Funko, which bought Loungefly this summer, is expanding the fashion accessories supplier into mass retailers with the recent addition of Target, Funko CEO Brian Mariotti told analysts as the company released its first earnings as a publicly-traded company.

Funko reported Q3 net income of $8.2 million, down 52% from $17.1 million a year earlier, due in large part to expenses tied to the company’s IPO earlier this fall. Q3 revenue rose 21% to $142.8 million due partly to the acquisitions of Underground Toys and Loungefly.

Loungefly posted $800,000 in net income on $7.1 million in revenue between its acquisition in late June and the end of Funko’s fiscal Q3 on Sept. 30.

In expanding Loungefly into Target, Funko landed a four-foot section for products related to Netflix’s “Stranger Things” series.

Funko also has added distribution for its core vinyl figures at Costco and Walgreen’s, Mariotti said.

Products tied to the mobile game Five Nights at Freddy’s, Star Wars, Harry Potter and Game of Thrones were among top-sellers in Q3. Funko is the master toy licensee for Five Nights at Freddy’s and has generated $100 million in wholesale revenue from the property during the past 18 months, Mariotti said.

On the retail side, GameStop accounted for 12% of Funko’s $346.6 million in revenue during the nine months ended Sept. 30, while Hot Topic generated 6%, down from 10% a year earlier, and Toys R Us was 3.6%. The company didn’t release similar figures for Q3, but said no retailer accounted for more than 10% of net sales in the quarter. While it said in early October it didn’t expect any revenue from Toys R Us in Q4 and lowered its sales forecast by $5.1 million, Funko has resumed shipments to TRU in a “prudent manner,” said CFO Russell Nickel.

Sales of Funko’s vinyl figures, which accounted for 80% of the company’s Q3 revenue, rose 21% to $114.8 million, while those from “other” products jumped 17.8% to $28 million. Its number of “active” properties in Q3 – those generating revenue — rose to 400 from 316 a year earlier with sales averaging $400,000 per property. U.S. sales increased 6.5% to $104.2 million, while those in Europe nearly doubled to $38.5 million.

Contact:

Funko, Russell Nickel, Chief Financial Officer, 425-783-3616, russell@funko.com