JAKKS Pacific Reports Second Quarter 2025 Financial Results

Core Viewpoint - JAKKS Pacific, Inc. reported a significant decline in net sales for the second quarter of 2025, primarily driven by a 31% drop in U.S. sales, while international sales showed growth, particularly in the Rest of World segment, which increased by 41% compared to the previous year [6][11]. Financial Performance - Net sales for Q2 2025 were $119.1 million, a decrease of 20% from $148.6 million in Q2 2024 [6][11]. - The Toys/Consumer Products segment saw a global sales decline of 23% to $80.4 million, while Costumes sales decreased by 12% to $38.7 million [6][11]. - For the first half of 2025, net sales totaled $232.3 million, down 3% from $238.7 million in the same period last year [7][11]. Geographic Sales Breakdown - U.S. sales for Q2 2025 were $87.0 million, down 31% from $125.8 million in Q2 2024 [6][11]. - Sales in the Rest of World segment reached $32.1 million, up 41% from $22.8 million in Q2 2024 [6][11]. - For the first half of 2025, U.S. sales were $175.9 million, down 10% from $196.3 million, while Rest of World sales increased by 33% to $56.4 million from $42.4 million [7][11]. Profitability Metrics - Gross profit for Q2 2025 was $39.0 million, down from $47.6 million in Q2 2024, with a gross margin of 32.8%, slightly improved from 32.0% in the prior year [11]. - The company reported an operating loss of $2.8 million for Q2 2025, compared to an operating income of $7.6 million in Q2 2024 [11]. - Adjusted net income attributable to common stockholders was $0.4 million (or $0.03 per share) in Q2 2025, down from $7.3 million (or $0.65 per share) in Q2 2024 [11]. Cash and Inventory Position - As of June 30, 2025, the company's cash and cash equivalents totaled $43.1 million, up from $17.9 million a year earlier, but down from $70.1 million at the end of 2024 [8]. - Inventory levels increased to $71.8 million from $51.3 million a year ago [8]. Management Commentary - The CEO expressed confidence in the company's ability to navigate challenges and emphasized the importance of leveraging experience and relationships to adapt to market conditions [5]. - The refinancing of the credit facility was highlighted as a move to enhance financial resilience and prepare for future opportunities [5].