Good afternoon, and thank you for joining us. We are roughly 2 months from the end of 2 thousand 26 and feeling positive about our execution this year, as well as feeling positive about the possibilities that lie ahead. Q3 shipping generated $254 million in net sales, a 20% increase over a prior year that featured delayed planogram sets and higher US tariffs. Year to date, our sales are up 13% ahead of last year, The FOB business model is alive and well, representing over 75% of sales for the first 9 months of the year.

We are also seeing buying patterns return to pre tariff quarterly seasonality, With much of the year now behind us, we are now working with customers to ensure solid sell through, and firming up plans for what we feel can be a great 2027. Although we are not supporting any new entertainment releases in the toy business this holiday season, Growth was nonetheless driven by North America which was up 28% in the quarter, and is now plus 14% year to date. International took a breath after a strong first half of the year.

Europe was marginally up with the other regions in total down, netting out 4% down in the quarter but international is still up 7% year to date and queued up for a solid Q4. Our dolls, role play, dress up business led the quarter with 29% growth and is now plus 7% year to date. We are seeing great growth here with our Disney business leading the way. Retail point of sale rates at our 2 largest accounts continue to track up in the double digits here both in the quarter and year to date.

The action play and collectibles division continued its strong year as well. With a 19% growth in the quarter driven by the success of the Super Mario Galaxy film and our core Nintendo evergreen business. Comparable POS data was roughly flat in the quarter as we compare against the Sonic 3 Sonic DC crossover initiatives from last year. it is up mid single digits year to date. Overall, toys and consumer products shipping was up 23% in the quarter and plus 13% year to date.

So we feel we have done a solid job maximizing this year's opportunities for a robust holiday selling season. Our costumes business had a solid quarter as it continues to recover from last year's disruptions. At $62 million in the quarter, and $111 million year to date, we are tracking slightly ahead of 2024. Most of our US accounts were up double digits this year, but we also are pleased with the traction we are seeing in Europe opening new accounts, and generating more of a year round business given the broad different selling opportunities there.

Having just returned from parts of Asia last week, I could speak firsthand about the challenges factories are facing from higher resin prices putting pressure on product cost, and higher diesel prices impacting the supply chain both for ocean and land freight. We are prioritizing shipments and continuing to scrutinize our inventory management to mitigate these higher costs of doing business. We have been working extremely closely with our manufacturing partners in Asia allowing us to work through these various issues.

Many of these factories have been partners of JAKKS for decades, and these long standing relationships allow JAKKS to work expeditiously through these events when they occur. I will now pass it over to John for some comments after which I will come back and discuss some product initiatives and areas of focus moving forward. John?

Thank you, Steven, and hi, everybody. it is an interesting quarter to report on here as the numbers come together pretty much as we would have hoped they would. Some Q4 sales work their way into Q3 this year, but as a FOB centric business, that will happen. It just means we will get paid that much faster. In some respects, our fiscal year should almost be November through October, but we are not going to make that change and punish ourselves or anyone else with that exercise.

Overall, we continue to collectively color within the lines as it relates to the full year plan. It may not be the biggest or best this or that, it is a considerably better year than 2025 and a really good year in financial front as far as the printed results. As of late October, we are getting close to the finish line of delivering in 2026 a profitable cash generating dividend paying fiscal year. What is harder to measure and often communicate is that we are doing a better job seeing down field and building towards a bigger and more efficient business.

Admittedly, there is always steady dialogue around potentially acquiring new licenses, or launching new brands. I think we are spending more time every quarter figuring out ways to run the business better, for lack of a better word, We are tuning the organization and our internal processes to increase efficiency and execute globally, while maintaining a fast decision making culture and, hopefully, some thoughtful precision around the financial implications. People who think that the only value generated in a particular year is reflected in that year's financial statements do not really understand how businesses like this function.

And although I felt 2025 was a very productive year, despite its short term financial challenges, I think you are starting to see some of the financial results this year and next. Ideally, we can keep accelerating this momentum. 20% higher sales delivered 20% more gross margin dollars, so we are pleased with that. As a reminder, there is not really a lot of gross margin scale to be had with our business. Tooling is a relatively tiny part of gross margins, and you do not get scale from royalty shortfalls unless you avoid them.

As Steven mentioned, there continues to be pressure on product and freight costs. Although The U. S. Tariff discussion seems to be trending in a favorable direction, definitive guidance on that front is still pending. We are navigating as best as we can and managing for dollars as I have said before. Gross margins held up well in the quarter at 32.1%, slightly higher than last year's 32%. Selling expenses were a bit higher in the quarter as they likely will be next as we dial up our promotional activity, particularly compared to last year when we were pulling back given sales volumes.

G&A costs were higher in aggregate, but achieved some scale on higher volumes. We are continuously reevaluating overhead spending. Vendor by vendor to self fund new initiatives and needs, but the overall higher cost of doing business is relatively unavoidable. Adjusted EBITDA in the quarter was $44.4 million an improvement over $36.5 million in Q3 last year. That increases our 12-month trailing adjusted EBITDA to $45.7 million up from $37.8 million last quarter.

Adjusted EPS for the quarter was $2.68, That compares favorably to $1.80 at this time last year. Year to date, we are at $2.81. Versus $1.79 year to date last year. On the balance sheet, we finished the quarter at $45 million in restricted and unrestricted cash compared to $28 million at the same time last year, Our inventory balance at the end of the quarter was $64 million compared to $71 million last year That reflects a slightly higher balance outside The US than it did at this time last year.

Lastly, the board has approved the quarterly cash dividend of $0.25 per share. Dividend will be payable to shareholders of record as of November 27. And will be paid on December 28.

And now back to Steven for some additional commentary. Thank you, John. We are about a week away from Halloween, so we should lead off with the costume business. Retail buyers were energized after last year's disruption, while also being optimistic about a robust film slate and Halloween falling on the weekend. To no 1's surprise, Netflix K-Pop Demon Hunters has been in high demand and is a property that retailers are chasing.

We have also seen a content lift from Disney's Descendants 5 and Pixar's Toy Story 5 while our core Super Mario line is also up considerably as it is been a very big year for Nintendo across all categories. We are seeing growth in Sonic the Hedgehog as its robust content slate continues to increase the size of the Sonic franchise base. We are also seeing some solid demand for Harry Potter as Warner Brothers commemorates the 20 fifth anniversary of the first theatrical release and begins a promotion the HBO series that is launching this December.

We are steadily adding rights to our costume and cosplay portfolio where it makes strategic sense. Especially as licensors listen to the retailer's feedback that we are the vendor they prefer to work with. Our Disney Princess and Disney Frozen business continues to have a strong year. They are exceeding our expectations more than anything else in our portfolio in 2026. Our ages and stages large dollar lines style collection role play toys, and dress up are all performing well.

Key customers have been going deeper with our line this year and it is paying off for both of us. We could also see where some lower retail price points compared to last year are coinciding with increased unit sales. Which is great and bodes well going into the holiday season. We are also seeing a very strong initial numbers for our Disney Princess magical light and style Rapunzel. This toy from a large doll subcategory is on path to be a hot item this holiday season.

Get yours early. On the action figure front, we are continuing to support the Super Mario Galaxy film with retailer-exclusive products and add-aisle placement for key SKUs. The Bowser Junior Panda playset, Yum Yoshi, and Donkey Kong playset are the key drivers that we are supporting with paid media. The film has been available on Peacock TV since late July and will debut on Netflix in early December to further extend its reach.

As mentioned last quarter, we are continuing to celebrate Sonic's 30 fifth anniversary with a variety of products and special packaging. Among the toys we have developed, the giant metal sonic versus sonic playset. Launched in Q3 and is featured at retailers globally and in holiday gift guides. You can find the commercials online to get a better sense of the fun factor in this toy. And, obviously, we will have more to say about Sonic next quarter as we get closer to the March 2027 theatrical release of Sonic the Hedgehog 4.

Fashion dolls have played an important role in JAKKS' history. Dating back to our success with Disney's Hannah Montana, Taylor Swift, Disney Fairies, which is Tinkerbell and her friends, and Winx Club, just to name a few. As we mentioned last quarter, we introduced a new collector doll segment in a partnership with Warner Brothers. The next collection just dropped with slightly different inspirations. Titled Dollhouse of Dread.

It introduces a bold new line that transforms horrors most feared figures into high style display worthy collectibles. Launching exclusively at Walmart and walmart.com, this horror fandom reimagined awakened some of the most powerful vocal obsessive fan bases. The lineup features dolls inspired by 4 chilling icons. Ghostface, as seen in the motion picture Scream, Jigsaw the puppet from Saw, Jason from Jason Universe franchise, and Pinhead from Hellraiser.

The line was introduced this month at New York Comic Con selling out inventory following a live video sale in Walmart collector booth in a collaboration with a celebrity named Jamie Kennedy. The Warner Brothers doll collection and dollhouse of dread marked the first chapter in a broader vision for Dollhouse as a unified collector destination. Beyond these debut collections, dollhouse will expand into a house of subcategories spanning fandom driven properties.

Exclusive entertainment collections, and powerful collaborations all designed to build a lifestyle destination for collectors, rather than a single product line. As the platform grows, JAKKS plans to deepen the collector experience throughout direct to consumer exclusives, behind the scenes content, and a growing presence at conventions and events. The website spelled dollhousehq.com. Launched this month alongside social channels.

Separately, a private label business with Walmart through My Sweet Love and my life as brands has been steadily expanding. A new assortment set this quarter with 4 basic and deluxe fashions in MyLifeAs, and 6 nurturing role play items and baby doll fashions in my sweet love, doubling the listings from prior year. All 3 new items are in our top 20 items at Walmart and the stroller is our No. 1 overall new item there for fall of 2026.

As we look ahead, to 2027 and beyond, we could not be prouder or more excited about the lineup across our categories and divisions. Our recent Fall 2027 previews drew an enthusiastic response from customers around the globe. We have several exciting announcements coming soon, and 2027 brings a slate of strong theatrical tent poles. Including Sonic the Hedgehog 4 in March, the new Simpson movie in September, and Frozen 3 in November.

In addition, our Halloween role play and cosplay division disguise has a powerful lineup built on strong IP for 2027 and beyond. JAKKS Pacific is also launching a long term strategic initiative focused on immersive IP across anime, manga, VTubers, and digital entertainers. The IP partners and titles debuting next year are simply the best in class. We have held numerous retail meetings across The United States, Europe, and Latin America in preparation for our initial launch.

Feedback from both partners in retail and consumers has been highly enthusiastic and extremely encouraging. This year is yet another reminder that a lot can change in a short period of time in our industry. Although events outside our industry continue to be intriguing, to make the business of making and selling toys more complicated than perhaps it needs to be, we are heading into the end of the year with solid momentum both in terms of our commercial performance to date and the foundation-building for 2027 and 2028 and beyond.

I continue to feel extremely confident in our business today, where we are headed, and the opportunities we see both ahead of us and within reach. And now I will take a couple questions. Operator?

Thank you, Eric. Good afternoon.

Thank you for the call, Eric. So the expansion is happening, quite aggressively. We already have a phenomenal footprint in the MEA. But we are growing deeper in certain territories. We are staffing up for it as we have been this year. The main opportunities are obviously in EMEA, and then it grows in Latin America and Southeast Asia. But for the time being, we have been growing strong in both LatAm offices in Mexico, Chile, and various other countries and territories with our staffing that is specifically for JAKKS and focuses on JAKKS products.

We are we are expanding in that area in Latin America through various initiatives. The mass market, which are main retailers, and then the informal market, which is called the outskirt market. that is a very big market with lower priced items. So it is taken us a year and a half to develop the items that were necessary for the value chain and work with our licensors and our retailers And that has started to bear some very strong fruits and looking into 2027, it will grow quite strong.

The same for Europe and outside of Europe, we are expanding with further staffing required with regards to getting growth as we have really penetrated through the mass market in those countries. But the further growth is going through all the secondary value channels in those territories. We have opened up warehouses and further deepen our reach and further in Italy, Spain, Germany, UK, Rotterdam. We have warehouses and distribution centers that allow us then to be able to make quick deliveries to the individual markets where the products are being sold.

So those areas are seeing expansion, and the right that we are obtaining through our rights are included in a lot of these new territories that we never had before. So on. You have the new territory distribution or enhanced distribution plus more IP and products that are deliverable to those territories. So that will enhance the growth in those areas immensely going to 27 and 28.

So for instance, there is a the way that the international works is slightly different than the states. So we have. In North America, disguise, which is really a Halloween centric business. But in Europe and Latin America, it is everyday play. So it gives us full year of dress up. Vastly different than we do in America through disguise. In America, we utilize each of our segmentations to do the dress up. So there are just these Disney group does their own, and each of our individual areas does their own.

But in Europe, we do it vastly different based off of the criteria because Halloween is not strong in certain areas, and you have boxing day. You have kids day. You have various carnival that really attracts the consumers in, EMEA more so. And then primarily on the international business is about. I am gonna. John could correct me if I am wrong. About 990% FOB or 85% FOB And. But the difference is we are building domestic capabilities as the lead times to ship FOB to Europe in certain areas.

Take longer than it does to get to America. So the backup inventory that we have on, we call it, the main core business is helping us get additional growth in those territories for an FOB business. Only do so much that when you get to the holiday season, you do need some backup. On the margin, I think I will leave that to John I believe it is equal, but I will leave it to John.

Yeah. Hi, Eric. I think on the margin front, the simplest way to think about it is that it is comparable to The US. You know, it is not unlike The US have some resellers who operate on a tighter margin than others. And part of our playbook for The States to begin with is to make sure that we are, you know, developing great product for the consumer that is also kinda working for the customer. The form of the retailer in terms of what their margin requirements are.

As we have gone deeper in that direction over the past couple years, particularly this sort of cap, capture more of the value channel opportunity, which is such an emerging force in US retail. You know, that kinda serves us well, when it comes to international markets. Both in terms of markets that have kinda lower GDP per capita, as well as even the point before, you know, there is a there is a sort of cursory way of entering a market where you are hitting a few big kind of mass market accounts and calling it a day.

We are getting much deeper into a more credible and persistent presence in a lot of these markets. We can have product appropriate for multiple channels. And still doing that while making nice margins.

Thank you. Well, I. We believe that what we are seeing in the market and, again, this company is 32 years old. So we have a lot of history in what we have seen and the changes that we are seeing. I. We are getting I would say, more of the appropriate licenses that we are looking to acquire for the areas in which we are in that help benefit both the licensor as well as JAKKS, our shareholders, and our retailers and consumers But we are getting extremely strong growth in areas that are.

The properties are becoming more fulfilling and they are doing more with less. So at the same time, we are requiring licenses. We are getting I would say, hopefully, the best in class from what we are looking at as a company. And what I am seeing going on now is a lot of people are heavily focusing on the cadult and collectible business, and it is been stated in various conversations. Through various different companies in our industry.

As for JAKKS, we are still a kid centric business, and they are still a very big appetite for, you know, items for children 6 months to 7 years. At the same time, we are in the kidult and adult collectible business in various business that we have been in, you know, for decades. We have been that way with. Nintendo has the collectible business. Sonic has a collectible business. Bendy, Simpsons, a lot of these areas have cadult.

Then you go into the anime, which has a very big focus of adult collectibles, both male and female. So we are in those categories of business, but a lot of our industry is moving away from kids where we are getting more heavily involved in kids. Which has given us much more appeal to the licensors that we are still a very kids focused business, so it is enhancing our business going forward.

Thank you.

Thanks, Eric.

that is a great question. And thank you, Tom. it is just more of timing. We. Throughout. We knew where we were at this year. It was just there was nothing in the sense in this of coming out this year that was really, like, we are gonna see next year with the Sonic and Frozen. You have the Harry Potter show coming out. All those things. But what we are proud about, we saw that, you know, going into the year well before it was here.

And all of the different segmentations that we are focusing on are seeing you know, healthy business go. You know, majority of them all seeing growth in our company. A lot of it was from the segmentation to what the teams have developed. The private label business has grown immensely. Our core Disney business, you know, Disney Princess and Frozen, There has not been any real IP movies or content behind it, and it is seen tremendous growth.

And that has to do with the partnership with the Walt Disney company and with Jack's working on just general IP that enhances the Disney portfolio such as our style collection that we launched years back, you know, 7 years ago, and now it is a very impactful line to our company. Have Disney Darlings, which is a brand new initiative between the Walt Disney Company and Jack's. That focuses on a nurturing baby doll lineup that is doing exceptionally well both in The US and abroad.

So what we have done is we made sure that during an. I would say less popular year of movies or content, our business will have healthy growth. And then when you see a content year that is coming forward in 2027 that just enhances the whole pool to what we are looking at doing at JAKKS.

Well, I think the easiest way to think about that is kinda what you were just touching upon in the last question. In the back half of 24, we had kind of some meaningful entertainment tent poles that we were rallying behind. Right? Like, for memory, was the Moana 2 movie. That came out during that time and also a Sonic 3 movie that came out during that time. And so if you if you reference the chart that we do in the, supplemental earnings deck, which kinda breaks out the content piece, from the evergreen piece You see how, Q3 this quarter was pretty solid and pretty nice evergreen growth.

But, you know, they. To the earlier point, you know, we just not the case that we are supporting a huge movie in the fall. Other than we obviously are still supporting Mario Galaxy in a big way.

Yeah.

Toys R Us is a lovely name and a lovely company and is doing it is being licensed out to a company that we are very familiar with, the name, and they are opening up the stores throughout the holiday. And it is it is wonderful to see it back and back in the right format. But it is still relatively a small area. I think it is 120 stores that are being opened this year. We are rooting for, you know, it to come back in the way it should be in today's environment.

And the people that are running it are doing a well-done job. So we are very close with them. We are selling them. But they are. Hopefully, they will be able to get further depth, and they will not just be pop ups They will be full time year round. But a lot of them right now are pop ups.

Thank you.

Thanks, Tom.

Ladies and gentlemen, thank you for the call today. We will be doing a lot of follow ups right after this conversation, and we are excited and looking forward to 2027 and resuming speaking to our investors. Thank you very much.