JAKKS Pacific Earnings: Here’s Why the Stock is Falling Now

JAKKS Pacific, Inc. (NASDAQ:JAKK) had a loss and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 22.47%.

JAKKS Pacific, Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased to $-2.14 in the quarter versus EPS of $0.06 in the year-earlier quarter.

Revenue: Decreased 26.92% to $106.23 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: JAKKS Pacific, Inc. reported adjusted EPS loss of $2.14 per share. By that measure, the company missed the mean analyst estimate of $0.05. It missed the average revenue estimate of $147.74 million.

Quoting Management: Stephen Berman, President and CEO of JAKKS Pacific, stated, “We are disappointed that JAKKS has not met its second quarter target and will not achieve its full year 2013 forecast. Sales for the second quarter were significantly below expectations due to a variety of factors. Several retailers, both in the United States and in Europe, are struggling and have substantially decreased their orders. In addition, the poor performance of several of our key properties, including Monsuno and the Winx Club, also contributed to the decline, along with unusually cool weather that affected seasonal toy sales leading to more aggressive markdowns at retail as shelves are cleared for back-to-school products. We also believe the decline in sales reflects the continuing change in play patterns of children of all ages, who continue to rely more and more on smart devices for their fun and entertainment. As previously announced, this shift in play patterns has caused companies like JAKKS to evolve to meet the changing demands of its consumers with technologically enhanced product offerings.”

Key Stats (on next page)…

Revenue increased 36.07% from $78.07 million in the previous quarter. EPS decreased to $-2.14 in the quarter versus EPS of $-1.23 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $1.31 to a profit $1.58. For the current year, the average estimate has moved down from a profit of $0.58 to a profit of $0.45 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)