As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the toys and electronics industry, including Funko (NASDAQ: FNKO) and its peers.
The toys and electronics industry presents both opportunities and challenges for investors. Established companies often enjoy strong brand recognition and customer loyalty while smaller players can carve out a niche if they develop a viral, hit new product. The downside, however, is that success can be short-lived because the industry is very competitive: the barriers to entry for developing a new toy are low, which can lead to pricing pressures and reduced profit margins, and the rapid pace of technological advancements necessitates continuous product updates, increasing research and development costs, and shortening product life cycles for electronics companies. Furthermore, these players must navigate various regulatory requirements, especially regarding product safety, which can pose operational challenges and potential legal risks.
The 4 toys and electronics stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 4% while next quarter’s revenue guidance was 0.8% below.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 6.1% since the latest earnings results.
Weakest Q2: Funko (NASDAQ: FNKO)
Boasting partnerships with media franchises like Marvel and One Piece, Funko (NASDAQ: FNKO) is a company specializing in creating and distributing licensed pop culture collectibles.
Funko reported revenues of $193.5 million, down 21.9% year on year. This print exceeded analysts’ expectations by 5.2%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ EBITDA and EPS estimates.
“As expected, our 2025 second quarter performance was impacted by a dynamic and uncertain tariff environment,” said Mike Lunsford, Interim Chief Executive Officer of Funko.
Funko delivered the slowest revenue growth of the whole group. Unsurprisingly, the stock is down 18% since reporting and currently trades at $3.
Read our full report on Funko here, it’s free.
Best Q2: Hasbro (NASDAQ: HAS)
Credited with the creation of toys such as Mr. Potato Head and the Rubik’s Cube, Hasbro (NASDAQ: HAS) is a global entertainment company offering a diverse range of toys, games, and multimedia experiences for children and families.
Hasbro reported revenues of $980.8 million, down 1.5% year on year, outperforming analysts’ expectations by 11.2%. The business had a stunning quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Hasbro delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems content with the results as the stock is up 4.2% since reporting. It currently trades at $80.84.
Is now the time to buy Hasbro? Access our full analysis of the earnings results here, it’s free.
Bark (NYSE: BARK)
Making a name for itself with the BarkBox, Bark (NYSE: BARK) specializes in subscription-based, personalized pet products.
Bark reported revenues of $102.9 million, down 11.5% year on year, exceeding analysts’ expectations by 2.8%. Still, it was a slower quarter as it posted a significant miss of analysts’ adjusted operating income estimates and EPS in line with analysts’ estimates.
As expected, the stock is down 1.7% since the results and currently trades at $0.84.
Read our full analysis of Bark’s results here.
Mattel (NASDAQ: MAT)
Known for the creation of iconic toys such as Barbie and Hotwheels, Mattel (NASDAQ: MAT) is a global children's entertainment company specializing in the design and production of consumer products.
Mattel reported revenues of $1.02 billion, down 5.7% year on year. This result came in 3.2% below analysts' expectations. All in all, it was a mixed quarter for the company.
Mattel had the weakest performance against analyst estimates among its peers. The stock is down 8.9% since reporting and currently trades at $18.40.
Read our full, actionable report on Mattel here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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