Financial Data and Key Metrics Changes - Company reported a 26% increase in sales for Q1 2025, driven by successful toy launches from films like Sonic the Hedgehog 3 and Moana 2 [5] - Gross margin improved to 34.4%, attributed to higher volumes from new releases and better product margins [6] - Adjusted EBITDA for the quarter was $400,000, marking a significant improvement from a loss of $17.2 million in the previous year [13] - Adjusted EPS loss improved to $0.03 per share from a loss of $1.09 last year [13] Business Line Data and Key Metrics Changes - Dolls role play dress up business shipped $55.5 million, a 37% increase year-over-year [5] - Action play and collectibles shipped $42.9 million, reflecting a 30% increase [6] - North American sales were up 25%, while international sales increased by 29% [6] Market Data and Key Metrics Changes - Company is focusing on international markets, particularly in Latin America and EMEA, to offset risks in the U.S. market [33] - Domestic inventory levels are healthy, allowing the company to navigate tariff impacts [9] Company Strategy and Development Direction - Company is exploring alternative sourcing opportunities outside of China while maintaining strong relationships with existing Chinese manufacturers [20] - Focus on developing products for the value trade in response to changing consumer demand [21] - Plans to host a Factory Summit to foster collaboration with manufacturing partners [19] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding tariff issues and their potential impact on pricing and consumer behavior [7][15] - Company remains optimistic about long-term prospects despite current challenges, emphasizing a proactive approach to business development [24] - Management highlighted the importance of maintaining product safety standards while exploring cost-effective manufacturing options [50] Other Important Information - The Board approved a $0.25 per share dividend for the second quarter [14] - Company is debt-free, with an unrestricted cash balance of $59.2 million, up from $35.3 million a year ago [14] Q&A Session Summary Question: What will the holiday season look like if tariffs remain unchanged? - Management indicated that higher tariffs would lead to increased prices for lower-priced products, ultimately impacting consumers the most [29] Question: How is the company addressing international sales growth? - Management confirmed aggressive international expansion, particularly in Latin America and EMEA, to mitigate U.S. market risks [33] Question: How are tariffs affecting licensing opportunities? - Management noted that while some companies face difficulties due to tariffs, this creates opportunities for JAKKS to expand its licensing agreements [55] Question: Are there new strategic M&A opportunities arising from current market conditions? - Management acknowledged increased outreach from banks and individuals regarding potential M&A opportunities due to market challenges [57]

JAKKS Pacific (JAKK) Q1 2025 Earnings Call April 29, 2025 05:00 PM ET Company Participants Stephen Berman - Chairman and CEOJohn Kimble - CFO Conference Call Participants Eric Beder - CEO & Senior Research AnalystTom Forte - Managing Director & Senior Consumer Internet Analyst Operator Good afternoon, everyone. Welcome to the JAKKS Pacific First Quarter twenty twenty five Earnings Conference Call with Management, who will review financial results for the quarter ended 03/31/2025. JAKKS issued its earnings p ...

Financial Data and Key Metrics Changes - Company reported a 26% increase in sales for the quarter, driven by successful toy launches from films like Sonic the Hedgehog 3 and Moana 2 [5] - Gross margin improved to 34.4%, attributed to higher volumes from new releases and better product margins [6] - Adjusted EBITDA for the quarter was $354,000, a significant improvement from a loss of $17.2 million in the previous year [13] - Unrestricted cash balance at the end of the quarter was $59.2 million, up from $35.3 million a year ago [14] Business Line Data and Key Metrics Changes - Dolls role play dress up business shipped $55.5 million, a 37% increase year-over-year [5] - Action play and collectibles shipped $42.9 million, a 30% increase [6] - North American sales were up 25%, while international sales increased by 29% [6] Market Data and Key Metrics Changes - Company is focusing on international markets to offset risks from the U.S. market, with significant growth in Latin America and EMEA [34] - The company is actively engaging customers across various international regions to enhance market presence [9] Company Strategy and Development Direction - Company is exploring alternative sourcing opportunities outside of China while maintaining strong relationships with existing partners [19] - Focus on product lines priced at $29.99 or less to cater to value-conscious consumers [20] - Plans to host a Factory Summit to foster collaboration with partners and drive product innovation [18] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding tariff issues and their potential impact on pricing and consumer behavior [8][15] - Company remains optimistic about long-term prospects despite current challenges, emphasizing a proactive approach to business development [23] - Management highlighted the importance of maintaining product safety standards while exploring cost-effective manufacturing options [51] Other Important Information - The Board approved a $0.25 per share dividend for the second quarter [14] - Company is debt-free, allowing for greater flexibility in navigating current market challenges [14][56] Q&A Session Summary Question: What will the holiday season look like if tariffs remain unchanged? - Management indicated that higher tariffs would lead to increased prices for lower-priced products, ultimately impacting consumers the most [29] Question: How is the company addressing international sales and infrastructure? - Management confirmed aggressive international expansion efforts, particularly in Latin America and EMEA, to mitigate U.S. market risks [34][36] Question: How are tariffs affecting licensing opportunities? - Management noted that while some companies face difficulties due to tariffs, this creates potential opportunities for JAKKS to expand its licensing agreements [55][57] Question: Are there new strategic M&A opportunities arising from current market conditions? - Management acknowledged increased outreach from banks regarding potential M&A opportunities, suggesting that the current environment may lead to more favorable conditions for acquisitions [58]