Following Brexit and subsequent devaluation of the British pound, lower-than-expected sales of a number of movie-licensed products and the suspension of shipments to a major US customer, California toymaker Jakks Pacific is reporting a drop in its Q3 net sales to US$302.8 million. The company reported net sales of US$337 million for the same period in 2015.
Despite these challenges, Jakks Pacific reports a strong Q3 consumer demand domestically for its licensed Disney Princess products, including Tsum Tsum and Gift ‘ems collectibles (pictured), and Nintendo figures and plush.Expectations are high for the fourth quarter sales of a number of Jakks toys featuring Disney properties like Pixar’s Moana, Elena of Avalor, Frozen and Star Wars Rogue One.
Jakks Pacific, meanwhile, has revised its previously issued outlook for 2016. While the company originally expected net sales of approximately US$800 million, it is now forecasting sales of approximately US$755 million. (Full-year 2015 sales rang in at US$745.7 million.)
Reported net income for Q3 2016 was US$30.6 million, including an aggregate of charge of US$4.2 million related to the resolution of prior litigation and a multi-year license audit. Net income for Q3 2015, in comparison, was US$45.8 million and Jakks’ working capital as of September 30, was US$247.6 million (down from US$271.6 million in 2015).
Looking ahead to 2017, the toyco recently acquired C’est Moi, a producer of skin care and makeup products aimed at kids involved in the performing arts. Additionally, Jakks launched Studio JP in collaboration with its Chinese distribution partner Meisheng Culture & Creative Corp. to produce animated content based on its proprietary IP.