JAKKS Pacific Inc. reported fourth‑quarter 2025 net sales of $127.1 million, a 3% decline from the same period a year earlier, and full‑year sales of $570.7 million, down 17% YoY. Adjusted earnings per share of $‑0.18 beat the consensus estimate of $‑0.85, while revenue surpassed the $117.67 million estimate by $9.44 million. The company’s gross margin rose to 32.4% for the year, the highest in fifteen years, and adjusted EBITDA reached $35.4 million, a decline from $59.3 million in 2024 but an improvement over the $3.8 million loss recorded in Q4.
In the quarter, gross margin was 31.0%, up 380 basis points from 27.2% in Q4 2024. Adjusted EBITDA was a loss of $3.8 million, an improvement from the $10.2 million loss in the prior year’s fourth quarter. U.S. sales fell 8% in the quarter and 24% for the year, while international sales grew 10% in the quarter and 6% for the year, driven largely by a 14% increase in European operations.
Inventory stood at a bit less than $60 million, up from $53 million, according to CFO John Kimball, reflecting expanded distribution in Europe and Mexico. The company generated more than $8 million of cash flow from operations in 2025 and paid $11.2 million in common dividends. JAKKS Pacific reaffirmed its $0.25 quarterly dividend, payable March 30 2026.
Stephen Berman, Chairman and CEO, said, "Our fourth quarter results were roughly in line with our expectations. The significant customer order disruptions of Q2 and Q3 driven by rapidly changing tariff policy abated in Q4 and allowed for a slightly more predictable environment." He added, "We feel we are leaving 2025 stronger than we left 2024 and are excited about 2026's potential," and noted the company "protected our core business by not chasing top line at the expense of margin, while prudently controlling discretionary spending."
Management guided for low‑to‑mid‑single‑digit top‑line growth in 2026 while prioritizing margin expansion. The guidance signals confidence in the company’s ability to navigate tariff headwinds and maintain profitability through disciplined cost management and a strong balance sheet.
The results underscore JAKKS Pacific’s resilience amid tariff‑driven headwinds. Margin expansion to 32.4% demonstrates effective pricing power and cost control, offsetting the 17% decline in full‑year sales. The company’s focus on high‑margin licensed products, disciplined inventory, and a debt‑free balance sheet positions it to weather continued tariff uncertainty while pursuing modest growth in 2026.
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