If there’s one common thread this year, it’s that many players in the toys, games and collectibles space need to tighten up their management and streamline their operations.
At Funko, this process has been going on for at least a year and a half, and it seems to be moving in the right direction.
In the second quarter, Funko’s net sales reached $247.7 million, an increase of 3.2% over the same period last year. Sales of core collectibles surged 6.4%, while sales in the “other” category surged 16.9%. The company’s Loungefly division, which has been hot for years, suffered another quarterly decline, with sales falling 13.4%. Gross profit reached US$104 million, equivalent to a gross profit margin of 42.0%. In comparison, gross profit margin in the second quarter of last year was US$70 million, equivalent to 29.2%.
Additionally, Funko continues to reduce inventory levels and significantly reduce debt.
Joining Funko two months ago, I look forward to leading Funko into its next phase of growth. I’m passionate about our fans and excited about our business, products and opportunities. The team is actively developing plans for 2025 and beyond. We take a fan-centric approach centered around delighting our core fans, engaging and serving new fans, selling where our fans are, and improving the fan experience. These four fundamental principles are at the core of our development because great products keep our fans coming back and we can reach new fans, particularly by selling directly to them or in the venues they frequent, and by placing fans in at the center of everything we do, thereby fostering loyalty and long-term value. We expect to provide additional details on these plans in the coming quarters.
—Cynthia Williams, CEO of Funko
Williams noted that the direct-to-consumer business continues to grow, while Pop! Yourself and Little Pop! Legs are growing. She attributed “higher-than-expected sales margins in the value pipeline and the resulting reduction in inventory reserves” to the company’s better-than-expected 42% gross margin.
Today’s gains also come with a staffing update, with Yves Le Pendeven appointed as finance chief. The five-year Funko veteran has served in a variety of roles at the company, most recently as acting financial controller.
In addition, Funko founder Mike Becker (also known as Funmaker Mike) announced his departure from the company before the San Diego Comic-Con International (SDCC) last month.
The article “Funko’s Second Quarter Earnings: Sales Growth Returns as Inventory, Profit Margins Improve” appeared first on The Toy Book.
