Jakks Pacific is flying high on its strongest earnings in five years.
The company reported its fourth quarter and full-year earnings for 2021 this afternoon, beating estimates despite continued supply chain challenges. The strong performance was bolstered by demand and sell-through for Jakks’ Disney ily 4Ever doll collection at Target, Super Mario and Sonic the Hedgehog products, ReDo and Heart Supply skateboards, and toys inspired by Disney’s Encanto.
The company says it’s net sales grew to $621 million last year, a 20% increase up from $515.9 million in 2020. At 29.5%, Jakks’ gross margin reached its highest level since 2016 while operating income of $38.8 million reached its highest level in more than a decade. The company’s Q4 sales spiked 47%.
“We close 2021 with tremendous pride in our team’s performance, delivering great products and great results in a challenging operating environment,” says Jakks Pacific Chairman and CEO Stephen Berman. “We continued to see exceptional top-line growth across a broad array of brands and categories along with continued margin expansion, despite an unprecedented increase in supply-chain costs. Ocean freight, port fees, and trucking expenses all had a dramatic effect on our quarterly results. These developments forced us to implement a price increase for the back half of 2022 to offset some of these higher costs. We continue to work through these challenges to meet our customers’ orders and ensure that shelves are full.”
On a call with analysts, Berman noted that some sales that had been left on the table due to late deliveries in Q3 were pushed into Q4 and helped lead the sales spike.
For the year, net sales for toys and consumer products were up 48% while sales in the Disguise costumes business grew 21%.
In the absence of Toy Fair season, Berman says that Jakks Pacific maintains a strong outlook for the future as the company works to maximize promotional opportunities this year and begins unveiling its spring 2023 product collection.
In the months ahead, Jakks will debut a fresh wave of Encanto-inspired products as well as a robust collection of toys inspired by Paramount Pictures’ Sonic the Hedgehog 2.
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