Funko NASDAQ: FNKO executives said the company delivered a “really strong” first quarter as momentum from late 2025 carried into the new year, pointing to higher sales, record gross margin and improved point-of-sale trends.
The company hosted its first-quarter financial results discussion from Funko Hollywood on Hollywood Boulevard, with creator and collectibles influencer Tristan “Top Pops” serving as host alongside CEO Josh Simon, CFO Yves LePendeven, and Loungefly GM Jessica Kong.
Sales rose 5% as core collectibles grew 17%
Simon said Q1 performance reflected the company’s “Make Culture POP!” strategy “starting to really manifest itself in the market.” He said overall sales increased 5% in the quarter, while “the core collectibles business” grew 17%.
LePendeven added that profitability outperformed expectations. “We also reported our highest gross margin ever of 44%,” he said, which helped drive adjusted EBITDA of $11 million, “way better than we expected.”
Product momentum tied to entertainment moments and new formats
Simon framed the quarter’s product activity around “culture, creativity, and commerce,” describing efforts to participate in entertainment and fandom moments as they happen and translate them into new items and merchandising activations.
Among properties and categories he cited as Q1 “big movers” were “KPop Demon Hunters,” “the final season of Stranger Things,” and One Piece. He also pointed to “Mando Grogu coming out” and said Funko’s Star Wars business “is really showing some nice growth.” Simon also highlighted a Michael Jackson product tied to the current biopic release, describing it as an example of Funko being part of a cultural moment.
On innovation, Simon pointed to Bitty POP! as a key initiative, saying the line showed strength in Q1 after Q4 and was “rolling out into Walmart.” He also described seasonal and design variations, including a Bitty POP! bouquet concept for Valentine’s Day and new decorative approaches for anime properties like Demon Slayer.
“Turning shelves into stages” with events, D2C drops and partner activations
Simon said commerce execution included experiences meant to bring products to life for fans, which the company describes as “turning shelves into stages.” He detailed a presence at WrestleMania in Las Vegas that included a Pop! Yourself activation at WWE Fan Expo with on-site production of customized figures in exclusive gear.
He also said Funko launched a limited-edition WWE “covers” product on its direct-to-consumer site during the weekend and noted it was “selling for 3 to 4 times on eBay right now.”
In sports, Simon highlighted a “brand-new shop-in-shop” at Inter Miami’s new stadium, again featuring Pop! Yourself and an “exclusive Messi Pop!” available only at the venue. He also referenced Loungefly product included in the stadium assortment.
Loungefly resetting the business, cutting SKUs by 50%
Kong said Loungefly continues to benefit from “an exceptionally loyal fan base,” “high brand equity,” and prominent placement “in all of the Disney parks,” along with relationships with retailers such as BoxLunch and Hot Topic.
She also highlighted efforts to move into higher-priced product tiers, pointing to the brand’s first Swarovski collection launched last year. Kong said one piece priced at $400—well above Loungefly’s typical $80 to $90 price point—“sold out within hours.”
However, Kong emphasized that “this year’s really an important business reset for us,” adding that Loungefly “cut our SKUs back by 50%” and that “sales will be down as planned this year” to improve SKU productivity and profitability. She said the team is “already seeing the results of that.”
She outlined focus areas that include:
- Expanding styles beyond the mini backpack, including “figural” items; she said the Heihei product from Moana was Loungefly’s “number one SKU last year.”
- Growing accessories, with bag charms and pins “driving double-digit growth.”
- Reaching Gen Z through a new diffusion line described as more functional and affordable.
Guidance reiterated; tariffs and oil watched closely
LePendeven said the company expects momentum to continue in Q2 and issued second-quarter guidance calling for sales up “low single digits to mid single digits” and adjusted EBITDA of $5 million to $10 million.
For the full year, LePendeven reiterated Funko’s original outlook: sales “flat to up 3%” and adjusted EBITDA between $70 million and $80 million.
He said tariff rates “currently in effect are a little bit lower than we’d planned,” calling that “great news,” while adding the company is monitoring oil prices and has not yet seen a negative impact.
In response to an analyst question about tariff refunds, LePendeven said Funko has paid “approximately $20 million in IEPA tariffs” and is taking steps to pursue a refund, though timing remains uncertain. He added the company is also exploring “a market to monetize tariff claims.”
Addressing gross margin, LePendeven said the 44% result was driven by operational initiatives rather than “some kind of accounting adjustment,” including reduced discounting and promotional activity, renewed licensing agreements, and channel and sales mix. He said the company’s gross margin guidance of 42% to 44% implies the trend “should be able to hold for the rest of the year.”
On demand trends, LePendeven said global POS rose 6% in Q1, with wholesale POS up 12%. By geography, he said POS increased 6% in the U.S. and 28% in Europe, calling the alignment between “sell in” and “sell through” a “very healthy trend.”
Simon also discussed organizational changes, noting the hiring of new head of marketing and brand Nik Rupp, previously at Nike, and said longtime executive Andy Oddie moved into a new role as chief international officer with a focus on growth in Latin America and Asia.
Looking ahead, Simon pointed to upcoming film and sports moments, including the World Cup, and emphasized speed-to-market. He cited a WrestleMania-related example in which Funko dropped an IShowSpeed Pop! “right as he was walking out to the ring” on Funko’s site and fanatics.com, adding that fans can “expect a lot more” in the creator space and faster launches timed to moments.
Simon also teased a new “POP! Mystery” lineup planned for San Diego Comic-Con, featuring 4-inch Pop! figures in a “blind box mystery format,” and said Funko is seeing traction in “BookTok and Romantasy,” with announcements to come.
About Funko NASDAQ: FNKO
Funko, Inc is a pop culture consumer products company best known for its stylized vinyl figures, apparel, accessories and other licensed collectible goods. The company's signature product line, Funko Pop!, features bobblehead-style figurines that showcase characters from a wide array of entertainment franchises, including film, television, gaming, sports and music. In addition to vinyl figurines, Funko's portfolio encompasses plush toys, action figures, stationery, home goods and novelty items, all leveraging licensing agreements with major global brands.
Founded in 1998 by Mike Becker in Washington state, Funko initially focused on creating nostalgic bobbleheads before expanding its product offerings under current leadership.
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