If there’s a common thread this year, it’s that a number of players in the toy, game, and collectibles spaces need to tighten things up and streamline their businesses.
At Funko, that process has been ongoing for at least the last year and a half, and the needle appears to be moving in the right direction.
In the second quarter, Funko’s net sales hit $247.7 million, a 3.2% increase versus the same period last year. Core Collectibles sales spiked 6.4% while sales in the “Other” category jumped 16.9%. The company’s Loungefly division, which had been red hot for years, saw another quarter of decline with sales slipping 13.4%. Gross profit hit $104 million, equal to gross margin of 42.0%. This compares with $70 million, equal to gross margin of 29.2% during Q2 last year.
Additionally, Funko continues to lower its inventory levels and reduce its debt significantly.
Having joined Funko two months ago, I look forward to leading Funko through the next stage of our growth. I am enthused by our fans and excited about our business, products and opportunities. The team is actively working on developing our plans for 2025 and beyond. We are taking a fan-centric approach, which revolves around delighting our core fans, attracting and serving new fans, selling where the fans are and improving the fan experience. These four fundamental principles are core to our growth because great products keep our fans coming back, there are new fans we can reach, especially by selling to them directly or in venues they frequent, and keeping fans at the center of all we do breeds loyalty and long-term value. We expect to provide further details on these plans in the coming quarters.”
Williams notes that the direct-to-consumer business continues to grow while Pop! Yourself and Bitty Pop! are growing legs. She attributes “higher than anticipated margins on sales in the value channel and resulting inventory reserve relief” to the company’s better-than-expected 42% gross margin.
Today’s earnings also came with a staffing update as Yves Le Pendeven has been named Chief Financial Officer. The five-year Funko vet has held several roles with the company, most recently as Acting CFO.
Additionally, Funko Founder Mike Becker, aka Funmaker Mike, announced his departure from the company ahead of last month’s Comic-Con International: San Diego (SDCC).
