Financial Data and Key Metrics Changes - Total net sales for Q3 2025 were $250.9 million, in line with expectations, but down approximately $11 million year-over-year due to SKU rationalizations and reduced clearance sales [22][23] - Gross profit was $100.8 million, resulting in a gross margin of 40.2%, which was better than expected, with price increases offsetting increased tariffs [23] - Adjusted net income was $3.2 million, or 6 cents per diluted share, while adjusted EBITDA was $24.4 million, higher than expectations [23][24] - Direct-to-consumer sales mix decreased to 18% from 20% in the previous year due to reduced marketing spend [23] Business Line Data and Key Metrics Changes - The company celebrated the milestone of 1 billion units sold, with a 27% increase in membership in the fan loyalty program since the start of the year [7][8] - The anime segment represented 30% of sales in Q3, becoming the second largest fan vertical [15] - The introduction of Biddy Pop mini vinyl figures has been successful, making Walmart's 2025 top toy list and expected to be placed in 1,800 stores [16][20] Market Data and Key Metrics Changes - Global point-of-sale (POS) units were down only 3% year-over-year, with the U.S. market experiencing mid to high single-digit declines while EMEA saw low double-digit growth [32][33] - The company noted a cautious approach from U.S. buyers, while European markets showed stronger momentum [34] Company Strategy and Development Direction - The "Make Culture Pop" strategy focuses on culture, creativity, and commerce, aiming to transform pop culture into products and expand into new fandoms [9][20] - The company plans to enhance its international presence, particularly in Asia and Latin America, and improve direct-to-consumer capabilities [19][20] - Recent multi-year renewal agreements with major licensing partners, including Disney and Warner Bros., strengthen the company's competitive position [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to maintain momentum and transform for growth, emphasizing the importance of operationalizing quick responses to trends [30][31] - The outlook for Q4 2025 includes modest net sales growth driven by new product launches and a gross margin of approximately 40% [24] Other Important Information - The company has engaged advisors for its refinancing process, which is ongoing, and has amended existing credit facilities to waive financial covenants for Q2 and Q3 [25] - The company has maintained a gross margin above 40% in six of the last seven quarters, indicating improved business quality [24][26] Q&A Session Summary Question: Opportunities for the next 12 months - Management highlighted the focus on maintaining performance momentum and expanding in areas like sports and music, with operationalizing quick strike capabilities as a priority [28][29] Question: Retail environment for Q4 - Management noted strong POS trends and a mix of cautiousness in the U.S. and momentum in Europe, with a significant content slate for Q4 [32][34] Question: Market for vending machines and kiosks - The company sees the Pop Yourself experience as unique and plans to create more experiences within retail partners' spaces [36] Question: European sales outlook - Management expects European sales to recover in Q4 following production delays and the launch of Pop Yourself [38] Question: Impact of pricing on demand - Management reported that price increases have been well-received, with unit sales holding up despite some market challenges [39]

Financial Data and Key Metrics Changes - Total net sales for Q4 2024 were $293.7 million, up 1% year-over-year and at the top end of guidance [30] - Gross profit reached $124.4 million with a gross margin of 42.4%, an improvement from 37.6% in Q4 2023 [31] - Adjusted net income was $4.4 million, or $0.08 per diluted share, significantly up from $0.1 million in Q4 2023 [33] - For the full year, net sales were $1.05 billion compared to $1.1 billion in 2023, while adjusted EBITDA improved to $94.7 million from negative $11.8 million in 2023 [34] Business Line Data and Key Metrics Changes - Direct-to-consumer sales increased by 20% year-over-year, comprising 29% of gross sales compared to 25% in Q4 2023 [30] - Core collectibles business grew over 10% in Q4, with sales outside the US increasing by 23% [9] - The Biddy Pop line saw an impressive 83% year-over-year growth in Q4 [21] Market Data and Key Metrics Changes - Sales in Europe were up more than 20%, driven by strong seasonal performance at key retail partners [30] - POS in the fourth quarter was up 4% year-over-year globally, with 1% growth in the US and 17% growth in Europe [72] Company Strategy and Development Direction - The company is focusing on expanding its sports product line, which currently represents only 4% of total revenue, with significant growth potential identified in the $35 billion sports memorabilia market [12][64] - Plans to enhance direct-to-consumer sales and expand the Pop Yourself product line into new international territories are underway [39] - The company aims to improve brand value by avoiding sales into discount channels, thereby enhancing the shopping experience for fans [40] Management's Comments on Operating Environment and Future Outlook - Management acknowledged softening consumer behavior in the US market and the impact of tariffs and inflation on operations [28] - Despite challenges, management remains optimistic about future growth, particularly in the second half of 2025 as strategic initiatives take effect [28][40] - The company is actively working on mitigating the impact of tariffs through various strategies, including renegotiating factory costs and adjusting pricing [38] Other Important Information - The company has strengthened its leadership team with key additions to enhance brand positioning and sales operations [25][27] - The fan loyalty program, Fan Rewards, added 120,000 new members in 2024, indicating strong customer engagement [24] Q&A Session Summary Question: Can you elaborate on the assumptions behind your guidance for the year? - Management highlighted green shoots in the business, particularly in direct-to-consumer and sports segments, while acknowledging headwinds from tariffs and consumer sentiment [46][47] Question: What is the potential size of the sports strategy over the next few years? - Management sees significant growth potential in the sports category, which is currently a small part of revenue, and plans to expand activations and regional capsules [59][64] Question: How is the POS performing in the US and Europe? - Management reported a 1% growth in US POS and a 17% growth in Europe, indicating stronger performance in the latter region [72] Question: Why is there a larger decline in sales expected in the first quarter? - Management attributed the decline to lower foot traffic in major retailers and cautious consumer spending, particularly in the direct-to-consumer channel [78][79] Question: Are there any mitigating actions being taken regarding tariffs? - Management confirmed that pricing adjustments and cost-sharing discussions with vendors are part of their strategy to offset tariff impacts [87]