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Can any one patiently explain why JAKK lost over $2 today given this earnings report?

http://biz.yahoo.com/bw/000425/ca_jakks_p_1.html

I'm beginning to have a problem holding down my lunch on this particular roller coaster.

TC
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I don't get it either. I read the news story and then looked at my portfolio and had to do a double take. What gives? Jim.
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Hi,
Well, now that I'm in, I like what I see so far, so I'm figuring to hang around for at least a year.

My take on what's going on, is that all the momentum players that got in at 5 or 8 are getting out now. They fiqure that the price for Jakks cannot appreciate 3-fold again.
Carol
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I don't get it either. I read the news story and then looked at my portfolio and had to do a double take. What gives? Jim.

Perhaps someone with more experience in this stock can answer this better (I've only been in for about 11 months). The only thing I can figure is that it's similar to when CSCO splits. The short termers are anticipating the pre-split runup and then dump the next day. Well, with JAKK it seems like there's a pre-earnings runup (since this little gem has a history of blowing out the numbers) and then the daytraders dump. The smaller float on JAKK accounts for the large percentage swing. Since I've been watching, it seems like the appreciation occurs between earnings reports.

That's just my 0.02 and anyone else is welcome to jump into the kiddie pool here and dispute my hypothesis!


Tellorn
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Can any one patiently explain why JAKK lost over $2 today given this earnings report?

In the conference call, Jack Friedman (CEO) asked the analyst the same question (unbelievably). The analysts reply was that the raw numbers reflected a decrease in gross margins that was not readily explainable. During the CC, a lot of time was spent explaining that JAKK incurred substantial non-recurring air freight charges in order to get some product to the domestic market quickly. Apparently, some little kids couldn't wait to get their hands on some Gooze. The analysts said that Friedman did a good job alleviating concerns, and hinted that the price would rebound.

Of course, the rebound hasn't happened, and JAKK is down today. Why? I'm all out of lifelines.

Mr. T
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During the CC, a lot of time was spent explaining that JAKK incurred substantial non-recurring air freight charges in order to get some product to the domestic market quickly.

in addition to what MrT pointed out about the air freight charges, their were charges due to the closing of the Flying Color distribution and manufacturing plant in Michigan (these operations are in Washington state) also in conjunction with the move the company decided to sell-off the remaining inventory in Michigan at cost to avoid expensive costs in shipping them to the West Coast.

the company feels that going forward margins will stay in the 41-42% range. will that be the case? hope so.

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