Funko Reports 5.3% Net Sales Increase to $200.9 Million in Q1 2026

Funko, Inc. reported a net sales increase of 5.3% for the first quarter of 2026, reaching $200.9 million compared to $190.7 million in the same period of 2025. The growth was primarily driven by higher sales of core Pop! products and price increases implemented in the third quarter of 2025, despite a decline in Loungefly product sales. The company's net loss for the quarter was $18.1 million, a significant improvement from the $28.1 million loss reported in the prior year, reflecting a 35.4% reduction in losses.

The company's cost of sales decreased by 1.6% to $112.1 million, contributing to an improved gross margin of 44.2%, up from 40.3% in the previous year. This improvement was attributed to a favorable product mix and lower royalty impairment expenses. Selling, general, and administrative expenses also saw a slight decline of 1.3%, totaling $83.7 million, as the company managed to reduce personnel and facility costs. However, interest expenses rose by 26.9% to $4.9 million due to higher interest rates and increased debt levels.

In terms of operational metrics, Funko's cash flow from operating activities turned positive, generating $10.2 million in the first quarter of 2026, a stark contrast to the $22.3 million used in the same quarter of 2025. The company ended the quarter with $34.3 million in cash and cash equivalents, down from $42.1 million at the end of 2025. Funko's total debt stood at $211.8 million, with no availability under its revolving credit facility, following a recent amendment to extend the maturity of its loans to December 31, 2027.

Geographically, Funko's sales in the United States decreased by 3.7% to $117.4 million, while European sales surged by 25.6% to $68.1 million. The company continues to face challenges in the retail environment, including inventory management and the impact of tariffs on costs. Funko has strategically adjusted its inventory purchases to focus on core products and has implemented price increases to mitigate these challenges.

Looking ahead, Funko's management remains cautious about the economic landscape, including potential impacts from tariffs and changing consumer behavior. The company plans to continue monitoring its liquidity and financial position, with a focus on improving operational efficiency and exploring strategic alternatives to enhance shareholder value.