GuruFocus.com

Funko Inc (FNKO) Q3 2024 Earnings Call Highlights: Navigating Challenges with Strategic Adjustments

GuruFocus News
4 min read

In This Article:

  • Net Sales: $292.8 million, down compared to Q3 of last year.

  • Gross Margin: 40.9%, driven by lower than anticipated inventory reserves.

  • Adjusted EBITDA: $31 million, above guidance range.

  • Adjusted Net Income: $8 million or 14 per diluted share, above guidance range.

  • SG&A Expenses: $92.7 million, within guidance range.

  • Cash and Cash Equivalents: $28.5 million as of September 30th.

  • Net Inventory: $118.6 million, up from $109 million at June 30th.

  • Total Debt: $223.4 million, slightly down from the previous quarter.

  • Total Company Liquidity: $83.5 million, decreased from $101.6 million last quarter.

  • Full Year Net Sales Outlook: Lowered to $1.037 billion to $1.05 billion.

  • Full Year Adjusted EBITDA Outlook: Raised to $85 million to $90 million.

  • Q4 Net Sales Guidance: Between $280 million and $294 million.

  • Q4 Gross Margin Guidance: Between 38% and 40%.

  • Q4 SG&A Expense Guidance: $93 million to $99 million.

  • Q4 Adjusted Net Income Guidance: Between a loss of $3 million and income of $1 million.

  • Q4 Adjusted EBITDA Guidance: Between $17 million and $22 million.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Funko Inc (NASDAQ:FNKO) reported a solid overall financial performance for the quarter, with net sales of $293 million, which was at the high end of their guidance range.

  • The company achieved a gross margin of 41% and adjusted EBITA of $31 million, both exceeding the top end of their guidance range.

  • Funko Inc (NASDAQ:FNKO) raised the range for adjusted EBITA to $85 million to $90 million for the full year, indicating improved profitability.

  • The company expanded its collaboration with the NFL, allowing fans to customize 'Pop Yourself' with NFL team logos, which exceeded launch expectations.

  • Funko Inc (NASDAQ:FNKO) has diversified its supply base, with only about a third of its products manufactured in China, reducing potential tariff impacts.

Negative Points

  • Net sales guidance for the full year was lowered to $1.037 billion to $1.05 billion due to cautious consumer spending and wholesale customer caution.

  • Direct to consumer sales were down 7% year over year, indicating challenges in this sales channel.

  • The company anticipates a higher percentage of sales to occur during promotional periods, which may impact gross margins.

  • Funko Inc (NASDAQ:FNKO) experienced a decrease in total company liquidity, dropping from $101.6 million to $83.5 million.

  • There is concern about potential capacity challenges if tariffs are enacted, which could lead to a rush to ship products into the U.S.

and

Recommended Stories