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

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

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 Stock Performance

Shares of NASDAQ:FNKO traded up $0.59 during mid-day trading on Friday, reaching $6.72. 2,165,211 shares of the company traded hands, compared to its average volume of 994,451. The company’s 50 day moving average price is $6.09 and its 200-day moving average price is $5.18. The firm has a market cap of $375.85 million, a PE ratio of 30.55 and a beta of 1.00. The company has a debt-to-equity ratio of 0.97, a current ratio of 1.16 and a quick ratio of 0.79. Funko has a 52 week low of $2.72 and a 52 week high of $7.35.

Insider Buying and Selling

In other news, Director Charles Denson bought 72,992 shares of the stock in a transaction that occurred on Monday, August 24th. The shares were bought at an average price of $6.85 per share, for a total transaction of $499,995.20. Following the purchase, the director owned 269,084 shares in the company, valued at $1,843,225.40. This represents a 37.22% increase in their ownership of the stock. The acquisition was disclosed in a document filed with the SEC, which is available through this link. Also, CEO Josh Simon sold 181,893 shares of the business’s stock in a transaction dated Thursday, September 3rd. The shares were sold at an average price of $5.79, for a total value of $1,053,160.47. Following the completion of the transaction, the chief executive officer owned 151,440 shares in the company, valued at $876,837.60. The trade was a 54.57% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last ninety days, insiders sold 228,662 shares of company stock valued at $1,363,086. 3.88% of the stock is owned by corporate insiders.

Analysts Set New Price Targets

FNKO has been the topic of several analyst reports. DA Davidson lifted their price target on shares of Funko from $7.00 to $8.00 and gave the stock a “buy” rating in a research note on Friday, August 7th. Weiss Ratings reissued a “sell (d-)” rating on shares of Funko in a research report on Thursday, October 15th. Seaport Research Partners began coverage on Funko in a research note on Monday, August 24th. They issued a “buy” rating and a $8.00 price objective for the company. The Goldman Sachs Group reaffirmed a “neutral” rating and issued a $6.75 target price on shares of Funko in a report on Monday, August 10th. Finally, Wall Street Zen raised Funko from a “hold” rating to a “buy” rating in a report on Saturday, August 15th. One research analyst has rated the stock with a Buy rating, two have issued a Hold rating and one has issued a Sell rating to the company’s stock. According to MarketBeat.com, the stock has a consensus rating of “Hold” and a consensus price target of $7.08.

More Funko News

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

Funko Company Profile

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.