Despite an increase in sales in the US, sales in Europe and other territories showed a drop, which Funko attributes to the effects of Covid-19.
In its consolidated financial results for the fourth quarter and fiscal year ended December 31st, 2020, the company reported that, on a geographical basis, net sales in the United States increased 18% to $171.5m. Net sales in Europe decreased 24% to $40.3m, and net sales in other international regions decreased 7% to $14.7m.
The year-on-year increase primarily reflects strength within the US which was partially offset by continued Covid-19 impacts within international regions, especially Europe.
The increase in US sales represented Funko’s largest ever quarter in the region, driven by 12% growth for the Pop! brand, contributing to a 1% growth for the brand overall. Net sales of non-figure products grew 30% compared to 2019, primarily driven by strength of Loungefly branded products, which increased 51% globally.
Direct-to-consumer sales nearly doubled compared to the previous year, driven by continued strong demand on Funko’s eCommerce sites and the launch of funkoeurope.com extending customer reach. 68% of sales were attributed to evergreen content, while the company continued to diversify its product portfolio through the launch of new introductions such as Snapsies.
“We are pleased to finish the year with strong fourth quarter results, including 6% sales growth, which reflects better than expected performance across our brands, products, channels and geographies,” said Funko CEO, Brian Mariotti. “Against a challenging environment in 2020, our teams were resilient, quickly adapted to the dynamic environment and remained focused on executing our strategic growth priorities. During the year, we successfully strengthened our direct-to-consumer platform, launched new games and toys that extended our reach, expanded our presence among key retail partners in mass and digital, and drove robust fan engagement through global virtual events.”
For the first quarter of 2021, Funko anticipates net sales will increase by approximately 30%, and in 2021, expects net sales growth of 25% to 30%, which reflects growth from pre-pandemic levels in 2019.
“We believe the company is strongly positioned to deliver solid top line growth and improved profitability in 2021,” continued Brian Mariotti. “We are remaining focused on our strategies to maximise Funko’s core pop culture platform, drive further category diversification, expand internationally and accelerate our direct-to-consumer business.” For the full year, we expect to achieve revenue growth of 25% to 30% versus 2020.”
“We feel confident about the trajectory of the business and believe we are well-positioned from a strategic, operational and financial perspective,” added Funko CFO, Jennifer Fall Jung. “We expect to continue investing for growth in 2021 while also driving strong Adjusted EBITDA margins and improvement on the bottom line.”