Why Funko (FNKO) Shares Are Trading Sharply Lower

Funko Inc FNKO shares are trading lower by 24.07% to $8.12 Thursday morning after the company reported worse-than-expected fourth-quarter EPS and issued weak first-quarter guidance.

So what do traders and investors need to know?

What Happened: Funko reported quarterly losses of 35 cents per share which missed the analyst consensus estimate of a loss of 11 cents.

The company also reported quarterly sales of $333.04 million, which beat the analyst consensus estimate of $318.35 million by 4.6%. This sales figure is otherwise a 1% percent decrease over sales of $336.27 million in the same period last year.

Funko meanwhile saw first-quarter EPS as low as a loss of 90 cents or as high as a loss of $1.00, which is lower than the analyst consensus estimate of 6 cents.

Funko also had first-quarter revenue in the range of $225 million-$255 million, which is lower than the analyst consensus estimate of $295.61 million.

What Else: Alongside the earnings print, Funko announced today that Steve Nave has been appointed chief financial officer and chief operating officer, effective immediately.

Prior to joining Funko, Nave held several executive leadership positions with Walmart.com and Bluestem Brands, including serving as Walmart.com's CFO, COO and CEO, followed by serving as the CEO of Bluestem Brands.

On Thursday morning B of A Securities analyst Alexander Perry maintained Funko with a Neutral and lowered the price target from $12.5 to $11.

Company Commentary: "During the fourth quarter and in early 2023, we have made progress in addressing operational issues that impacted our results in the second half of 2022. We have strengthened our executive and operational management team and have taken significant steps to improve our operating efficiency," said CEO Brian Mariotti.

"We are gratified that the Funko brands continue to see strong consumer demand from our incredibly loyal and resilient global fanbase, as demonstrated by 37% direct-to-consumer growth and strong sell-through in the fourth quarter," Mariotti added.

According to data from Benzinga Pro, FNKO has a 52-week high of $27.79 and a 52-week low of $7.60.