Following a tumultuous 2020, Funko did big business on the rebound in 2021 to hit a new milestone of more than $1 billion in annual sales.
Owing much to the continued diversification of its product assortment to include figures, plush, games, apparel, and accessories, Funko’s net sales spiked 58% last year to $1.03 billion. Net income swung back in the right direction with a 595% increase to $67. 9 million. The success was capped by a big fourth quarter with net sales increasing 48%
“We continue to execute against our key growth pillars designed to drive both product growth and channel expansion, including both direct-to-consumer and in international markets,” says Funko CEO Andrew Perlmutter. “As we look to the remainder of fiscal 2022, we are pleased to be entering the year with strong momentum and more excited than ever about our growth prospects.”
That growth is expected to be in the double-digits again.
According to the company’s newly issued guidance, Funko expects net sales growth for 2022 to fall between 20-25% following a first quarter that is already on track for more than 40% growth.
One area of concern is a plight shared by all toymakers and consumer products companies this year: supply chain challenges that are shrinking margins despite consumers’ insatiatble hunger for new products.
“Our gross margin is heavily influenced by the current inflationary freight environment,” says Funko Chief Financial Officer Jennifer Fall Jung. “Our guidance for the year assumes freight rates will remain elevated at least through the first half of the year. As a result, we expect first half gross margins to face a similar headwind to the second half of 2021.”
The company says that it is still seeing “a substantial increase in trans-ocean transit times” for product to make its way from production to retail.
In Q4 of 2021, Funko’s net sales of figures increased 50% to $255.1 million while net sales of other products increased 44% to $81.1 million reflecting strong demand for Loungefly products, games, plush, and accessories. The company also made an entry into the greeting card aisle with the debut of its Popsies brand.
