JAKKHIGH SIGNALFINANCIAL10-K

JAKK experienced severe profitability deterioration with net income plummeting 71% and operating cash flow collapsing 78% despite maintaining customer relationships with Target and Walmart.

The dramatic decline in profitability metrics signals fundamental operational challenges that go beyond normal cyclical toy industry fluctuations. While the company maintained its key retail relationships and expanded internationally, the inability to convert sales into cash flow suggests significant margin pressure or working capital management issues that investors should closely monitor.

Comparing 2026-03-02 vs 2025-03-06View on EDGAR →
FINANCIAL ANALYSIS

JAKK's financial performance deteriorated significantly with revenue declining 14% to $331M while profitability collapsed disproportionately - net income fell 71% and operating cash flow dropped 78% to just $8.5M. The company partially deleveraged by reducing debt 30% and inventory increased 13%, but cash reserves declined 25%, creating a concerning picture of weakening operational efficiency and cash generation despite maintaining major retail partnerships.

FINANCIAL STATEMENT CHANGES
Operating Cash Flow
Cash Flow
-78.2%
$38.9M→$8.5M

Operating cash flow fell 78.2% — earnings quality concerns; investigate working capital changes and non-cash items.

Net Income
P&L
-70.9%
$33.9M→$9.9M

Net income declined 70.9% — review whether driven by operations, interest costs, or non-recurring items.

Operating Income
P&L
-64.2%
$39.7M→$14.2M

Operating income deteriorated sharply — investigate whether driven by one-time charges or structural cost issues.

Interest Expense
P&L
-57%
$1.1M→$471K

Interest expense declined — debt repayment or refinancing at lower rates improving earnings quality.

Total Debt
Balance Sheet
-30.1%
$98.5M→$68.9M

Debt reduced 30.1% — deleveraging strengthens balance sheet and reduces financial risk.

Cash & Equivalents
Balance Sheet
-25.4%
$69.9M→$52.2M

Cash decreased 25.4% — monitor burn rate and upcoming capital needs.

Revenue
P&L
-13.7%
$384.0M→$331.2M

Revenue softened 13.7% — monitor whether this is cyclical or structural.

Inventory
Balance Sheet
+13.3%
$52.8M→$59.8M

Inventory built 13.3% — monitor whether demand supports this build or if write-downs may follow.

Gross Profit
P&L
-13.1%
$213.0M→$185.1M

Gross margin compression — rising input costs, pricing pressure, or unfavorable product mix shift.

LANGUAGE CHANGES
NEW — 2026-03-02
PRIOR — 2025-03-06
ADDED
Our two largest customers are Target and Walmart , which accounted for 26.6% and 26.1%, respectively, of our net sales in 2025.
In 2025, our sales generated outside the United States were approximately $154.1 million, or 27.0% of total net sales.
We currently utilize warehouses in the United Kingdom, Germany (opened in 2025), Italy, Belgium and Spain (the latter two opened in 2024) to support sales expansion in Europe.
Total retail sales of toys, excluding video games, in the United States, were approximately $30.3 billion in 2025.
Our two largest customers are Target and Walmart , which accounted for 26.6% and 26.1%, respectively, of our net sales in 2025.
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REMOVED
Our three largest customers are Target , Walmart and Amazon , which accounted for 29.6%, 24.2% and 10.6%, respectively, of our net sales in 2024.
In 2024, our sales generated outside the United States were approximately $146.0 million, or 21.1% of total net sales.
In 2020, we migrated from a distributor model to selling direct in Spain, Italy, France and Mexico.
We currently utilize warehouses in the United Kingdom, the Netherlands, Italy, Belgium and Spain (the latter two opened in 2024) to support sales expansion in Europe.
Total retail sales of toys, excluding video games, in the United States, were approximately $28.3 billion in 2024.
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