Jakks Pacific has detailed its financial results for the first quarter ended March 31th, 2017, citing a decline in net sales.
The toy giant revealed that net sales were $94.5 million compared to $95.8 million reported in the comparable period in 2016.
Gross margin was ‘in line with expectations’ at 31.8 per cent, slighty down compared to last year’s 32.5 per cent due to pricing pressure on Funnoodle pool toys and increased capital expenditures in 2016.
In addition, operating income declined due to start-up costs with the firm’s C’est Moi make-up and skincare range and Jakks' animation initiative, as well as increased testing costs related to the expansion sales of some products.
“We are pleased with our sales performance in the first quarter, which was in line with our expectations going into this year and consistent with the seasonality of our business,” said Stephen Berman, chairman and CEO of Jakks.
“In the first quarter, we benefitted from the box-office hit, Disney’s Beauty and The Beast, the DVD launch of Disney’s Moana, the theatrical release of Smurfs: The Lost Village, as well as Nintendo’s launch of its new Switch platform. We’re also pleased that our Disney Tsum Tsum collectable figure line is growing in the international markets, as the collectables category begins to show signs of softening industry-wide.”
Meanwhile, inventory levels were down from year-end as anticipated to $67.5 million and adjusted EBITDA was down modestly year-over-year to negative $10.6 million.
Berman added: “As we look ahead to the next few quarters, we will continue to focus on margin improvement and our long term strategic goals.
“Our fall lines are moving forward as planned and we have a strong line-up of new product introductions that are a balanced mix of owned IP and licensed brands.”