Sign Up for Updates

Jakks Pacific Banking on Frozen 2 to Drive Sales


The toy industry is expected to turn the corner in the second half with the release of Frozen 2 and other franchise films as it shakes off the after effects of Toys R Us’ liquidation that has reduced sales and retail shipments so far this year, Jakks Pacific CEO Stephen Berman said in releasing Q1 earnings.

In particular, Jakks is banking on Frozen 2 to drive sales of its licensed role play products and dolls “well into” 2020 as Disney puts more marketing muscle behind it than it did for the first film, which was a surprise hit when it was released in November 2013.

The first of Jakks’ Frozen 2 products ship in Q3 and start sales Oct. 4, with a second wave of items due in November in front of the Nov. 21 film release. A third line is due in spring 2020. Jakks will have Frozen 2 exclusives with a “broad number” of retailers, Berman said.

Jakks forecast that 73% of its annual revenue will be generated in the second half. Jakks also projected sales of $597 million in the year ending Dec. 31, increasing to $642 million in 2020.

The increase in “retailer awareness” and “consumer acceptance” is “dramatically different” than that which accompanied Frozen 1 in the “sense of size, broadness and worldwide acceptance” and plans for spring 2020 are “far ahead” of those for the previous film, Berman said.

“In addition to more of a global focus [for Frozen 2] from Disney” there also is “better data analytics” and a “strong understanding of what resonates with consumers, all factors driving greater confidence in merchandise productivity,” Jeffries & Co. analyst Stephanie Wissink said in a research note.

The expected gains in revenue, follow Jakks’ net loss narrowing to $29.1 million in Q1 ended March 31 from $36.1 million a year earlier, which included a $13.7 million bad debt write off tied to Toys R Us. Revenue fell 24% to $70.8 million, below analyst estimates of $76 million, and largely tied to Toys R Us, which accounted for $9.5 million in revenue a year earlier.

The decreased sales also were tied to a drop in revenue from Incredibles 2-related products, which were a top-seller a year ago, as well as a downturn in revenue from Moana, Frozen 1, Tangled and Elena of Avalor.

Sales of dolls, role and dress-up, which included those Disney properties, fell 35% to $29 million, while those of action figures and ride-on vehicles slipped 26% to $15.1 million, a decrease that was partly offset by sales of Harry Potter, Nintendo and Godzilla-related products.

Jakks also is continuing discussions with Hong Kong Meisheng Cultural Co. to inject $50 million into the company to increase its ownership to 51% from 18%. Jakks has been in negotiations with Meishung, which purchased its stake in Jakks in 2017, for about a year. In lieu of Meishung’s offer, Jakks has been negotiating with creditors in recent months to extend a $113 million term loan due in 2020 and a potential refinancing of its credit agreement.


Jakks Pacific, Brent Novak, CFO, 424-268-9444

Become a Member Today

Learn More

  • Copyright © 2019 Licensing International
  • We use web cookies to offer you a better experience on our site. By clicking on "Accept" you consent to the use of cookies in accordance with our Cookie Policy.

    Translation provided by Google Translate, please pardon any shortcomings