two five dollars per share signaling confidence in ongoing cash generation. This cash flexibility also enables the company to pursue accretive acquisition opportunities as inbound interest from potential sellers increases.
▼ Bear case
  • US accounts remain tentative about the full year outlook as they grapple with cost pressures pricing resilience and shifting consumer behavior. This caution has contributed to a 16% decline in North American sales driven by weakness in both domestic and FOB businesses. Management acknowledged that retailers are trying to forecast consumer health in an environment of higher oil prices and volatile macroeconomic conditions. Persistent US weakness could limit the company's ability to leverage its product pipeline and suppress overall revenue growth.
  • The company incurred between one million and two million dollars in tariff expenses during the quarter a significant increase from less than one hundred thousand dollars a year ago. These tariff costs directly affect the cost of goods sold for US domestic products and have already contributed to a 100 basis point decline in gross margin year over year. While management notes the possibility of reclaiming some tariffs the process is uncertain and may take time to materialize. Ongoing trade policy volatility poses a continuous risk to margin stability.
  • JAKKS Pacific's revenue is heavily tied to the performance of licensed properties such as Super Mario Sonic Disney and anime franchises which are subject to the success of associated movies streaming releases and gaming releases. Any delay or underperformance of these entertainment properties could lead to weaker than expected toy sales and inventory build up. The company's ability to quickly bring products to market is a strength but it cannot control the underlying timing of IP driven demand. This dependence creates exposure to fluctuations in the entertainment release calendar.
  • Inventory remained essentially flat at 53 million dollars year over year despite a six% decline in overall sales suggesting potential overstocking in certain categories. Holding excess inventory ties up working capital and may necessitate future markdowns if demand fails to materialize. The flat inventory trend also raises concerns about the company's ability to align production with softer demand environments. Inefficient inventory management could erode profitability and increase obsolescence risk.
  • The board approved a quarterly dividend of zero point two five dollars per share while the company reported an adjusted EBITDA loss of three hundred seventy one thousand dollars in the quarter. Paying a dividend during a period of negative adjusted EBITDA raises questions about the sustainability of the payout if earnings do not recover. Management indicated they will evaluate cash generation throughout the year but the commitment to maintain the dividend could limit flexibility to reinvest in growth initiatives. Investors may view the dividend as a signal of confidence but it also represents a cash outflow that needs to be supported by future profitability.

Geographical Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer Comparison

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7 YETI YETI Holdings, Inc. 3.58 Bn16.281.790.10 Bn
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