Jakks’ Profit Warning Wounds Its Stock

Toy company Jakks Pacific Inc. said it expects to report third-quarter earnings of 45 cents to 51 cents a share, well below analysts’ average forecast of 62 cents, due to slower sales of its World Wrestling Federation toys. The warning caused Jakks stock to plunge $4, or 25%, to close at $12.25 on Nasdaq. Third-quarter net income is expected to range between $9.2 million and $10.3 million on revenue of $90 million to $95 million, the company said. In last year’s third quarter, Malibu-based Jakks reported net income of $7.6 million, or 44 cents a share, on sales of $60.2 million. It attributed the slowdown to a general softness in the toy industry and to some retailers stocking fewer wrestling toys. Jakks said it has made progress in diversifying its product line during the third quarter to become less reliant on toys patterned after WWF personalities.