Retail closures and declines in seasonal products contributed to another difficult quarter for Jakks Pacific. The California toymaker’s net sales fell 17% to US$78.8 million in Q2 2020.
Net sales for Jakks Pacific’s toys and consumer products segment declined 4% compared to the same period in 2019. Brands that performed well included Frozen 2, Fly Wheels, Minnie Mouse, ReDo and Nintendo. Increases in boy- and girl-focused toys, however, were offset by declines in seasonal products.
The company’s costume-focused Disguise segment (pictured) saw net sales drop 38% due to retailers’ uncertainty around the impact COVID-19 will have on Halloween sales, as well as Jakks Pacific’s decision to scale back shipments to retailers with elevated credit risk.
In North America, net sales for the company’s toys and consumer products segment dropped 2%, while international net sales for the same segment were down 14% in the second quarter.
The toymaker’s net sales fell 6% to US$66.6 million in Q1 2020. And while Jakks reduced its workforce through layoffs in the first quarter and asked all remaining employees to take a temporary reduction in pay, the company reported at the time that it expected to benefit from pent-up demand and clean retail inventories in the second half of fiscal 2020.
Moving forward, Jakks plans to focus on evergreen brands, keeping costs low and preserving cash during the next two quarters.