Funko reported a loss of $41 million on a 28% U.S. sales decline in a brutal second quarter, which it attributed primarily to the impact of U.S. import taxes.  The announcement of tariffs in early April caused Funko's largest customers, who purchase goods shipped directly from China to the U.S., to pause their shipments to the U.S. for roughly two months, the company explained in its earnings call.  Those shipments did not resume until June, too late to save the quarter’s sales.   Funko also paused shipments headed to its warehouses in Q2.

In addition to the direct impact on sales, the company also had a significant hit to its margins due to a "shortfall in minimum guaranteed royalties" caused by the shipping interruption, the actual tariff expense, and an increase in reserves against inventory to cover anticipated liquidation costs of inventory, which is being affected by delays and price increases.

U.S. sales declined from $163.0 million in Q2 2024 to $117.9 million in Q2 2025; the sales decline for all territories was 22% to $193.5 million from $247.7 million in the year ago quarter. Sales in Europe were only down 4%.

The $41.0 million Q2 loss compared to a $5.4 million profit in Q2 2024.

Funko replaced CEO Cynthia Williams (formerly CEO of Wizards of the Coast) in July, replacing her with Michael Lunsford as interim CEO, who had previously held the same role after the departure of longtime CEO Brian Mariotti (see "Funko Replaces CEO").  Funko had shown accelerating losses in Q1, before the tariffs were announced (see "Funko Scrambling"), leading to workforce reductions and price increases.  A search for a permanent CEO is underway, with an announcement expected soon, Lunsford said in the call.

The company was able to get amendments to its loan agreements a few weeks ago, waiving a couple of covenants for a limited period, and is seeking to refinance its debt before the end of the year.  It has only $5 unused on its credit line, so is up against the limits to its liquidity.  With the earnings release, Funko also announced that it was preparing to sell up to $40 million in new stock at market prices to raise cash.  The situation required a second quarter of "going concern" statements in its financials.

On the positive side, Funko reported that its e-commerce sales and early POS reporting from its customers were not showing unit sales impacts from its price increases.  The company is predicting that second half sales will be down high single digits.

In addition to looking for new sources of equity and debt financing, the company is exploring "strategic options," which usually means a sale or merger of the company.