Why JAKKS Pacific Stock Popped by Almost 24% on Friday
Key Points
It surprised on the upside with a much narrower-than-expected quarterly net loss.
It also stands to benefit from a much more favorable tariff regime.
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JAKKS Pacific (NASDAQ: JAKK) published its fourth-quarter and full-year 2025 figures just after market close Thursday, and the investor response the following day was extremely positive. Market players piled into the veteran toy company's stock, pushing it to an impressive gain of nearly 24%.
Not playing around
Across the quarter, JAKKS's net sales were slightly over $127 million. Although this represented a year-over-year decline of 3% for the consumer discretionary company, it handily beat the average analyst estimate of $117 million and change.
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Meanwhile, the company significantly narrowed its net loss not in accordance with generally accepted accounting principles (GAAP), whittling it down to $2 billion ($0.18 per share) from fourth-quarter 2024's $7.4 million deficit. This meant a crushing beat on the prognosticator consensus, which was a loss of 0.94 per share.
The top-line decline was due to a 28% drop in costume sales, JAKKS said. However, at barely over $9 million in revenue for the fourth quarter, this is by far the smaller of the company's two main business lines. Toys and consumer products, the other, was basically flat year over year with sales of $118 million.
It won't miss tariffs anytime soon
In its earnings release, JAKKS CEO Stephen Berman addressed the "downward pressure" of the federal government's tariff policy as 2025 came to a close. Given that these levies might be melting away considerably soon, it's little wonder that investors are bullish on the company again. Personally, I don't see significant growth opportunities for JAKKS, but the recent tariff news is certainly positive. I'd be mildly optimistic on this company's future.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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