JAKKS Pacific (NASDAQ:JAKK) reported third-quarter net sales of $254 million for the period ended Sept. 30, 2026, up 20% from the prior-year quarter, as growth in North America, Disney-related products and Nintendo merchandise offset a softer international quarter.
Chairman and Chief Executive Officer Stephen Berman said year-to-date sales increased 13%, while the company’s freight-on-board, or FOB, business model represented more than 75% of sales during the first nine months of the year. He said buying patterns were returning to pre-tariff quarterly seasonality, though the company continues to manage higher product and freight costs.
North American Growth Led the Quarter
North American sales rose 28% in the third quarter and were up 14% year to date, according to Berman. International sales declined 4% during the quarter following what he described as a strong first half, although international sales remained 7% higher year to date. Europe was marginally higher, while other international regions declined, he said.
The company’s dolls, role play and dress-up business grew 29% in the quarter and 7% year to date. Berman attributed the growth in part to Disney products, adding that point-of-sale trends at JAKKS’ two largest retail accounts continued to rise by double digits in the category.
Action play and collectibles revenue increased 19% in the quarter, supported by the Super Mario Galaxy film and the company’s Nintendo evergreen business. Comparable point-of-sale data was roughly flat for the quarter against prior-year comparisons that included Sonic the Hedgehog 3 and a DC x Sonic crossover initiative, Berman said. Comparable point-of-sale data was up mid-single digits year to date.
Overall, toy and consumer-products shipping rose 23% in the third quarter and 13% year to date. The company’s costume business generated $62 million in quarterly sales and $111 million year to date, placing it slightly ahead of 2024 levels, Berman said. He noted that most U.S. costume accounts posted double-digit growth and that JAKKS has been expanding its European account base and year-round dress-up business.
Margins Held as Costs Remained Elevated
Chief Financial Officer John Kimble said third-quarter gross margin was 32.1%, compared with 32.0% a year earlier. Higher sales translated into a 20% increase in gross-margin dollars, he said, though the company continued to face pressure from product and freight costs.
Berman cited higher resin prices affecting product costs and higher diesel prices affecting ocean and land freight. He said JAKKS is prioritizing shipments, scrutinizing inventory and working with long-standing manufacturing partners in Asia to mitigate the effects of those costs.
Kimble said selling expenses increased as the company expanded promotional activity compared with last year, when it had reduced spending amid lower sales volumes. General and administrative costs were higher in aggregate but benefited from some scale on higher volume, he said.
- Adjusted EBITDA was $44.4 million, compared with $36.5 million in the prior-year quarter.
- Trailing 12-month adjusted EBITDA was $45.7 million, up from $37.8 million in the prior quarter.
- Adjusted earnings per share were $2.68, compared with $1.80 a year earlier.
- Year-to-date adjusted EPS was $2.81, versus $1.79 in the prior-year period.
- Cash, including restricted and unrestricted cash, totaled $45 million at quarter-end, compared with $28 million a year earlier.
- Inventory was $64 million, down from $71 million a year earlier.
The board approved a quarterly cash dividend of $0.25 per share, payable Dec. 28 to shareholders of record as of Nov. 27.
Product Pipeline Includes Disney, Nintendo and Collector Dolls
Berman said demand has been strong for costumes tied to Netflix’s KPop Demon Hunters, as well as Disney’s Descendants 5, Pixar’s Toy Story 5, Super Mario, Sonic the Hedgehog and Harry Potter. Warner Bros. is promoting a Harry Potter HBO series scheduled to launch in December, alongside the 25th anniversary of the first Harry Potter theatrical release, he said.
Disney Princess and Disney Frozen products have exceeded the company’s expectations in 2026, Berman said. JAKKS also highlighted initial sales of its Disney Princess Magical Light & Style Rapunzel doll and continued expansion of Walmart private-label offerings through the My Sweet Love and My Life As brands.
The company also introduced its Doll Haus of Dread collector-doll line, featuring dolls inspired by Ghostface from Scream, Billy the Puppet from Saw, Jason from the Jason Universe franchise and Pinhead from Hellraiser. Berman said the line launched exclusively at Walmart and Walmart.com and sold through inventory following a live video sale at Walmart’s collector booth during New York Comic Con.
Company Sees Expansion Opportunities in 2027
Management said it is preparing for a stronger entertainment slate in 2027, including Sonic the Hedgehog 4 in March, a Simpsons movie in September and Frozen 3 in November. Berman said the company did not have a major new entertainment release in the toy business for the 2026 holiday season, but said the lack of a major release reflected timing rather than a more selective licensing strategy.
JAKKS is also pursuing a long-term initiative centered on anime, manga, VTubers and digital entertainers. Berman said retail meetings in the U.S., Europe and Latin America ahead of the initial launch generated enthusiastic feedback.
During the question-and-answer session, Berman said the company is expanding distribution in Europe, Latin America and Southeast Asia, including through additional staffing, warehouses and distribution centers. He said the company expects deeper penetration in secondary and value channels to support growth in 2027 and 2028. Kimble said international margins are generally comparable with those in the U.S.
About JAKKS Pacific (NASDAQ:JAKK)
JAKKS Pacific, Inc is a toy and consumer products company that develops, manufactures and markets toys, games and related products for children and families. Its portfolio includes action figures, dolls, vehicles, playsets, role-play and dress-up products, plush toys, preschool items, games, and seasonal and outdoor products.
The company sells products under its own brands and through licensing and entertainment partnerships. Its offerings have included products based on well-known movie, television, video game and character properties, as well as proprietary brands such as Maui and Airwalk.
