Recently, toymakers are looking to ink deals with popular movie franchises to ramp up their sales, amid a gloomy macroeconomic backdrop. Consistent with this, Disguise, Inc. — the Halloween costume and accessories unit of JAKKS Pacific, Inc. (JAKK) — recently announced that it has inked a licensing agreement with DreamWorks Animation. The deal will grant Disguise rights to manufacture and sell Halloween costumes and accessories, throughout the United States, based on DreamWorks’ collection of entertainment brands.
The costumes will be based on certain upcoming movie releases based on the popular brands of DreamWorks’ including Penguins of Madagascar, Home B.O.O, Kung Fu Panda 3, How to Train a Dragon 3 and others classic brands like Shrek, Casper, Olivia and Veggietales. These costumes will be available at retailers all over the U.S. for the 2015 Halloween season.
Disguise has historically been a solid performer for JAKKS Pacific. With the new deal, the company will be able to cash in on the popularity that superhero costumes generally enjoy during the Halloween season. In fact, in its most recent quarter, JAKKS Pacific’s revenues rose almost 17% year over year on the back of the high demand for the Disguise Halloween costumes.
The toy industry is currently witnessing a general decline in demand due to macroeconomic uncertainty and children’s shift toward videogames and personal electronic devices. Therefore, these toymakers are striving to secure valuable partnership deals with digital gaming firms and movie franchises.
JAKKS Pacific currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the same industry include Activision Blizzard, Inc. (ATVI), which sports a Zacks Rank #2 (Buy). However, in the broader consumer discretionary sector some well performing stocks include Brown Shoe Co. Inc. (BWS) and Iconix Brand Group, Inc. (ICON) carrying the same Zacks Rank as Activision.
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