GET DAILY SIGNALSFunko (FNKO) Delivers Q3 Sales +3% Beat but Stock Falls -11% on Outlook
Key Takeaways
- Funko reported third quarter 2026 net sales of $258.3 million, up 3% year over year and ahead of analyst consensus estimates.
- Adjusted earnings per share (EPS) reached $0.16, comfortably above the roughly $0.10 Wall Street expected, while diluted EPS on a GAAP basis was $0.13.
- Gross margin expanded to 45.2% from 40.2% a year earlier, a key driver of the quarter's profitability beat.
- Adjusted EBITDA rose to $32.1 million from $24.4 million a year ago.
- Management reiterated full-year guidance, including flat-to-up-3% net sales growth and $100–$110 million of adjusted EBITDA.
- Despite the beats, shares fell sharply in the immediate after-hours session as investors weighed slower sell-through and an unchanged sales outlook.
Why These Results Matter for Investors
Funko's third quarter results matter because they test whether the company's turnaround strategy can convert stronger profitability into durable, top-line momentum. Over the past two years, revenue has contracted as the collectibles maker worked through inventory, licensing, and demand challenges. This report showed a meaningful step forward on margins and balance-sheet health, even as sales growth remained modest and uneven across categories and regions. For investors, the quarter offered a clearer read on whether cost discipline and a more focused assortment are translating into sustainable earnings power, and whether the holiday-heavy fourth quarter can keep that momentum intact. I also checked this using Tickeron’s AI Screener to see how FNKO compares to others in the industry.
The Quarter in Detail
For the third quarter ended September 30, 2026, Funko reported net sales of $258.3 million, a 3.0% increase from $250.9 million in the prior-year period and ahead of consensus estimates near $250.7 million. Net income attributable to Funko was $7.5 million, up from $0.9 million a year ago. Diluted EPS was $0.13 on a GAAP basis, compared with $0.02 a year earlier, while adjusted EPS came in at $0.16, exceeding the consensus estimate of roughly $0.10.
Gross profit reached $116.9 million, lifting gross margin to 45.2% from 40.2%, driven by improved product economics and cost management. Adjusted EBITDA rose to $32.1 million from $24.4 million. By segment, Core Collectibles net sales grew 4.8% to $210.1 million, while Loungefly declined 9.8% to $40.3 million amid an ongoing SKU rationalization. Internationally, Europe and Other International each grew double digits, helping offset a 2.4% decline in United States net sales. From what I see, reviewing these segments through Tickeron’s AI Pattern Search Engine highlights the mixed regional performance.
Market Reaction and What It Signals
The market's response to Funko's third quarter was notably cautious despite headline beats. While revenue, adjusted EPS, and adjusted EBITDA all came in above consensus, shares fell roughly 11% in the immediate aftermath of the release. Investors appeared to focus on signs of slowing momentum: global point-of-sale units declined in the quarter, United States sales slipped, and Loungefly contracted as management trimmed its assortment. An unchanged full-year sales outlook—implying a flat-to-down fourth quarter—further dampened enthusiasm. The reaction underscores that the market is now scrutinizing FNKO's ability to sustain top-line growth, not just its improving margins and cleaner balance sheet.
Looking Ahead and Key Factors to Watch
Looking ahead, investors will be watching whether Funko can hold its margin gains while reigniting sales growth. Management reiterated full-year guidance for net sales of flat to up 3%, a gross margin of 46% to 47%, and adjusted EBITDA of $100 million to $110 million, figures that already incorporate a tariff-related benefit booked earlier in the year. With year-to-date sales up about 5%, the unchanged range points to a flattish fourth quarter, making the holiday season a critical test.
Several catalysts are worth monitoring. New product initiatives such as Pop Mystery have reportedly sold through faster than expected, and a growing pipeline of licensed properties, including Hello Kitty and Harry Potter, is slated for 2026. The company is also experimenting with live commerce and new retail experiences that could broaden its customer base.
At the same time, risks remain. The Loungefly reset, softening United States demand, promotional discipline, and broader consumer spending on discretionary collectibles will all influence the trajectory. Balance-sheet progress—total debt declined to about $195.9 million from $225.3 million at year-end 2025—provides added flexibility, but the central question is whether improved profitability can be paired with sustainable revenue momentum in the quarters ahead. I'm watching this closely as the holiday period unfolds.
Using AI Tools in My Research Process
In my own analysis of earnings reports like this one, I often turn to Tickeron’s AI Screener to quickly filter for similar names and spot technical patterns that might not be obvious from the numbers alone. It helps me compare FNKO against peers on fundamentals and momentum without spending hours on manual screens, which keeps my process efficient when reviewing quarterly results.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
FNKO's RSI Oscillator leaves overbought zone
The 10-day RSI Indicator for FNKO moved out of overbought territory on October 23, 2026. This could be a sign that the stock is shifting from an upward trend to a downward trend. Traders may want to look at selling the stock or buying put options. Tickeron's A.I.dvisor looked at 35 instances where the indicator moved out of the overbought zone. In 31 of the 35 cases the stock moved lower in the days that followed. This puts the odds of a move down at 89%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on October 29, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on FNKO as a result. In 65 of 88 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 74%.
The Moving Average Convergence Divergence Histogram (MACD) for FNKO turned negative on October 28, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 45 similar instances when the indicator turned negative. In 34 of the 45 cases the stock turned lower in the days that followed. This puts the odds of success at 76%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where FNKO declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 78%.
FNKO broke above its upper Bollinger Band on October 02, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Bullish Trend Analysis
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 3 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
FNKO moved above its 50-day moving average on October 05, 2026 date and that indicates a change from a downward trend to an upward trend.
The 10-day moving average for FNKO crossed bullishly above the 50-day moving average on October 09, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 17 of 19 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 89%.
Following a +2.61% 3-day Advance, the price is estimated to grow further. Considering data from situations where FNKO advanced for three days, in 253 of 308 cases, the price rose further within the following month. The odds of a continued upward trend are 82%.
The Aroon Indicator entered an Uptrend today. In 158 of 212 cases where FNKO Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 75%.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of 2 (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.957) is normal, around the industry mean (1.792). FNKO's P/E Ratio (-218.667) is considerably lower than the industry average of (1.385). Projected Growth (PEG Ratio) (0.040) is also within normal values, averaging (1.411). Dividend Yield (0.000) settles around the average of (0.032) among similar stocks. P/S Ratio (0.312) is also within normal values, averaging (4.604).
The Tickeron Price Growth Rating for this company is 36 (best 1 - 100 worst), indicating steady price growth. FNKO’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron PE Growth Rating for this company is 71 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is 91 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. FNKO’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 87, placing this stock worse than average.
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General Information
a manufacturer of consumer products, toys and collectibles
Industry RecreationalProducts
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