JAKKS Pacific, Inc. Q1 2026 Earnings Recap

Shares jumped 11.9% following a quarter that showed resilient margins and solid international growth, reassuring investors despite a 6% sales decline driven by cautious U.S. retailer demand and lower North American revenues.

Key Takeaways

• Q1 net sales declined 6% year-over-year to $107 million, with North American revenues down 16% to $78 million, partly due to reduced low-margin closeout sales.
• International sales grew 38% to $29 million, supported by strong domestic and FOB orders outside the U.S.
• Gross margin held up well at 33.4%, down 100 bps from prior year, aided by new product introductions and fewer discounted sales despite increased tariffs costing $1–2 million vs <$100,000 last year.
• Adjusted EBITDA swung to a loss of $371,000 from a $354,000 gain a year earlier, reflecting revenue softness despite a 4% cut in SG&A expenses.
• Management continues to navigate cautious retailer sentiment amid cost pressures while investing in new product initiatives for 2027 and beyond.