Funko Inc (NASDAQ:FNKO) shares traded higher on Friday afternoon on better-than-forecast fourth quarter results and management's commentary that it expects to see significant profit improvement for 2024.
The company, which manufactures licensed limited pop culture collectibles such as figurines and bobbleheads, expects its bottom line to improve significantly in 2024 compared to 2023 despite headwinds from the Hollywood strikes and uncertainty around shipping costs due to the situation in the Red Sea.
“Our belief is based on the actions we are taking to, among other things, further expand our direct-to-consumer (DTC) business and increase sales of Pop! Yourself and limited-edition products – areas we control and can grow profitably,” Funko’s interim CEO Michael Lunsford said in a statement.
Funko projected 2024 sales of $1.05 billion to $1.1 billion, compared to Wall Street estimates of $1.07 billion, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the range of $65 million to $85 million.
For the first quarter, it forecast sales of $214 million to $227 million, missing estimates of $242.75 million, and adjusted EBITDA between nil and $5 million.
Meanwhile, for the fourth quarter that ended on December 31, 2023, the company significantly narrowed its net loss to $10.8 million or $0.21 per share, compared to $42.2 million or $0.89 per share in the year-ago quarter.
On an adjusted basis, it recorded earnings per share (EPS) of $0.01, up from a loss per share of $0.35 in the year-ago quarter and ahead of estimates of a loss per share of $0.02.
Sales were $291.2 million, down from $333 million in the year-ago quarter but exceeding estimates of $282 million.
Funko shares were up 7.1% at about $7 on Friday afternoon.