Source: Funko/The Toy Book

Funko hit a rebound in the third quarter thanks to aggressive cost-cutting measures and increased focus on digital sales.

Net sales dropped 14% in Q3 to $191.2 million versus $223.3 million during the same period last year. Funko, which experienced a massive 49% drop in the second quarter, notes that its Q3 decline is due in large part to slower store reopenings and other COVID-19 related impact in the U.S. specialty channel and throughout Europe.

Funko says it offset the COVID-19 impact thanks to growth in its own e-commerce business and through growth in domestic e-commerce and mass retail. Sales of figures, including Funko’s signature Pop! Vinyl line fell 18% though net sales of other products declined just 1% due to 25% growth in the company’s Loungefly brand.

“Our teams have executed well in 2020 despite the challenges presented by the pandemic,” says Funko CEO Brian Mariotti. “In the third quarter, we outperformed revenue expectations, reflecting strength within our domestic mass market and digital channels. We also maintained strong gross margins and cost controls, which allowed us to deliver improved profitability. The quarter was highlighted by our successful evergreen programs, expanded product offerings, and enhanced e-commerce capabilities, all of which are enabling us to drive increased engagement with our fans around the globe.”

Funko’s direct-to-consumer digital sales increased by more than 150% following the debut of a redesigned website and increased online engagement with families and collectors due to the cancellations of the live events such as Comic-Con International: San Diego (SDCC) and New York Comic Con (NYCC) that the company has become largely tethered to in recent years.

“While we expect to face continued headwinds in specific channels and regions in the fourth quarter, we believe we are well-positioned for the holiday season with our most diverse product offering yet and an expanded presence within key retail partners,” says Mariotti.

Funko net sales for the first nine months of the year fell 26.7% over the same period last year.


About the author

James Zahn

James Zahn

James Zahn, AKA The Rock Father, is Editor-in-Chief of The Toy Book, a Senior Editor at The Toy Insider and The Pop Insider, and Editor of The Toy Report, The Toy Book‘s weekly industry newsletter. As a pop culture and toy industry expert, Zahn has appeared as a panelist and guest at events including Comic-Con International: San Diego (SDCC) Wizard World Chicago, and the ASTRA Marketplace & Academy. Zahn has more than 30 years of experience in the entertainment, retail, and publishing industries, and is frequently called upon to offer expert commentary for publications such as Forbes, Marketwatch, the Wall Street Journal, the New York Times, USA Today, Reuters, the Washington Post, and more. James has appeared on History Channel’s Modern Marvels, was interviewed by Larry King and Anderson Cooper, and has been seen on Yahoo! Finance, CNN, CNBC, FOX Business, NBC, ABC, CBS, WGN, The CW, and more. Zahn joined the Adventure Media & Events family in 2016, initially serving as a member of the Parent Advisory Board after penning articles for the Netflix Stream Team, Fandango Family, PBS KIDS, Sprout Parents (now Universal Kids), PopSugar, and Chicago Parent. He eventually joined the company full time as a Senior Editor and moved up the ranks to Deputy Editor and Editor-in-Chief.