Blame for a stark downturn in 2019 Q1 sales of 23.8 per cent compared to the same period the year prior at Jakks Pacific, has been placed at the doors of Toys R Us, as well as a decline in previously strong performing licenses such as The Incredibles 2, Moana, and Tsum Tsum.
Q1 sales hit $70.8 million while gross profits fell at the California-based toymaker, by 37.5 per cent to $14.3 million.
The results are in line with what the firm expected Q1 2019 to yield, having been hit by the collapse of Toys R Us, as well as a later Easter holiday.
“In addition, the timing of certain key new product launches tied to major theatrical film releases has, as expected, significantly shifted our revenue to the second half of the year,” said Jakks Pacific CEO, Stephen Berman. “Several licensed properties that drove our sales in the first half of last year saw declines, notably The Incredibles 2, Moana, and Tsum Tsum, in addition to declines in Squish Dee Lish, our own property.”
Still, the company says it is pleased with the success it’s seen with such licenses as Godzilla, Harry Potter, Fancy Nancy and Aladdin, as well as evergreen lines in Moose Mountain and Kids Only.
“We are looking forward to stronger sales in the second half of the year, which should benefit from a strong slate of entertainment content, notably Frozen 2, as well as Toy Story 4, the 30th Anniversary of the release of Disney’s The Little Mermaid, and Disney’s Gigantosaurus animated TV series,” continued Berman.
“In addition, we expect strong contributions from products based on some of our own IP, including TP Blaster: Sheet Storm, Slap Ninja, Pinata Fiesta and Power Dozer. Consistent with our strategy, we continue to see our sales through online channels increase as a percent of total sales, which we expect will help us in a shifting retail landscape.”