Funko Reports 13.5% Decline in Net Sales and Increased Net Loss for Fiscal Year 2025

Funko, Inc. reported a significant decline in its financial performance for the fiscal year ended December 31, 2025, with net sales of $908.2 million, a decrease of 13.5% from $1.05 billion in 2024. The company attributed this decline to various factors, including macroeconomic uncertainties and tariff disruptions that adversely impacted demand across all distribution channels. The net loss for the year was $68.3 million, compared to a loss of $15.1 million in the previous year, reflecting a substantial increase in losses as the decrease in sales outpaced reductions in operating expenses.

In terms of operational metrics, Funko's gross margin fell to 38.7% from 41.4% in 2024, primarily due to increased shipping and tariff costs, which rose by 9.5% during the year. The company also reported a decrease in selling, general, and administrative expenses, which totaled $337.7 million, down 5.9% from the previous year. However, the overall financial health of the company remains under scrutiny, as it continues to navigate a challenging retail environment characterized by reduced inventory levels and cautious purchasing behavior from retailers.

Strategically, Funko has been focusing on expanding its product offerings and enhancing its direct-to-consumer sales channels. The company has made efforts to diversify its product lines, including the introduction of new items under its Loungefly and Core Collectible brands. Additionally, Funko's international sales accounted for approximately 40% of total sales, indicating a growing presence in global markets, although sales outside the U.S. also experienced fluctuations. The company is actively investing in its e-commerce capabilities to strengthen its relationship with fans and improve sales performance.

Looking ahead, Funko's management expressed cautious optimism about future growth, citing ongoing initiatives to improve liquidity and financial condition. The company has entered into amendments to its credit agreement, extending the maturity date of its loans to December 31, 2027, and waiving certain financial covenants for upcoming quarters. However, the company remains vulnerable to external factors such as inflation, changing consumer preferences, and potential disruptions in its supply chain, which could impact its ability to achieve profitability in the near term.