EVERETT, WA — Funko sales are forecast to fall 8% in Q4 to $214 million due to a “challenging” U.S. retail market and lower than expected purchases by the company’s top customers, the company said. Walmart and Target are among Funko’s top customers. Analysts had forecast $264 million in Q4 revenue.

Funko also experienced a  “softness in sales “ of products tied  to tentpole films, the company said.  The downturn in revenue was partly offset by strong sales growth in Europe and with Funko’s Loungefly business.

For Q4, Funko estimates  U.S. sales will decrease 9%, while those in international markets drop 8%, due largely to declines in Australia and Canada. Sales of collectible figures fell 10%, while revenue from other products was down 3%. Loungefly products posted a double-digit increase in revenue.

As a result of the sales decline, Funko incurred a $16.8 million charge to write down “slower moving” inventory.  Adjusted net income will be in the $8.1-$8.9 million range.