What they do
JAKKS Pacific, of Santa Monica, California, designs and sells toys, costumes and consumer products around the world, under its own brands such as Disguise and Moose Mountain and, mostly, under licenses for entertainment properties.
Why we picked it
- 01+20%
Sales grew. Net sales in the quarter to 30 September were $254.2M, up 20% from $211.2M. North America was up 28% to $209M, while international slipped 4% to $45M from $47M; for the year to date, international is up 7%.
- 02+27%
Operating profit grew faster. Operating income rose 27% to $37.4M, and net income to $29.9M, or $2.48 a diluted share, from $19.9M, or $1.74. Part of the net income gain came from a lower tax charge, $7.7M against $9.8M.
- 03$44.0M
A stronger balance sheet. At 30 September the company had $44.0M of cash and no borrowings, against $25.9M of cash a year earlier, and inventory was $63.8M against $71.5M. Operating cash flow in the first nine months was $17.4M, against an outflow of $24.8M a year earlier, helped by $11.1M of tariff refunds and related interest received in the first half.
- 043.3%
Cash goes back to holders. The board declared a $0.25 quarterly dividend, payable 28 December, about 3.3% a year at the 23 October close.
The risk
The catch: toys are seasonal and the September quarter is the biggest. The company lost $5.7M at the operating line in the first half of 2026 (nine-month operating income was $31.7M, against $37.4M in the third quarter alone); the half ended with a small net profit of $1.6M only because of other income, mostly $6.8M of the tariff refunds booked there. Full-year 2025 sales fell 17% to $570.7M from $691.0M, and net income fell to $9.9M from $34.2M. International sales slipped 4% in the quarter (they are up 7% for the year to date), much of the range rests on licensed entertainment properties (ro
The full analysis
JAKKS Pacific ($JAKK): sales up 20%, operating profit up 27%, and no borrowings
Our view: bullish, because third-quarter sales grew 20%, operating income grew 27%, the company ended September with more cash than a year ago and no borrowings, and it pays a $0.25 quarterly dividend.
The thesis
JAKKS Pacific, of Santa Monica, California, designs and sells toys, costumes and consumer products around the world, under its own brands such as Disguise and Moose Mountain and, mostly, under licenses for entertainment properties. Our case is simple: after a weak 2025, sales are growing again in the quarter that matters most, operating profit is growing faster than sales, and the balance sheet is stronger than a year ago.
The evidence
Sales grew. Net sales in the quarter to 30 September were $254.2M, up 20% from $211.2M. North America was up 28% to $209M, while international slipped 4% to $45M from $47M; for the year to date, North America is up 14% and international 7% (Q3 release, Oct 2026).
Operating profit grew faster. Operating income rose 27% to $37.4M, and net income to $29.9M, or $2.48 a diluted share, from $19.9M, or $1.74. Part of the net income gain came from a lower tax charge, $7.7M against $9.8M; income before taxes rose 27% (release).
A stronger balance sheet. At 30 September the company had $44.0M of cash and no borrowings, against $25.9M of cash a year earlier, and inventory was $63.8M against $71.5M. Operating cash flow in the first nine months was $17.4M, against an outflow of $24.8M a year earlier, helped by $11.1M of tariff refunds and related interest received in the first half (release; 10-Q, Jul 2026). It has a $70.0M revolving credit facility to June 2030 (10-Q, Jul 2026).
Cash goes back to holders. The board declared a $0.25 quarterly dividend, payable 28 December to holders of record on 27 November (release).
What the market is missing
At the 23 October close of $30.52 the company has a market value of about $349M on 11.4M shares, and four dividends at the current rate come to $1.00 a share, about 3.3% of the price. Directors and executive officers owned 4.2% in April 2026; the largest holder, Lawrence I. Rosen, owned 16.6% (proxy, Apr 2026).
The risks
Toys are seasonal and the September quarter is the biggest. The company lost $5.7M at the operating line in the first half of 2026 (nine-month operating income was $31.7M, against $37.4M in the third quarter alone); the half ended with a small net profit of $1.6M only because of other income, mostly $6.8M of the tariff refunds booked there. Full-year 2025 sales fell 17% to $570.7M from $691.0M, and net income fell to $9.9M from $34.2M (10-K, Mar 2026). International sales slipped 4% in the quarter (they are up 7% for the year to date), much of the range rests on licensed entertainment properties (royalty expense was 16% of third-quarter sales), and the diluted share count rose to 12.1M from 11.4M a year earlier.
What would change our mind
A weak fourth quarter that gives back the third quarter's gains, international sales turning down for the year, borrowings returning without a matching rise in sales, or the loss of a major license.
Sources: JAKKS Pacific third-quarter 2026 results release (22 Oct 2026, filed 23 Oct 2026); 10-Q for the quarter to 30 June 2026 (31 Jul 2026); 10-K for 2025 (2 Mar 2026); proxy statement (22 Apr 2026); close from Yahoo Finance and Nasdaq, 23 Oct 2026.
By the numbers
| Quarter | Revenue | Gross margin | Net income | Cash | Debt | Diluted shares | Filing |
|---|---|---|---|---|---|---|---|
| Q3 2630 September 2026 | $254.2M | 32.1% | $29.9M | $44.0M | n/a | 12.1M | 8-K, 23 October 2026 |
| Q2 2630 June 2026 | $139.2M | 32.3% | $5.9M | $59.5M | n/a | 11.9M | 10-Q, 31 July 2026 |
| Q1 2631 March 2026 | $106.7M | 33.4% | -$4.3M | $62.8M | n/a | 11.4M | 10-Q, 1 May 2026 |
| Q4 25*31 December 2025 | $127.1M | 31.0% | -$5.3M | $52.2M | n/a | n/a | 10-K, 2 March 2026 |
| Q3 2530 September 2025 | $211.2M | 32.0% | $19.9M | $25.9M | n/a | 11.4M | 10-Q, 31 October 2025 |
| Q2 2530 June 2025 | $119.1M | 32.8% | -$2.3M | $38.2M | n/a | 11.1M | 10-Q, 1 August 2025 |
| Q1 2531 March 2025 | $113.3M | 34.4% | -$2.4M | $59.2M | n/a | 11.1M | 10-Q, 30 April 2025 |
Source: the company's 10-Q and 10-K filings on SEC EDGAR, as tagged in their XBRL data. Each quarter uses the most recent filing that reports it, so restated quarters compare cleanly. Quarters are labelled by the calendar quarter they end in. Debt is current plus long-term debt; net income is as reported, including any discontinued operations. *Fourth quarter: the full year in the 10-K less the first nine months. n/a: not reported for that quarter on its own.
Insiders
All directors and executive officers as a group (7 persons) own 4.2% of the shares (Stephen Berman 2.6%, John Kimble 1.5%; the largest holder, Lawrence I. Rosen, 16.6%), according to the DEF 14A filed 22 April 2026.
What to watch
- 28 December 2026
Payment of the $0.25 quarterly dividend to holders of record on 27 November. Q3 2026 results release
- By 9 November 2026
The 10-Q for the September quarter, with the full notes (due 40 days after the quarter end for an accelerated filer). June-quarter 10-Q cover (accelerated filer)
Sources: Q3 2026 results release (22 Oct 2026), June-quarter 10-Q, close 23 Oct 2026.
Market value: shares outstanding on the latest SEC filing cover page, times the latest price.