9:24 h / 2021/02/19
Despite the U.S. toy industry having grown 16% in 2020, Jakks Pacific faced challenges that came to light as the company reported its Q4 and full-year earnings yesterday.
Jakks reported that net sales declined 16% in Q4 to $128.3 million versus $152.5 million during the same period last year. Net sales fell 13.82% in 2020 to 515.8 million versus $598.6 million in 2019. In its reporting and this afternoon’s call with investors, Jakks leaned heavily on declines from Frozen 2 merchandise as pulling down the toy side of the business while the COVID-19 pandemic led to a 26% decline in the Disguise costumes division due to disruption of Halloween celebrations across the U.S. The company says that excluding Frozen 2 declines, its net sales were up 16% which is in line with the toy industry as a whole.
Some of the big wins for Jakks last year include a 91% gain in net sales for Disguise in Q4 and growth in the outdoor categories led by triple-digit growth in sales of the ReDo Skateboards line. Gaming-related licensed toys performed exceptionally well with a 74% gain in Q4 and a 65% gain year-over-year thanks to products from Nintendo, SEGA, and the fall launch of Apex Legends products.
While formal guidance was not provided, Jakks expects a strong year from Disguise which continues to gain top licenses. Provided that the COVID-19 pandemic is somewhat controlled by fall, Halloween takes place on a Sunday which should drive strong sales in costumes and accessories.
Jakks Pacific recently inked new deals with Nintendo, SEGA of America, Moonbug Entertainment, and Universal Brand Development for Disguise costumes inspired by properties including Kirby, Sonic the Hedgehog 2, Blippi, Jurassic World, Trolls, Minions, and more.