{ "@context": "https://frontierpicks.com/schemas/dossier.v1.json", "ticker": "JAKK", "name": "JAKKS Pacific, Inc.", "url": "https://frontierpicks.com/dossiers/JAKK/", "json_url": "https://frontierpicks.com/dossiers/JAKK.json", "status": "DORMANT", "current_conviction": "MEDIUM", "archetype": { "code": "a7", "n": 7 }, "current_thesis": "JAKKS Pacific's licensed Disney doll, role-play and costume lines lifted third-quarter sales 20% and net income 50%, and the shares are modestly more likely than not to beat the S&P 500 over three months. Black Friday on 27 November 2026 gives the first holiday read; the report expected in mid-February 2027 settles it.", "invalidation_trigger": "A daily close below $25.42, the 2026-08-28 adjusted close, which would erase the late-summer advance and the third-quarter beat. Fourth-quarter net sales below the year-earlier level, or negative holiday sell-through at Target or Walmart, would also break the case.", "catalyst_date": "2026-11-30", "portfolio": null, "pick": null, "themes": [ "consumer-discretionary-rotation" ], "tags": [], "sources": [], "caveats": [], "source_links": [ { "title": "JAKKS Pacific Reports Third Quarter 2026 Financial Results", "url": "https://www.jakks.com/news-press-releases/jakks-pacific-reports-third-quarter-2026-financial-results/", "date": null }, { "title": "Jakks Pacific Q3 2026 Earnings Call Transcript", "url": "https://www.benzinga.com/news/26/10/62549103/jakks-pacific-q3-2026-earnings-call-transcript", "date": null }, { "title": "2027 Toy of the Year® Finalists Unveiled", "url": "https://www.toyassociation.org/PressRoom2/News/2026-News/2027-toy-of-the-year-finalists-unveiled.aspx", "date": "2026-11-07" } ], "evidence": [ { "claim": "Third-quarter net sales were $254.2 million, up 20% from $211.2 million; Toys/Consumer Products rose 23% to $192.0 million and Costumes 13% to $62.2 million.", "source": "JAKKS Pacific third-quarter 2026 earnings release", "as_of": "2026-10-22" }, { "claim": "Third-quarter adjusted EPS was $2.68 versus $1.80 a year earlier and a $2.33 consensus estimate; GAAP diluted EPS was $2.48.", "source": "JAKKS Pacific earnings release; Benzinga", "as_of": "2026-10-22" }, { "claim": "Operating income rose 27% to $37.4 million and net income 50% to $29.9 million; gross margin was 32.1%, up 10 basis points.", "source": "JAKKS Pacific third-quarter 2026 earnings release", "as_of": "2026-10-22" }, { "claim": "North America sales rose 28% to $209 million while International fell 4% to $45 million.", "source": "JAKKS Pacific third-quarter 2026 earnings release", "as_of": "2026-10-22" }, { "claim": "Management said POS at its two largest retail accounts was tracking up double digits, and that no new entertainment release supports the toy business this holiday season.", "source": "JAKKS Pacific third-quarter 2026 earnings call", "as_of": "2026-10-22" }, { "claim": "Target and Walmart were 27.3% and 27.9% of nine-month 2026 net sales; cash including restricted cash was $45.1 million.", "source": "JAKKS Pacific third-quarter 2026 10-Q", "as_of": "2026-09-30" }, { "claim": "CEO Stephen Berman exercised options on 91,874 shares at $30.52 with 49,475 shares withheld for tax; CFO John Kimble exercised options on 20,994 shares with 11,306 withheld.", "source": "SEC Form 4 filings", "as_of": "2026-10-27" }, { "claim": "JAKKS Pacific announced a Skydance master toy licence for 'K-Pop: The Debut' (2026-11-12), a multi-year Skybound licence for 'Invincible' (2026-11-11) and an exclusive Alliance Entertainment distribution deal for anime and VTuber lines (2026-11-10).", "source": "Company news announcements", "as_of": "2026-11-12" } ], "view_changes": [], "frame": null, "filed_numbers": { "as_of": "2026-11-13", "sector": "Consumer Cyclical", "financials": { "status": "ok", "reason": null, "close_date": "2026-11-13", "latest_quarter": "2026-09-30", "figures": { "revenue": { "status": "ok", "quarters": [ { "end": "2026-09-30", "filed": "2026-10-27", "restated": null, "value_musd": 254.2, "yoy_pct": 20.4 }, { "end": "2026-06-30", "filed": "2026-07-31", "restated": null, "value_musd": 139.2, "yoy_pct": 16.9 }, { "end": "2026-03-31", "filed": "2026-05-01", "restated": null, "value_musd": 106.7, "yoy_pct": -5.8 }, { "end": "2025-12-31", "filed": "2026-03-02", "restated": null, "value_musd": 127.1, "yoy_pct": -2.8 }, { "end": "2025-09-30", "filed": "2025-10-31", "restated": null, "value_musd": 211.2, "yoy_pct": -34.3 }, { "end": "2025-06-30", "filed": "2025-08-01", "restated": null, "value_musd": 119.1, "yoy_pct": -19.9 } ] }, "gross_margin": { "status": "ok", "quarters": [ { "end": "2026-09-30", "filed": "2026-10-27", "restated": null, "pct": 32.1 }, { "end": "2026-06-30", "filed": "2026-07-31", "restated": null, "pct": 32.3 }, { "end": "2026-03-31", "filed": "2026-05-01", "restated": null, "pct": 33.4 }, { "end": "2025-12-31", "filed": "2026-03-02", "restated": null, "pct": 31 }, { "end": "2025-09-30", "filed": "2025-10-31", "restated": null, "pct": 32 }, { "end": "2025-06-30", "filed": "2025-08-01", "restated": null, "pct": 32.8 } ] }, "operating_margin": { "status": "ok", "quarters": [ { "end": "2026-09-30", "filed": "2026-10-27", "restated": null, "pct": 14.7 }, { "end": "2026-06-30", "filed": "2026-07-31", "restated": null, "pct": -0.1 }, { "end": "2026-03-31", "filed": "2026-05-01", "restated": null, "pct": -5.2 }, { "end": "2025-12-31", "filed": "2026-03-02", "restated": null, "pct": -6.8 }, { "end": "2025-09-30", "filed": "2025-10-31", "restated": null, "pct": 13.9 }, { "end": "2025-06-30", "filed": "2025-08-01", "restated": null, "pct": -2.3 } ] }, "pretax_income": { "status": "ok", "end": "2026-09-30", "filed": "2026-10-27", "value_musd": 37.6 }, "net_income": { "status": "ok", "end": "2026-09-30", "filed": "2026-10-27", "four_quarters_end": "2026-09-30", "value_musd": 29.9, "four_quarters_musd": 26.2 }, "operating_cash_flow": { "status": "ok", "end": "2026-09-30", "filed": "2026-10-27", "first_end": "2025-12-31", "value_musd": 50.7 }, "capital_spending": { "status": "ok", "end": "2026-09-30", "filed": "2026-10-27", "first_end": "2025-12-31", "value_musd": 14.9 }, "free_cash_flow": { "status": "ok", "end": "2026-09-30", "filed": "2026-10-27", "first_end": "2025-12-31", "value_musd": 35.7 }, "diluted_share_change": { "status": "ok", "end": "2026-09-30", "filed": "2026-10-27", "base_end": "2025-09-30", "pct": 5.5 }, "cash": { "status": "ok", "end": "2026-09-30", "filed": "2026-10-27", "value_musd": 44 }, "debt": { "status": "not available" }, "net_cash": { "status": "not available" }, "deferred_revenue": { "status": "not reported" }, "backlog": { "status": "not reported" }, "receivables": { "status": "ok", "end": "2026-09-30", "filed": "2026-10-27", "value_musd": 240.3 }, "inventory": { "status": "ok", "end": "2026-09-30", "filed": "2026-10-27", "value_musd": 63.8 }, "equity": { "status": "ok", "end": "2026-09-30", "filed": "2026-10-27", "value_musd": 277.3 }, "market_value": { "status": "not available" }, "enterprise_value": { "status": "not available" }, "ev_sales": { "status": "not available" }, "ev_ebit": { "status": "not available" }, "pe": { "status": "not available" }, "pb": { "status": "not available" }, "fcf_yield": { "status": "not available" } } }, "short_interest": { "status": "ok", "settlement": "2026-10-15", "published": "2026-10-26", "short_pct_of_outstanding": null, "days_to_cover": 3, "change_pct": -16 }, "insiders": { "status": "ok", "as_of": "2026-11-15", "windows": [ { "days": 90, "status": "ok", "from": "2026-08-18", "bought_usd": 0, "sold_usd": 0, "bought_unpriced": 0, "sold_unpriced": 0 }, { "days": 365, "status": "ok", "from": "2025-11-16", "bought_usd": 0, "sold_usd": 0, "bought_unpriced": 0, "sold_unpriced": 0 } ] } }, "body_markdown": "## Current Thesis\n\nJAKKS Pacific's licensed doll, role-play and costume lines are earning more on higher sales, and the shares are modestly more likely than not to beat the S&P 500 over the next three months. The company reported on 2026-10-22 that third-quarter net sales rose 20% and net income 50%. Holiday sell-through decides the call, with no new film behind the toy line this year. Black Friday on 2026-11-27 gives the first read. The fourth-quarter report, expected in mid-February 2027, settles it.\n\nThe shares closed at $36.12 on 2026-11-12, after a record-high close of $36.76 on 2026-11-11 and an intraday 52-week high of $37.45 the same day. The three-month gain is 41.9%. Company news in the past week is about future licences: a multi-year agreement with Skybound for 'Invincible' consumer products (2026-11-11), a master toy licence from Skydance for 'K-Pop: The Debut' (2026-11-12), and an exclusive North American distribution agreement with Alliance Entertainment for its anime and VTuber lines (2026-11-10). These widen the 2027 product slate. None adds to fourth-quarter 2026 sales.\n\nAt $36.12 the shares sit 41.9% above their 2026-08-14 level, so the market has already paid for the third-quarter beat and for holiday sales that have not yet been reported.\n\n## Bull Case\n\n- **Disney dolls and role-play drove growth.** Dolls, role-play and dress-up sales rose 29% to $119 million in the third quarter, the company reported on 2026-10-22. On the call that day, management said Disney Princess and Frozen ran ahead of its expectations.\n- **Profits grew faster than sales.** Operating income rose 27% to $37.4 million and net income 50% to $29.9 million. Adjusted earnings per share were $2.68, against $1.80 a year earlier and a $2.33 consensus estimate compiled by Benzinga (2026-10-22).\n- **Both big retailers bought more.** The third-quarter 10-Q shows nine-month sales to Walmart of $139.5 million, up from $119.6 million, and to Target of $136.4 million, up from $120.4 million.\n- **Holiday point-of-sale data was strong.** On the 2026-10-22 call, management said point-of-sale (POS) data at its two largest retail accounts was tracking up by double digits.\n- **Award finalists support holiday lines.** The Toy Foundation's 2026-11-07 list of 122 finalists for the 2027 Toy of the Year awards includes Super Mario Yum Yum Yoshi!, Disney Princess Magical Light & Style Rapunzel and the Disney Darlings Winnie the Pooh doll. Winners are due in February 2027.\n- **Cash up, inventory down.** Cash including restricted cash was $45.1 million on 2026-09-30, up from $27.8 million a year earlier, per the 10-Q. Inventory fell to $63.8 million from $71.5 million.\n- **New licences and a heavier film slate.** The 2026-11-10 to 2026-11-12 agreements add anime, 'Invincible' and 'K-Pop: The Debut' to the line-up. On the 2026-10-22 call, management cited Sonic the Hedgehog 4 in March 2027, a Simpsons film in September and Frozen 3 in November.\n\n## Bear Case\n\n- **The 2025 comparison was easy.** Management said on 2026-10-22 that the 2025 third quarter suffered from delayed planogram sets (retailers' shelf-layout resets) and higher US tariffs. That flatters the 20% growth rate.\n- **No new film support this holiday.** The company said on 2026-10-22 that no new entertainment release supports its toy business in the fourth quarter. Existing licences and private-label lines have to carry the season.\n- **Two customers carry the business.** Target and Walmart were 27.3% and 27.9% of nine-month 2026 net sales, per the third-quarter 10-Q. A cautious reorder from either one moves the whole quarter.\n- **Input and freight costs are rising.** On the 2026-10-22 call, management said higher resin and diesel prices are raising product and freight costs. Third-quarter gross margin was 32.1%, up only 10 basis points.\n- **International sales are shrinking.** International sales fell 4% to $45 million in the third quarter while North America rose 28% to $209 million, the company reported on 2026-10-22.\n- **The price has run ahead of sales data.** The shares rose from $32.99 on 2026-11-05 to $36.12 on 2026-11-12 with no new sales figures. The licence announcements of 2026-11-10 to 2026-11-12 come without disclosed financial terms and relate to 2027 products.\n\n## Setup & Price Structure\n\nThe shares closed at $36.12 on 2026-11-12, 3.6% below the 52-week high of $37.45 set intraday on 2026-11-11. The 52-week closing low was $15.01 on 2025-11-20. The 3-month reference close was $25.70 on 2026-08-14.\n\nRecent closes: $32.99 on 2026-11-05, $33.64 on 2026-11-06, $35.56 on 2026-11-09, $36.39 on 2026-11-10, $36.76 on 2026-11-11 and $36.12 on 2026-11-12. The 2026-11-12 close is the first lower close in that run. The 2026-11-05 close of $32.99 is the nearest recent price floor.\n\nThe 2026-11-12 close is above the 50-day average of $28.28 and the 200-day average of $23.48, both from adjusted daily closes. The gap to the 50-day average is wide, which fits a stock that has re-rated on one earnings report.\n\nSEC Form 4 filings show no open-market insider sales. On 2026-10-27, CEO Stephen Berman reported exercising options on 91,874 shares at $30.52 and 49,475 shares withheld for tax; CFO John Kimble reported exercising options on 20,994 shares at $30.52 with 11,306 withheld. The board declared a $0.25 quarterly dividend, payable 2026-12-28 to holders of record on 2026-11-27.\n\n## Catalyst Calendar\n\n- **2026-11-27:** Black Friday and dividend record date. The first big holiday sales weekend tests whether double-digit POS growth at Target and Walmart holds without a new film tie-in.\n- **2026-11-30:** Cyber Monday. Online holiday sales give a second early read on demand for licensed dolls, role-play and Nintendo lines.\n- **~2027-02-15 (est.):** Fourth-quarter and full-year 2026 report. Shows whether holiday sales and margins held against higher resin and freight costs, and how Halloween costume sell-through and returns settled.\n\n## What Would Change Our Mind\n\nA daily close below $25.42, the 2026-08-28 adjusted close, which would erase the late-summer advance and the third-quarter beat. Fourth-quarter net sales below the year-earlier level, or negative holiday sell-through at Target or Walmart, would also break the case.\n\nThe risks this note tracks, each with what would confirm it:\n\n- Holiday sell-through fades without new entertainment support, and retailers cut reorders. Confirmed by: Management reporting negative fourth-quarter POS at Target or Walmart, or fourth-quarter net sales falling from a year earlier.\n- Resin and diesel costs squeeze fourth-quarter margins. Confirmed by: Fourth-quarter gross margin reported well below the third quarter's 32.1%, with management citing input or freight costs.\n- Customer concentration amplifies any single retailer's caution. Confirmed by: Sales to Target or Walmart falling from a year earlier in the full-year 2026 10-K customer table.\n- US tariff policy on toys made in China tightens again. Confirmed by: A new US tariff increase on Chinese-made toys announced before the 2027 order season.\n- International weakness spreads beyond the third quarter. Confirmed by: International sales down from a year earlier again in the fourth quarter, after the 4% third-quarter drop.\n- Expectations built into the 41.9% three-month gain outrun what holiday sales and the new anime and licence programmes deliver. Confirmed by: Holiday-period commentary from Target, Walmart or JAKKS showing flat or lower toy sell-through after the 2026-11-27 weekend.\n\n## Correlation Notes\n\nJAKKS trades as a small-cap consumer discretionary toy stock. Its results tend to move with US holiday spending reads, Target and Walmart traffic, and tariff news on Chinese-made toys, the same forces that move Mattel and Hasbro. Its licence mix ties it more closely to the Disney, Nintendo and Sega film calendars than the larger toy companies. With Target and Walmart at 27.3% and 27.9% of nine-month 2026 net sales, per the 10-Q, either retailer's holiday commentary is likely to move the shares more than broad index moves do.", "first_seen": "2026-11-10", "last_analyzed": "2026-11-13T01:03:52+00:00", "last_synthesized": "2026-11-13", "date_modified": "2026-11-13", "license": "Content © FrontierPicks. Cite the canonical URL." }