Funko (NASDAQ:FNKO) Announces Quarterly Earnings Results, Beats Expectations By $0.06 EPS

Funko (NASDAQ:FNKO) posted its earnings results on Thursday. The company reported $0.16 EPS for the quarter, topping the consensus estimate of $0.10 by $0.06, FiscalAI reports. The firm had revenue of $258.34 million for the quarter, compared to analyst estimates of $250.70 million. Funko had a return on equity of 6.63% and a net margin of 0.49%.

Here are the key takeaways from Funko’s conference call:

• Q3 sales and profitability improved: Net sales rose 3%, led by 5% growth in core collectibles and 12% growth in Europe. Gross margin expanded five percentage points to 45%, and adjusted EBITDA was $32 million, or a 12% margin.
• Debt declined: Funko ended the quarter with $42 million in cash and $155 million in net debt, down from just over $200 million a year earlier.
• Point-of-sale units were weaker in Q3: Reported global POS units fell 4% year over year, including a 10% decline in the U.S.; D2C units fell 13% amid reduced promotions. EMEA POS rose 16%, and global POS was up 3% year to date; management said last year’s post-tariff inventory shipments made the U.S. comparison tougher.
• Full-year guidance was reiterated: The company maintained its outlook for sales to be flat to up 3% and adjusted EBITDA of $100 million to $110 million.
• New products and sales channels showed early traction: Management said Pop! Mystery products sold three times faster than expected and reached 100% sell-through, with more launches planned. It also highlighted tests of live selling and auctions, while noting these are developing opportunities rather than established revenue drivers.

Funko Price Performance

Shares of Funko stock traded up $0.59 on Friday, hitting $6.72. The company’s stock had a trading volume of 2,165,211 shares, compared to its average volume of 994,451. The company has a market capitalization of $375.85 million, a price-to-earnings ratio of 96.01 and a beta of 1.00. Funko has a 1 year low of $2.72 and a 1 year high of $7.35. The company has a debt-to-equity ratio of 0.97, a quick ratio of 0.79 and a current ratio of 1.16. The firm has a fifty day moving average price of $6.09 and a 200-day moving average price of $5.18.

Key Stories Impacting Funko

Here are the key news stories impacting Funko this week:

• Positive Sentiment: Q3 revenue rose 3% to $258.3 million, topping the roughly $250.7 million consensus, while adjusted earnings were $0.16 per share versus estimates of $0.10. Funko Q3 results
• Positive Sentiment: Gross margin expanded to 45.2% from 40.2% a year earlier, and coverage pointed to core collectibles growth and a leaner Loungefly business. Funko reiterated its full-year net sales and adjusted EBITDA guidance, supporting the view that profitability and cost management are improving. Funko’s Core Collectibles Lead Q3 Growth as Loungefly Gets Leaner
• Neutral Sentiment: FNKO’s post-earnings reaction was volatile: one report noted an initial decline despite the sales beat. The current rebound may reflect investors reassessing the results after that selloff. Funko beats Q3 sales expectations but stock drops
• Negative Sentiment: U.S. sales declined even as overall sales increased, raising a potential concern about domestic demand and leaving regional performance as a risk to monitor. Funko’s U.S. sales decline, overall sales increase

Insiders Place Their Bets

In other Funko news, Director Charles D. Denson acquired 72,992 shares of the business’s stock in a transaction dated Monday, August 24th. The stock was acquired at an average cost of $6.85 per share, for a total transaction of $499,995.20. Following the completion of the transaction, the director directly owned 269,084 shares of the company’s stock, valued at $1,843,225.40. This represents a 37.22% increase in their ownership of the stock. The purchase was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, CFO Pendeven Le sold 35,907 shares of the business’s stock in a transaction that occurred on Tuesday, September 1st. The shares were sold at an average price of $6.51, for a total value of $233,754.57. Following the completion of the sale, the chief financial officer owned 35,907 shares of the company’s stock, valued at $233,754.57. This trade represents a 50.00% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last 90 days, insiders have sold 228,662 shares of company stock worth $1,363,086. 3.88% of the stock is owned by corporate insiders.

Wall Street Analyst Weigh In

FNKO has been the topic of several recent research reports. Weiss Ratings restated a “sell (d-)” rating on shares of Funko in a research report on Thursday, October 15th. Wall Street Zen raised shares of Funko from a “hold” rating to a “buy” rating in a research note on Saturday, August 15th. Seaport Research Partners assumed coverage on shares of Funko in a report on Monday, August 24th. They set a “buy” rating and a $8.00 target price for the company. Zacks Research raised shares of Funko to a “hold” rating in a report on Wednesday, August 26th. Finally, DA Davidson boosted their target price on shares of Funko from $7.00 to $8.00 and gave the company a “buy” rating in a research note on Friday, August 7th. One analyst has rated the stock with a Buy rating, two have given a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat, the company currently has a consensus rating of “Hold” and an average target price of $7.08.

About Funko

Funko, Inc is a consumer products company that designs, sources and sells licensed and original pop-culture collectibles and merchandise. Its best-known product is the Pop! vinyl figure, which features characters from movies, television, video games, sports and other entertainment properties. The company also offers plush products, action figures, accessories, apparel, home goods and games.

Funko’s portfolio includes brands such as Pop!, Loungefly and Mondo. Loungefly focuses on licensed bags, wallets, accessories and other lifestyle products, while Mondo is known for premium collectibles, posters, apparel and related merchandise.