Press release
Funko Announces Preliminary Fourth Quarter 2019 Financial Results; Provides Initial 2020 Net Sales Outlook of High-Single-Digit to Low-Double-Digit Growth
EVERETT, Wash.--(BUSINESS WIRE)-- Funko, Inc. (Nasdaq: FNKO), a leading pop culture consumer products company, today reported preliminary financial results
About this update from Funko, Inc.
[{"type":"text","content":"\n \n\n EVERETT, Wash.--(BUSINESS WIRE)--\nFunko, Inc. (Nasdaq: FNKO), a leading pop culture consumer products company, today reported preliminary financial results for the fourth quarter ended December 31, 2019. Net sales are expected to be approximately $214 million, a decrease of 8% compared to $233 million in the fourth quarter of 2018. Net sales were below expectations in mature markets, including the U.S., due to the challenging retail environment, which resulted in lower than expected purchases among Funko’s top customers throughout the holiday season as well as softness in sales related to certain tentpole movie releases. These factors more than offset strong growth both in Europe and the Loungefly brand during the quarter.\n\n\nFor the fourth quarter of fiscal 2019, Funko estimates:\n\n\n\nNet sales in the U.S. will decrease approximately 9%, while net sales internationally will decrease approximately 8%, reflecting declines in mature international markets, including Australia and Canada, partially offset by continued double digit growth in Europe.\n\n\nOn a product category basis, net sales of figures will decrease approximately 10% and net sales of other products will decrease approximately 3% versus the year ago period, respectively. Net sales of Loungefly items, included in other products, are expected to show continued double digit growth in the fourth quarter offset by declines in other branded products.\n\n\nThe Company will incur a one-time $16.8 million charge related to the write-down of inventory as a result of the Company’s decision to dispose of slower moving inventory to increase operational capacity. This charge is incremental to normal course reserves and will have an unfavorable impact to gross profit1, gross margin1, net loss and net loss per diluted share in the fourth quarter.\n\n\nGross profit1 will be in the range of $62.3 million to $62.8 million, while gross margin1 will be 29.2% to 29.4%. Gross margin excluding the one-time inventory write-down2 will be 37.0% to 37.3%.\n\n\nThe Company will have a net loss in the range of $6.7 million to $6.0 million and net loss per diluted share of $0.12 to $0.11.\n\n\nAdjusted EBITDA3 will be in the range of $24.7 million to $25.7 million.\n\n\nAdjusted Net Income3 will be in the range of $8.1 million to $8.9 million and Adjusted Earnings per Diluted Share3 w...