The pop culture product company Funko released its fourth quarter results this week, showing a strong finish after a brutal year in which global sales were strongly impacted by the COVID-19 pandemic. While Funko’s profitability suffered mightily through most of the year, the company says its recovery in Q4 leads management to predict a dramatic turnaround in 2021, with an estimated 25 to 30 per cent growth over fiscal 2020.
Funko closed out the year with a strong Q4 that saw U.S. sales soar by 18% and world sales increase by 6%, but due to a disastrous Q2 and Q3, Funko still ended up with an 18% sales revenue decrease for 2020, according to the company’s year-end financials. Funko sales in Q4 were $226.5 million, up from $213.6 million for the same period in 2019.
Funko says their growth in the fourth quarter was heavily concentrated in the U.S. Sales in Europe took a serious beating even in the fourth quarter, with sales down 24% in Europe and 7% in other non-U.S. regions, the company revealed. The Pop! brand of figurines was up 12% in the U.S. and 1% globally. Non-figure revenue increased by a much more impressive 30%.
Those Q4 results were crucial for the company after it suffered major dislocations through the spring and summer, as lockdowns and retail closures or restrictions dramatically impacted sales. The second quarter in particular was disastrous for the firm, with sales down almost half at 49 per cent less than in the same period in 2019. Funko’s third quarter saw some recovery, with sales down by 14 per cent, leading to a surprisingly strong fourth quarter. Net earnings in Q4 of 2020 hit $8.9 million in Q4 2020, as opposed to a loss of $4.2 million for the same period in 2019.
For the year, Funko sales were $652.5 million, down 18% from $795.1 million in 2019. Despite the decline, Funko was profitable, albeit at lower levels: 2020 earnings were $3.96 million, down 66% from $11.725 million in 2019.
During a conference call, Funko revealed more good news in that retailers are taking more pre-orders, including for products that are six to nine months out from fulfillment. As a result, Funko is predicting 30% growth in Q1, and between 25 to 30% growth for the 2021 fiscal year.