Shares of Jakks Pacific are surging after the company announced better than anticipated earnings for the second quarter and successfully retired over $30 million in debt. The stock is up 8.8% in after-hours trading, currently at $19.43. Over the past year, however, shares had experienced a 20% decline.
In the same quarter last year, the toy and consumer-products manufacturer recorded a profit of $26.6 million, or $2.61 per share. This year, the company posted a profit of $6.5 million, or 58 cents per share. After adjusting for one-time items, the adjusted earnings came in at $1.26 per share, surpassing the analysts’ expectations of 51 cents per share, according to a FactSet poll.
Furthermore, Jakks Pacific witnessed a significant improvement in its gross margin, which amounted to 30.7%. This indicates a 310 basis point increase compared to the previous year’s second quarter.
To the company’s credit, it retired $30.2 million in debt during the quarter, four years ahead of maturity. This debt reduction has alleviated at least 11% of the company’s interest burden.
The positive financial results and prudent debt management demonstrate Jakks Pacific’s commitment to improving its financial health and delivering value to its shareholders.