JAKKS (JAKK) Q3 Earnings Surpass Estimates, Revenues Miss

JAKKS Pacific, Inc. (NASDAQ:JAKK) reported mixed third-quarter 2019 financial numbers, with earnings beating the Zacks Consensus Estimate and revenues missing the same. Following the release, the company’s shares increased almost 7% on Nov 7.

The company reported adjusted earnings of 76 cents per share, which beat the Zacks Consensus Estimate of 28 cents by 171.4%. Also, the figure increased from the year-ago quarter’s earnings of 38 cents by 100%.

Revenues during the quarter totaled $280.1 million, which missed the consensus mark of $280.5 million by 0.1%. However, the top line increased 18.3% year over year. The uptick can be attributed to strong sales of Disney Frozen 2, Disguise and Nintendo products.

JAKKS Pacific, Inc. Price, Consensus and EPS Surprise

Operating Highlights

In the reported quarter, gross margin was 28.9%, up 170 basis points (bps) from the prior-year quarter’s level. Adjusted EBITDA increased 64% to $44.1 million from $27 million reported in the prior-year quarter.

Balance Sheet

As of Sep 30, 2019, cash and cash equivalents amounted to $71 million compared with $53.3 million as of Dec 31, 2018. Inventory increased to $65.3 million from $53.9 million at the end of 2018. Long-term debt, as of Sep 30, totaled $170.8 million, up from $139.8 million at the end of 2018.

Guidance

The company expects sales to grow nearly 5% in 2019.

Zacks Rank and Key Picks

JAKKS Pacific currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks in the Zacks Consumer Discretionary sector include Career Education Corporation (NASDAQ:CECO) , Activision Blizzard, Inc (NASDAQ:ATVI) , and Mattel, Inc (NASDAQ:MAT) . While Civeo currently sports a Zacks Rank #1 (Strong Buy), Activision Blizzard and Mattel carry a Zacks Rank #2 (Buy).

Career Education’s earnings surpassed estimates in all of the trailing four quarters, the average being 23.9%.

Activision Blizzard has three-five year expected earnings per share growth rate of 12.9%.

Mattel’s current year earnings are expected to rise 60.5%.

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