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WWE News
WWE News: JAKKS CEO reports dramatic changes to WWE product line; preview of WWE's financial report Oct 23, 2008 - 2:57:46 PM
JAKKS Pacific CEO Jack Friedman says the company saw "dramatic" weakness with the WWE and Pokemon line of action figures in the third quarter of 2008 from July to September. The company is still committed to pushing out new lines of action figures, but the success in retail stores is slowing.
"We did say earlier on that we do see a little bit of weakness, nothing dramatic. We would say it was dramatic in both Pokemon and WWE action figures," Friedman said in JAKKS's conference call with investors to report earnings.
He continued: "WWE and Pokemon action figures continue to be good contributors with many new assortments shipping this fall. And while we have continued to go full speed ahead on both of these brands, we have seen a bit of slowing at retail on both of these properties."
Friedman also commented on recent litigation proceedings involving WWE and the JAKKS/THQ joint venture related to WWE's bribery lawsuit against the venture.
"In terms of the WWE case, we're delighted about the results from over the last two years by the decisions of both the Federal Courts and the Connecticut Courts," Friedman said. "We do expect that legal costs will come down in the future."
Caldwell's Analysis: We're going to find out a lot about WWE's ability to weather a financial and economic storm when they report third quarter earnings next month. This is one sign that WWE might have been affected significantly, though, with sales of the usually dependable line of action figures slowing down in retail stores. It's only one factor, but the JAKKS CEO picking out WWE specifically to use the term "dramatic" to describe weaker sales should put investors on notice about potential drop-offs across the board when WWE reports earnings.
FYI: JAKKS is the official toy distributor of WWE's product line until 2010 when WWE and Mattel begin their worldwide distribution partnership. JAKKS will then join with TNA as its worldwide partner. A transcript of the JAKKS conference call can be found on seekingalpha.com.
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