JAKKS Pacific (NASDAQ:JAKK) reported second-quarter results that Chairman and Chief Executive Officer Stephen Berman said were “modestly better” than the company’s expectations, with revenue rising from a year earlier as North American sales rebounded from tariff-related disruption in the prior-year period.
The toy and consumer products company reported global net sales of $139.2 million for the quarter ended June 30, 2026, up 17% year over year. Berman said the comparison benefited from the prior-year quarter, when “the sudden implementation of massive tariffs dramatically reduced customer orders.” Year-to-date sales increased 6% to $245.9 million, which Berman called the company’s best first half since 2023.
Mario, Disney and Disguise Support First-Half Growth
Berman said the company’s toys and consumer products business was up 5% in the first half, driven by the Action Play & Collectibles division and products tied to the second Super Mario Bros. film, which was released in April. The lineup included 5-inch figures developed for the film, along with play sets, dioramas and plush. Berman said sell-through was solid and that the company has sold in more movie-branded products through the first three quarters of shipping than it did for the first film.
JAKKS is also preparing additional product tied to Donkey Kong in the second half, including a feature play set and a new figure multi-pack. Berman said the company will continue to support its evergreen Nintendo business, including items themed to the Super Mario Wonder game.
The dolls, role play and dress-up business rose 12% in the quarter despite what Berman described as a lack of new entertainment support compared with the prior year. He pointed to the company’s Frozen product line, which has been expanded over the past 18 months, and said the business was up in the first half versus a year earlier. JAKKS is also preparing a retailer exclusive for the fall ahead of the planned Frozen 3 theatrical release in fall 2027.
Berman said lower retail prices on some Disney Princess and Style Collection assortments, following earlier tariff-driven price increases, appear to be helping sales velocity. He cited strong performance from the baby bath doll line launched last fall and a refreshed 6-inch Princess doll line priced below $10.
The Disguise costume business increased 8% in the quarter and 9% in the first half. Berman said contributors included the popularity of Toy Story 5 and Super Mario Bros. films, along with the launch of KPop Demon Hunters costumes. The company’s 2026 costume lineup also includes products tied to Descendants 5, PAW Patrol: The Dino Movie and Minions & Monsters.
Outdoor Seasonal Business Remains a Drag
JAKKS’ outdoor seasonal business remained a headwind. The category, which includes activity tables and chairs, ball pits, ride-ons, skateboards and hula hoops, declined 12% in the quarter and 17% year to date to $11.1 million in sales.
Berman said the pressure is “structural” rather than temporary, as retailers reallocate store space away from large-box items and bulky products face challenges in the low-cost home delivery model. He said JAKKS is working with retailers to defend and recapture shelf space while also redesigning packaging and products to reduce box sizes and improve delivery economics.
Margins Hold, Operating Loss Narrows
Gross margin was 32.3% in the second quarter, slightly below 32.8% in the prior-year period. Berman said tight management of sales, marketing and overhead costs helped reduce the company’s operating loss to $142,000, compared with a $2.8 million loss in the year-earlier quarter. Adjusted EBITDA increased to $5.4 million from $2.3 million a year earlier, bringing trailing 12-month adjusted EBITDA to $37.8 million.
Chief Financial Officer John Kimble said first-half shipments were more than 75% FOB, reaching one of the highest levels the company has seen this decade. He said the company planned 2026 to be more front-weighted than usual because of strength from Super Mario and the absence of new toy introductions tied to holiday theatrical releases in the second half.
Kimble said first-half gross margin dollars increased 3% to slightly more than $80 million. He said JAKKS is focused on optimizing margin dollars rather than margin percentages, especially as the company looks for incremental business outside the traditional U.S. mass market.
JAKKS posted a $5.7 million operating loss in the first half, improved from a $6.5 million loss in the same period last year.
Tariff Refunds Boost Cash, Dividend Approved
Kimble said JAKKS received essentially all of the tariff refunds it applied for after the Supreme Court struck down certain regulations. The company does not expect additional refunds. JAKKS recognized $6.8 million of the refunds as non-operating other income in the quarter and excluded the gain from its published non-GAAP projections for adjusted EBITDA and adjusted earnings per share.
Adjusted earnings per share were $0.25 for the quarter and $0.09 for the first half, compared with adjusted EPS of $0.03 in the year-earlier quarter and break-even adjusted EPS for the first half of last year.
The company ended the quarter with $60.6 million in restricted and unrestricted cash, up from $43.1 million a year earlier. Inventory was $58.3 million, down from $71.8 million a year earlier and up from $52.9 million in the prior quarter.
Kimble said the board approved a sixth consecutive quarterly cash dividend of $0.25 per share, payable Sept. 28 to shareholders of record as of Aug. 28.
Management Highlights International Expansion and 2027 Pipeline
Berman said JAKKS is gaining traction outside the U.S., including through exclusive launches with European accounts, new distributor relationships in fragmented markets and the recent addition of three senior sales professionals to its global organization. The company also opened its first office in South America with an eye toward longer-term growth.
Looking ahead, Berman said JAKKS remains on track to deliver strong 2026 results and is building for growth in 2027 and 2028. He cited planned 2027 theatrical releases tied to Sonic the Hedgehog and Disney’s Frozen, as well as private-label opportunities and new initiatives in anime, manga, VTubers and digital entertainers. In response to an analyst question, Berman said the anime-related efforts remain on pace, but the company does not expect 2026 revenue from those initiatives.
Asked about capital allocation, Berman said the company has a “strong, healthy balance sheet” and is evaluating licenses and potential acquisitions that could benefit JAKKS and its shareholders. He said management is focused on shoring up the business, taking market share and positioning the company for future growth.
About JAKKS Pacific (NASDAQ:JAKK)
JAKKS Pacific, Inc (NASDAQ: JAKK) is a Los Angeles–based company that designs, develops and markets a broad range of toys and consumer products. Since its founding in 1995 by industry veteran Jack Friedman, the company has built a diversified portfolio spanning three primary segments: Toys, Consumer Electronics & Seasonal, and Kids Furniture & Accessories. JAKKS Pacific specializes in both licensed and proprietary brands, collaborating with major entertainment and sports licensors to bring popular characters and franchises to market.
The company’s Toys segment includes action figures, dolls, role-play items, collectible toys and outdoor activity products.
