bill peters
The move marks the latest shakeup at the top for the struggling toy company.
Funko announced Thursday that it has named gaming and e-commerce veteran Cynthia Williams as its new chief executive officer. This marks yet another change at the top in the past two years as the toymaker tries to find the right leadership combination to survive its long run. Demand continues to be weak.
The company, known for its comic and movie-themed Funko Pop figures, announced the changes on the same day it reported mixed first-quarter financial results. However, the outlook for the second quarter was better than Wall Street expected.
Shares rose 12.2% in after-hours Thursday, following a steep decline over the past 12 months.
At Williams, Funko (FNKO) will bring on a gaming and e-commerce veteran who has worked at Hasbro, Microsoft and Amazon.com.
Williams' appointment is effective May 20th, and he will also join Funko's Board of Directors on the same date. Michael Lunsford will remain interim chief executive until Williams takes over.
Lunsford has been in the top job since Brian Mariotti announced last July that he was taking time off and quitting his job as Funko's chief executive, saying he needed to “recharge.” Mariotti returned to the CEO role near the end of 2022, replacing Andrew Perlmutter, after previously serving as CEO.
“After a thorough and comprehensive search process, we are thrilled to welcome Cynthia as CEO,” Jesse Jacobs, co-founder of the Chernin Group, which owns about a quarter of Funko's stock, said in a statement Thursday. I'm happy,” he said.
Mr. Williams was president of Hasbro Inc.'s (HAS) games division, which included Wizards of the Coast and games such as Dungeons & Dragons, Magic: The Gathering and Monopoly. Hasbro hired Williams to fill these roles in 2022, but she left the company last month.
Wizards of the Coast was an area of strength for Hasbro at the time, as enthusiasm for games and toys began to dry up elsewhere. However, some analysts and gamers felt that printing too many cards risked damaging the Magic ecosystem. And the segment risked alienating some game developers with a proposal (later shelved) to make them pay royalties.
At Microsoft (MSFT), Williams helped expand Xbox gaming, Funko said. During her time at Amazon (AMZN), she helped grow its fulfillment services.
Demand for toys is weak as prices of essential goods continue to rise, a trend that has continued for the past two years. Meanwhile, retailers have become more disciplined about what products they put on their shelves for sale.
Funko said in its earnings call Thursday that it is sticking to its full-year sales outlook. For the second quarter, the company expected revenue of $225 million to $240 million and adjusted net loss per share of 8 cents to 15 cents. Both exceeded analysts' expectations.
In the first quarter, Funko reported an adjusted net loss of 17 cents per share, which was less severe than the 30 cents per share loss expected by analysts surveyed by FactSet. Revenue fell 14% to $215.7 million, below expectations of $220.3 million.
Lunsford said in the release that Funko “continues to make progress toward reducing inventory levels and paying down debt.”
Inventory, or a company's unsold merchandise, was $112.3 million as of March 31, down from $119.5 million at the end of December. Total debt at the end of March was $246.4 million, down from $273.6 million at the end of last year.
-Bill Peters
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05/09/24 1826ET
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