Last Updated on January 3, 2020 by Danielle
The US toymaker experienced a fourth quarter drop in sales from $167 million to $136.6 million, attributed to Toys R Us’s bankruptcy and other factors.
Jakks Pacific reported a decline in net sales for the critical holiday season last year. More specifically, sales fell from $167 million in 2016 to $136.6 million in the fourth quarter of 2017.
Jakks Pacific attributed Toys R Us’s bankruptcy as the biggest reason for its soft fourth quarter results.
Jakks also reported that its gross margin dropped to 22.1 percent from 31.2 percent in 2016. Net loss for Jakks Pacific came in at $30.4 million.
In response to the results, Stephen Berman, Jakks Pacific’s Chairman and CEO, stated: “A number of factors contributed to a soft fourth quarter, including the bankruptcy of Toys R Us, as well as the continued decline of some legacy product lines that were not fully offset by new launches.”
“Some of the shifts we saw last year in consumer habits – buying more online and less in stores, and less interest in some film licenses, were even more pronounced in 2017.”
With that being said, “We did see a number of product lines with sales growth and improved performance in the quarter. As we look to 2018, we will continue to expand our retail private label programs and exclusive product initiatives and we are excited to launch a number of new major licenses,” Berman said.
“Moreover, we have positioned ourselves well for the future with our investments in skincare and cosmetics, as well as augmented reality and content to cater to the needs of the young, modern consumer.” Jakks also partnered with Morfboard to distribute a new action sports board earlier this year which transforms into a skateboard, scooter, bouncer, and more. Thus far Morfboard has been delivering strong results at retail for Jakks, and we honored it as one of the Best New Toys of Toy Fair 2018.
Berman noted Jakks Pacific is taking “several aggressive steps” to make sure its core brands as well as new products better position the company for growth and profitability in the year ahead.
Source: Toy News