Funko‘s Core Collectibles business continued to gain ground in the third quarter, helping the company post higher sales and improved profits despite a pullback at Loungefly.
Net sales increased 3% to $258.3 million, beating the company’s expectations. Core Collectibles grew nearly 5%, or $9.7 million, with gains in standard Pop! figures, Mystery Minis, and the timing of Advent calendar releases. Europe was another bright spot, with sales climbing 12%.
Loungefly sales declined by nearly 10% as Funko continued to reduce its assortment. The company cut approximately half of its Loungefly SKUs during the quarter, with management citing improving productivity and strong sales from exclusives.
“Core Collectibles grew nearly 5%, with international markets again a source of strength,” said Josh Simon, CEO of Funko.
Pokémon, One Piece, Harry Potter, and KPop Demon Hunters ranked among Funko’s top properties for the quarter, with the company’s 10 largest properties accounting for 34% of sales.
Funko is also finding new ways to reach collectors.
Its new dedicated shop inside FAO Schwarz in New York City combines Pop! Yourself with exclusive Funko and Loungefly merchandise. The company is expanding into new fandoms, including A Court of Thorns and Roses, with products spanning Pop! and Loungefly.
At the higher end of the collectibles business, Funko’s POP! 250 initiative has generated interest through one-of-one figures sold at auction through Goldin. A Babe Ruth Pop! fetched approximately $26,000.
The financial picture also improved. Gross margin reached 45.2%, up from 40.2% last year, benefiting from lower tariffs, reduced minimum guaranteed royalties, and royalty accrual adjustments.
Net income increased to $7.5 million, or $0.13 per diluted share, compared with $900,000 a year ago. Adjusted EBITDA rose to $32.1 million from $24.4 million.
Funko maintained its full-year outlook, calling for flat to 3% sales growth and adjusted EBITDA of $100 million to $110 million. The latter includes a $25.4 million tariff-related benefit recognized during Q2.
