As a result of the epidemic, Jakks’ sales in the fourth quarter fell by 16%, but this type of toy rose by 91%.
Jakks reported that net sales in the fourth quarter fell 16% to 128.3 million U.S. dollars, compared with 152.5 million U.S. dollars in the same period last year. Net sales fell by 13.82% in 2020 to 515.8 million U.S. dollars, and in 2019 it was 598.6 million U.S. dollars. In its report and in a conference call with investors this afternoon, Jakks relied heavily on the decline of the 'Frozen 2' series because the toy business was pulled down, and the COVID-19 epidemic caused the interruption of Halloween celebrations in the United States. Sales in the Halloween costume department fell by 26%. The company said that excluding the decline in 'Frozen 2Since Jakks was established 26 years ago, we have been focusing on reliable game modes and cooperating with authorized partners of well-known brands. We believe that this focus will be very useful to us in 2020, because the children’s parents spend more time at home looking for products they know and brands they trust. Stephen, Chairman and CEO of Jakks Pacific Berman said. As in the whole of 2020, our fourth-quarter results exceeded our expectations for sales, gross margin, operating income and adjusted EBITDA. We see very strong sales growth for Disney Princess, Nintendo, Sonic the Hedgehog and Halloween costumes. On the business side, Jakks stabilized its balance sheet by adjusting costs and inventory. Berman said that Jakks’ three major US retailers reported double-digit sales growth. In addition, despite the decline in sales, the company increased its gross profit margin and ended the year with the lowest level of net debt since 2013. Berman also pointed out that the upcoming release of Disney's 'Raya' and 'Last Dragon' will put a major test on how streaming media affects toy sales. The movie’s product was initially scheduled to go on sale in November, but it was released as a mixed distribution in limited theaters and streamed on Disney+. Like other companies such as Hasbro and Mattel, Jakks has seen encouraging sales related to evergreen streaming content, such as Disney Princess, which grew 33% last year. This fall, Jakks will release toys related to Disney's Encanto. Some of the major victories that Jakks achieved last year included a 91% increase in Disguise’s fourth-quarter net sales, as well as growth in the outdoor category, where sales of the ReDo skateboard product line achieved triple-digit growth. The gaming-related licensed toys performed exceptionally well, thanks to Nintendo, SEGA's products and the autumn launch of Apex Legends products, which resulted in a 74% increase in revenue in the fourth quarter and a 65% year-on-year increase. Although no formal guidance was provided, Jakks expects that Disguise will have a bumper harvest and will continue to receive the highest authorization this year. If the COVID-19 pandemic is controlled by autumn to some extent, Halloween should be held on Sunday, which will drive strong sales of clothing and accessories. Jakks Pacific recently signed a new deal with Nintendo, US SEGA, Moonbug Entertainment and Universal Brand Development for makeup apparel. These apparels are inspired by Kirby, Sonic the Hedgehog 2, Blippi, Jurassic World, Magic Hair Elf, Little Yellow People wait.