JAKKS Slashes 2011 Outlook - Analyst Blog
19 Dezembro 2011 - 8:15AM
Zacks
Malibu, California-based
JAKKS Pacific Inc (JAKK) recently
slashed its sales and earnings outlook for fiscal 2011, owing to
the tough retail sales environment amidst the crucial holiday
season. The company’s results were also unimpressive as it had to
bear the brunt of increased markdown allowances and royalty
expenses related to license guarantee shortfalls.
For 2011, the company lowered its
net sales forecast to $660 million from the previous range of $770
million to $775 million and adjusted earnings guidance to 37 cents
to 40 cents from the earlier projection of $1.32 and $1.35 per
share.
Management is apprehensive about
the remainder of 2011 based on a host of factors including cost
inflation, increased pricing pressures, transportation costs and
higher costs for many manufacturers operating in Asia that will
likely affect production and shipment. This was quiet
disappointing; and as a result, the company’s share price fell 10
cents to close at $17.45 on Friday.
The Zacks Consensus Estimate for
the fourth quarter of 2011 and fiscal 2011 are pegged at 39 cents
and $1.33, respectively. We expect estimates to go down in the
coming days as the company reduced its fiscal 2011 guidance based
on the weak retail sales environment for the upcoming holiday
season.
However, one of the major
initiatives for JAKK in 2012 is Monsuno. This is an animated
Japanese television series, likely to come on air in spring 2012.
Based on this television venture, the company has developed a
complete Monsuno toy line and plans to launch it next year. Many of
the company’s other product launches in 2012 look strong. One such
initiative is Winx Club, which is an eminent fashion doll in
European markets. With Nickelodeon launching the property in the
U.S., the line is set to hit the market in fall 2012. Management
remains optimistic on Action Cam, a small video camera that can be
attached to bicycles, surfboards, skateboards, etc. Further,
Tollytots expects to see continued strong growth in 2012 with core
large dolls and accessory categories including My First Disney
Princess, Graco and Fisher-Price lines. The company estimates 2012
to be more lucrative in terms of other releases including Slug
Zombies, Train World, Baby Watch and Pawggles.
JAKKS, which competes with
Mattel Inc.(MAT) and Hasbro Inc.
(HAS), is expected to report its fourth quarter 2011 results on
February 13, 2011.
JAKKS Pacific currently retains a
Zacks #3 Rank, which translates into a short-term Hold rating. We
are also maintaining our long-term Neutral recommendation on the
stock.
HASBRO INC (HAS): Free Stock Analysis Report
JAKKS PACIFIC (JAKK): Free Stock Analysis Report
MATTEL INC (MAT): Free Stock Analysis Report
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