Core Insights - Funko, Inc. (FNKO) reported third-quarter 2024 results with both revenue and earnings exceeding Zacks Consensus Estimates, despite a year-over-year revenue decline [1][4] - The company achieved a significant increase in gross margin, leading to better-than-expected profitability, prompting management to raise its full-year adjusted EBITDA guidance [1][13] Financial Performance - Adjusted earnings were 14 cents per share, surpassing the Zacks Consensus Estimate of 4 cents per share, and improved from 3 cents per share in the prior year [4] - Net sales were $292.8 million, a decrease of 6.4% from $312.9 million in the previous year, but above the Zacks Consensus Estimate of $289 million [5] - Gross margin expanded by 770 basis points year-over-year to 40.9%, aided by improved inventory reserves [5] - SG&A expenses decreased by 1.4% to $92.7 million from $94 million in the prior year [6] - Adjusted EBITDA rose to $30.9 million from $25.4 million in the year-ago period, with an adjusted EBITDA margin increase of 250 basis points to 10.6% [6] Segment Performance - Core Collectible sales declined by 2.3% year-over-year to $227.8 million, while Loungefly net sales fell by 17.6% to $47.3 million [7] - Other net sales decreased by 20.8% year-over-year to $17.6 million [7] - Geographically, U.S. net sales decreased by 7.4% to $194.4 million, and European sales fell by 9.1% to $74.5 million, while Other International sales increased by 13.5% to $23.9 million [8] Guidance and Outlook - For Q4 2024, management expects net sales between $280 million and $294 million, with a gross margin of 38-40% [10] - Adjusted EBITDA is projected to be between $17 million and $22 million, down from $23.5 million in the same quarter last year [11] - Full-year 2024 net sales outlook has been revised to $1.037-$1.050 billion, down from the previous range of $1.047 billion to $1.103 billion [12] - However, full-year adjusted EBITDA guidance has been raised to $85 million to $90 million, up from the previous forecast of $65 million to $85 million [13]

Financial Data and Key Metrics Changes - Net sales for Q3 2024 were $293 million, down compared to Q3 of the previous year but at the high end of the guidance range [8] - Gross margin was 41%, and adjusted EBITDA was $31 million, both exceeding the top end of the guidance range [8][26] - Adjusted net income was $8 million, or $0.14 per diluted share, well above the guidance range for the quarter [26] - Cash and cash equivalents decreased to $28.5 million from $41.6 million at the end of Q2 [27] - Total debt was approximately $223.4 million, slightly down from $223.9 million at the end of Q2 [28] Business Line Data and Key Metrics Changes - Direct-to-consumer sales were down 7% year-over-year, comprising 20% of gross sales [25] - The Pop! Yourself business showed modest year-over-year growth despite no special gifting occasions in Q3 [25] - Sales of Pop! Yourself with NFL accessory packs exceeded launch expectations, with over 40% of sales including NFL accessories [16] Market Data and Key Metrics Changes - POS sales globally were down single-digit year-over-year, with the US market seeing low-double-digit declines [36] - EMEA market showed double-digit growth, contrasting with the US performance [36] Company Strategy and Development Direction - The company is focusing on a fan-centric approach to grow its business, which includes delighting core fans and attracting new ones [13] - A strategic plan for 2025 and beyond is being developed, with details expected to be shared in the Q4 call [13][33] - The company is expanding its collaboration with the NFL and Warner Bros. to enhance product offerings [15][23] Management's Comments on Operating Environment and Future Outlook - Management noted that consumers are increasingly looking for value, leading to cautious behavior from wholesale customers ahead of the holiday season [9][30] - The outlook for net sales for the full year has been lowered to $1.037 billion to $1.05 billion, while adjusted EBITDA guidance has been raised to $85 million to $90 million [9][31] - Management expressed optimism about the upcoming holiday season, expecting a rebound in direct-to-consumer sales [29] Other Important Information - The Pop! Yourself product was recognized as a finalist for the 2024 Collectible of the Year award [23] - The company has diversified its supply base away from China, with about one-third of products manufactured there [43] Q&A Session Summary Question: Concerns about cautiousness from wholesalers - Management indicated that POS trends vary by region, with the US seeing declines while EMEA is performing well [36] Question: Direct-to-consumer sales responsiveness to promotions - Management noted that promotional activities have led to increased responsiveness from consumers, with expectations for a strong Q4 [39][41] Question: Impact of potential tariffs on supply chain - Management stated that about one-third of products are manufactured in China, with plans to further diversify supply chains [43][45] Question: Drivers of higher margins in Q3 - Higher margins were attributed to lower-than-expected inventory reserves and reduced freight costs [50][52] Question: Upcoming film slate and its impact - Management highlighted excitement around the film "Wicked" and its associated product offerings [54][56] Question: Consumer sensitivity to promotions - Management clarified that consumer responsiveness is more pronounced in the average price range products rather than high-end collectibles [60][62] Question: Cost structure and potential savings - Management discussed ongoing cost efficiencies and the need for additional talent to support growth initiatives [68][70]

Funko-A (FNKO) came out with quarterly earnings of $0.14 per share, beating the Zacks Consensus Estimate of $0.04 per share. This compares to earnings of $0.03 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 250%. A quarter ago, it was expected that this company would post a loss of $0.14 per share when it actually produced earnings of $0.10, delivering a surprise of 171.43%.Over the last four quarters, the company has surpass ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________to _____________ Commission file number: 001-38274 FUNKO, INC. (Exact name of registrant as specified in its charter) Delaware 35-2593276 (State or othe ...

Financial Performance - Q3 2024 net sales were $292.8 million, down from $312.9 million in Q3 2023, representing a decrease of 6.4%[1] - Gross profit for Q3 2024 was $119.8 million, with a gross margin of 40.9%, compared to $104.0 million and a gross margin of 33.2% in Q3 2023[1] - Adjusted EBITDA for Q3 2024 was $31.0 million, an increase from $25.4 million in Q3 2023[1] - Core Collectible net sales in Q3 2024 were $227.8 million, down 2.3% from $233.3 million in Q3 2023[4] - Loungefly net sales decreased by 17.6% to $47.3 million in Q3 2024, compared to $57.4 million in Q3 2023[4] - For Q4 2024, net sales are expected to be between $280 million and $294 million, with a gross margin percentage of 38% to 40%[6] - Net income attributable to Funko, Inc. for the three months ended September 30, 2024, was $4,330, compared to a net loss of $15,009 for the same period in 2023[13] - Adjusted net income for the three months ended September 30, 2024, was $7,952 thousand, with an adjusted net income margin of 2.7%, up from 0.6% in the prior year[16] - EBITDA for the three months ended September 30, 2024, was $26,149 thousand, significantly higher than $9,918 thousand in the same period last year[17] - Adjusted earnings per diluted share for the three months ended September 30, 2024, was $0.14, compared to $0.03 in the same period last year[16] Outlook and Guidance - The company updated its full-year 2024 net sales outlook to $1.037 billion to $1.050 billion, reflecting a more cautious consumer environment[2] - Adjusted EBITDA outlook for 2024 was raised to $85 million to $90 million, above the previous high end of the range[2] Debt and Assets - Total debt decreased to $223.4 million at September 30, 2024, down from $273.6 million at December 31, 2023[5] - Total current assets increased to $355,233 as of September 30, 2024, from $342,876 as of December 31, 2023, reflecting a growth of 3.9%[14] - Total liabilities decreased to $543,142 as of September 30, 2024, from $566,127 as of December 31, 2023, indicating a reduction of 4.1%[14] - Cash and cash equivalents at the end of the period were $28,546, down from $36,453 at the beginning of the period, representing a decline of 21.7%[15] - Total stockholders' equity attributable to Funko, Inc. increased to $236,508 as of September 30, 2024, from $231,941 as of December 31, 2023, reflecting a growth of 2.4%[14] Operating Activities - The company reported a net cash provided by operating activities of $63,742 for the nine months ended September 30, 2024, compared to a net cash used of $2,867 for the same period in 2023[15] Expenses and Costs - The company incurred depreciation and amortization expenses of $46,409 for the nine months ended September 30, 2024, compared to $42,592 for the same period in 2023, an increase of 8.5%[15] - Interest expense for the three months ended September 30, 2024, was $4,971 thousand, down from $7,601 thousand in the prior year[17] - The company incurred acquisition transaction costs of $287 thousand for the three months ended September 30, 2024, compared to $5,467 thousand in the same period last year[17] - Foreign currency transaction loss for the three months ended September 30, 2024, was $1,005 thousand, compared to $1,074 thousand in the prior year[17] Shareholder Information - The weighted average shares of Class A common stock outstanding increased to 52,523 for the three months ended September 30, 2024, from 48,237 for the same period in 2023[13] - The weighted-average shares of Class A common stock outstanding for the three months ended September 30, 2024, were 52,523 thousand, an increase from 48,237 thousand in the prior year[16]

Investors interested in Consumer Discretionary stocks should always be looking to find the best-performing companies in the group. Has Funko-A (FNKO) been one of those stocks this year? Let's take a closer look at the stock's year-to-date performance to find out.Funko-A is one of 272 individual stocks in the Consumer Discretionary sector. Collectively, these companies sit at #10 in the Zacks Sector Rank. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring the average Za ...

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks. Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to fi ...

Though the bank earnings season has all but declared a "soft landing" for the U.S. economy, lifting the S&P 500 to fresh heights, many pockets of the economy remain strapped by weaker consumer spending. But yet, amid this backdrop, pop-culture toy manufacturer Funko ( With combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry to ...

Is Funko, Inc. (FNKO) back? This Zacks Rank #1 (Strong Buy) has new leadership and has reduced its inventory and debt. Funko is a pop culture lifestyle brand. Its products includes vinyl figures, action toys, plush, apparel, housewares and accessories which allow fans to connect with their favorite pop culture brands and characters. In addition to its popular Pop! brand, it also owns Loungefly. It is a small cap company with a market cap of $658 million. New Leadership Takes the Helm Funko has gone through ...

The Consumer Discretionary group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Is Funko-A (FNKO) one of those stocks right now? By taking a look at the stock's year-to-date performance in comparison to its Consumer Discretionary peers, we might be able to answer that question. Funko-A is a member of our Consumer Discretionary group, which includes 274 different companies and currently sits at #9 in the Zacks Sector Rank. The Zacks Sector ...