JAKKS Pacific reported U.S. fourth-quarter revenues of $86.2 million, down 7.8% year-over-year, while international sales climbed 9.9% to $41 million. Europe held roughly flat and Latin America saw significant gains, but lower retail sell-through and tariff pressures led to a 2.8% decline in total net sales to $127.1 million.

Gross margin improved to 32.4% for the full year, the highest in over 15 years, driven by better factory costing and inventory management. The fourth-quarter adjusted EBITDA loss narrowed to $3.8 million from $10.2 million a year earlier, but full-year adjusted EPS fell to $1.62 from $3.79 and operating margin dropped to 2.5%.

Tariff-related costs of roughly $12 million paid by the company and nearly $50 million borne by U.S. customers pressured order volumes and replenishment. Management avoided sacrificing margin integrity, instead implementing higher pricing to recover tariff expenses and deepening factory and retail partnerships.

JAKKS ended 2025 debt-free with $54 million in cash and about $60 million in inventory, down from $70 million and up from $53 million respectively. The company returned $1.00 per share in dividends, generated over $8 million in operating cash flow, and expects low-to-mid-single-digit top-line growth in 2026 while focusing on margin expansion and major licensed launches.