Lower domestic product sales coupled with decline in product
orders before the crucial holiday season led Malibu,
JAKKS Pacific Inc.
) to slash its sales and earnings outlook for fiscal 2012. The
company also had to bear the brunt of higher costs, including
marketing and advertising expenses as well as minimum license
For 2012, the company lowered its net sales forecast to the
range of $690-$700 million from the previous range of $720--$728
million and adjusted earnings guidance to 68-74 cents from the
earlier projection of $1.04 and $1.08 per share, excluding the
legal and financial advisory charges. On a GAAP basis, JAKKS
Pacific anticipates to finish 2012 in the range of a loss of $2.77
to earnings of 74 cents.
Management is apprehensive about the remainder of 2012 based on
a host of factors which include tough retail environment, cost
inflation, increased pricing pressures, and higher costs for many
manufacturers operating in Asia affecting production and
The Zacks Consensus Estimate for the third quarter and fiscal
2012 are pegged at $1.43 and 52 cents, respectively. We expect
estimates to go down in the coming days as the company reduced its
fiscal 2012 guidance based on its weak retail sales prior to the
upcoming holiday season.
Earlier, management remained upbeat on its product line-up
driven by Monsuno, an animated Japanese television series, as well
as a toy-line and Winx Club, an eminent fashion doll in European
markets. However, the expectation does not seem to come into
JAKKS, which competes with
), is expected to report its third quarter 2012 results on October
JAKKS Pacific currently carries a Zacks #3 Rank, which
translates into a short-term Hold rating. We are also maintaining
our long-term Neutral recommendation on the stock.
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