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Funko (FNKO) Q1 Loss Narrower Than Expected, Sales Dip Y/Y
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Funko, Inc. (FNKO - Free Report) reported first-quarter 2024 results, wherein the top line missed the Zacks Consensus Estimate and declined year over year. The bottom line fared better than both the Zacks Consensus Estimate and the year-ago quarterly number.
FNKO has notably achieved a significant boost in gross margin, particularly driven by higher margins on the sales of value channel and lower-than-expected freight costs. This achievement showcases the effectiveness of the inventory management processes undertaken by the company.
This Zacks Rank #3 (Hold) company’s shares have rallied 30.4% in the past month compared with the industry’s growth of 9.6%
Image Source: Zacks Investment Research
Q1 Details
Funko, the leading pop-culture lifestyle brand, reported an adjusted loss of 17 cents per share, narrower than the Zacks Consensus Estimate of a loss of 29 cents. Also, the bottom line improved from adjusted loss of 49 cents in the year-ago quarter.
Net sales of $215.7 million decreased 14.4% from $251.9 million reported in the prior-year quarter. Also, net sales missed the Zacks Consensus Estimate of $218 million. The downtick was caused by Hollywood strikes and the resulting lack of new entertainment content.
Adjusted gross margin expanded 840 basis points year over year to 40%. Lower freight cost, higher direct-to-consumer channels and improved inventory management contributed to a stronger gross margin.
SG&A expenses of $85.6 million decreased 14.5% from $100.1 million reported in the prior-year quarter, which included one-time charges totaling $5.1 million and $2.7 million, respectively.
Adjusted EBITDA totaled $9.6 million against adjusted EBITDA loss of $14 million reported a year ago.
Brand wise, Core Collectible sales declined 14.6% year over year to $157.1 million. Loungefly net sales of $40.7 million plunged 20.6% on a year-over-year basis. Other net sales of $17.9 million fell 7.6% year over year.
Geographically, net sales in the United States, Europe and Other International decreased 17.4%, 7.2% and 6.9% year over year to $146.4 million, $54.2 million and $15.1 million, respectively.
Other Financial Aspects
The company ended the quarter with cash and cash equivalents of $26.1 million, long-term debt (net of unamortized discount) of $117.2 million and total stockholders’ equity of $217.6 million.
Outlook
For the second quarter, management expects net sales in the range of $225-$240 million. The company anticipates gross margin in the band of 38-40%. SG&A expense is suggested to be between $80 million and $85 million.
Adjusted EBITDA is forecast in the range of $9-$15 million in second-quarter 2024. FNKO anticipates adjusted net loss per share to be between 8 cents and 15 cents.
For the full year, Funko forecasts net sales in the range of $1.047-$1.103 billion. The company envisions adjusted EBITDA in the band of $65-$85 million.
3 Picks You Can’t Miss
We have highlighted three better-ranked stocks in the broader sector, namely Hasbro Inc. (HAS - Free Report) , Crocs, Inc. (CROX - Free Report) and PlayAGS (AGS - Free Report) .
The Zacks Consensus Estimate for HAS’ current fiscal-year earnings indicates growth of 43.8% from the year-ago reported figures.
Crocs develops and manufactures lifestyle footwear and accessories. It currently has a Zacks Rank #2 (Buy). CROX has a trailing four-quarter earnings surprise of 17.1%, on average.
The Zacks Consensus Estimate for Crocs current financial-year sales and earnings suggests growth of 4.3% and 4.5%, respectively, from the year-earlier levels.
PlayAGS, a leading designer and supplier of gaming products and services, flaunts a Zacks Rank #1. AGS has a negative earnings surprise of 37.5% in the trailing four quarters.
The Zacks Consensus Estimate for PlayAGS current financial-year sales and earnings suggests growth of 5.5% and 2400%, respectively, from the prior-year actuals.
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Funko (FNKO) Q1 Loss Narrower Than Expected, Sales Dip Y/Y
Funko, Inc. (FNKO - Free Report) reported first-quarter 2024 results, wherein the top line missed the Zacks Consensus Estimate and declined year over year. The bottom line fared better than both the Zacks Consensus Estimate and the year-ago quarterly number.
FNKO has notably achieved a significant boost in gross margin, particularly driven by higher margins on the sales of value channel and lower-than-expected freight costs. This achievement showcases the effectiveness of the inventory management processes undertaken by the company.
This Zacks Rank #3 (Hold) company’s shares have rallied 30.4% in the past month compared with the industry’s growth of 9.6%
Image Source: Zacks Investment Research
Q1 Details
Funko, the leading pop-culture lifestyle brand, reported an adjusted loss of 17 cents per share, narrower than the Zacks Consensus Estimate of a loss of 29 cents. Also, the bottom line improved from adjusted loss of 49 cents in the year-ago quarter.
Net sales of $215.7 million decreased 14.4% from $251.9 million reported in the prior-year quarter. Also, net sales missed the Zacks Consensus Estimate of $218 million. The downtick was caused by Hollywood strikes and the resulting lack of new entertainment content.
Adjusted gross margin expanded 840 basis points year over year to 40%. Lower freight cost, higher direct-to-consumer channels and improved inventory management contributed to a stronger gross margin.
SG&A expenses of $85.6 million decreased 14.5% from $100.1 million reported in the prior-year quarter, which included one-time charges totaling $5.1 million and $2.7 million, respectively.
Adjusted EBITDA totaled $9.6 million against adjusted EBITDA loss of $14 million reported a year ago.
Funko, Inc. Price, Consensus and EPS Surprise
Funko, Inc. price-consensus-eps-surprise-chart | Funko, Inc. Quote
Segment Details
Brand wise, Core Collectible sales declined 14.6% year over year to $157.1 million. Loungefly net sales of $40.7 million plunged 20.6% on a year-over-year basis. Other net sales of $17.9 million fell 7.6% year over year.
Geographically, net sales in the United States, Europe and Other International decreased 17.4%, 7.2% and 6.9% year over year to $146.4 million, $54.2 million and $15.1 million, respectively.
Other Financial Aspects
The company ended the quarter with cash and cash equivalents of $26.1 million, long-term debt (net of unamortized discount) of $117.2 million and total stockholders’ equity of $217.6 million.
Outlook
For the second quarter, management expects net sales in the range of $225-$240 million. The company anticipates gross margin in the band of 38-40%. SG&A expense is suggested to be between $80 million and $85 million.
Adjusted EBITDA is forecast in the range of $9-$15 million in second-quarter 2024. FNKO anticipates adjusted net loss per share to be between 8 cents and 15 cents.
For the full year, Funko forecasts net sales in the range of $1.047-$1.103 billion. The company envisions adjusted EBITDA in the band of $65-$85 million.
3 Picks You Can’t Miss
We have highlighted three better-ranked stocks in the broader sector, namely Hasbro Inc. (HAS - Free Report) , Crocs, Inc. (CROX - Free Report) and PlayAGS (AGS - Free Report) .
Hasbro, a leading operator of toy and games company, currently sports a Zacks Rank of 1 (Strong Buy). It has a trailing four-quarter average earnings surprise of 17.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for HAS’ current fiscal-year earnings indicates growth of 43.8% from the year-ago reported figures.
Crocs develops and manufactures lifestyle footwear and accessories. It currently has a Zacks Rank #2 (Buy). CROX has a trailing four-quarter earnings surprise of 17.1%, on average.
The Zacks Consensus Estimate for Crocs current financial-year sales and earnings suggests growth of 4.3% and 4.5%, respectively, from the year-earlier levels.
PlayAGS, a leading designer and supplier of gaming products and services, flaunts a Zacks Rank #1. AGS has a negative earnings surprise of 37.5% in the trailing four quarters.
The Zacks Consensus Estimate for PlayAGS current financial-year sales and earnings suggests growth of 5.5% and 2400%, respectively, from the prior-year actuals.