Funko reported sales and profit declines in the most recent quarter and has continuing liquidity concerns as it wrestles with tariffs and declining demand, according to its Q3 2025 earnings report. Worldwide sales were down 14.3% to $250.9 million from $292.8 million in the year ago period. U.S. sales were down 20.1%, accounting for $39 million of the $41.9 million decline.
After currency conversion, Funko lost $992,000 in Q3, compared to an $8.94 million profit in Q3 2024. While a big improvement from the $41 million loss it reported in Q2 (see “Funko Loses $41 Million“), Funko has little room to maneuver without running out of cash.
Although the company was able to negotiate some relief on its loan agreements after the initial crisis earlier this year (see “Funko Scrambling“), it is now forecasting that it will not be able to meet the requirements of its renegotiated loan covenants and must raise additional cash or negotiate further loan relief or be in default. That led the company to continue the “going concern” opinion in its financials. “[T]here is substantial doubt about our ability to continue as a going concern for the next twelve months,” the company said in its SEC filing.
The company described a “…challenging retail environment where retailers have slowed their restocking, prioritized lower inventory levels, and, in some cases, have canceled their orders.” Much of the difficulties are attributed to tariffs. “Tariffs reduce net sales, gross margin, and net income, and could impact consumer discretionary spending in future periods,” the company said.
This was the first quarterly report new CEO Josh Simon (see “New Funko CEO“), who did point to some positive developments, including good sales of Bitty POP!s, which will be out-of-aisle displays at 1,800 Walmarts later this month; a push into more blind box products, including expansion of its Mystery Minis and Premium Blind Box lines; and a planned expansion of vending machines and POP! Yourself kiosks. Funko is also one of the few companies that will have merch tied to Kpop Demon Hunters on store shelves for the holiday season.
Funko confirmed that a sale of the company and other strategic transactions continue to be under consideration, along with a search for new debt financing.
Source: ICv2
