A new leader is joining Funko on May 20.
Cynthia Williams has been tapped to lead the Washington-based pop culture lifestyle brand as CEO and will serve on its Board of Directors. Interim CEO Michael Lunsford will remain in command until that date.
Williams joins the company from Hasbro where she most recently served as President of Wizards of the Coast and Hasbro Games. The seasoned exec also held roles at Microsoft and Amazon.
“I am honored to lead Funko, a company celebrated for its history of creativity and innovation on behalf of a passionate fan base,” Williams says. “Funko has built a portfolio of valuable global brands, and I am energized about this unique opportunity to help Funko fully realize its potential. My extensive experience with the devoted fans of Dungeons & Dragons, Magic: The Gathering, and Xbox will be highly beneficial in developing products that continue to appeal to Funko’s passionate fans, both core fans and collectors.”
The news comes alongside Funko’s first quarter earnings.
Net sales in Q1 fell approximately 14.38% to $215.7 million compared to $251.9 million during the same period last year. Gross profit and margin nearly doubled, with profit spiking to $86.3 million (gross margin of 40%) versus $49.6 million (19.7% gross margin) in Q1 of 2023.
“For the 2024 first quarter, we reported solid overall financial results, with net sales within our guidance range, and gross margin and adjusted EBITDA well above our expectations,” says Michael Lunsford, Funko’s Interim CEO. “Net sales for Q1 would have been close to the midpoint of our guidance range but for sales of certain lower margin products that shifted to Q2 from Q1. As a result of better inventory management, we achieved higher than anticipated margins on sales into the value channel, which along with better-than-expected freight costs contributed to our Q1 gross margin of 40%. Given the good start to the year, we are reiterating our full-year 2024 guidance.”
The company also made progress in Q1 at lowering inventory levels and paying down debt.
Funko’s most recent SEC filing leans into some of the macroeconomic factors impacting its business and the greater global toy industry, including challenges related to the ongoing Russia-Ukraine War, the Israel-Hamas War, and the state of retail, including slowed restocking and canceled orders.
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On an earnings call this evening, Funko leadership pointed to some residual fallout from last year’s Hollywood labor strikes as having impact on Q1 sales. Additionally, the company continues strengthening its direct-to-consumer (DTC) business and its evergreen product assortment.
While she doesn’t officially start until May 20, Williams joined the earnings call with an enthusiastic outlook and plans to “hit the ground running” with a look toward “opportunities for substantial growth,” including “anime, music, sports, and DTC.”
