Funko Q3 2026: Margins Widen, Stock Dips Despite Earnings Beat

Funko's adjusted earnings per share of $0.16 for Q3 2026 came in 60% above the consensus estimate, with net sales also ahead of expectations. The beat extends a run of outperformance against Wall Street's EPS forecasts.

Gross margin widened to 45.2% from 40.2% a year ago, above the company's own guidance range, driven by lower tariffs, reduced minimum guaranteed royalties, favorable freight costs, and reserve adjustments. Adjusted EBITDA cleared the top of Funko's guidance range, and GAAP net income attributable to Funko climbed from the year-ago quarter.

Core Collectibles net sales grew 4.8%, led by Standard Pop!, Mystery Mini, and Advent Calendar launch timing, while gains in Europe and the Rest of World segment more than offset a decline in U.S. net sales. Loungefly fell 9.8% as the company worked through a deliberate SKU reduction of roughly 50% that management indicated is improving assortment productivity.

The stock sold off in after-hours trading despite the beats, even as Funko reiterated its full-year 2026 outlook for flat to 3% net sales growth and a gross margin of 46% to 47%. Those full-year figures include a $25.4 million tariff-related benefit booked in Q2, leaving investors to weigh how much of the year's margin strength is already behind the company heading into the fourth quarter.