Funko, Inc. FNKO is scheduled to report second-quarter 2022 results on Aug 4, 2022, after the market closes. In the last reported quarter, the company delivered an earnings surprise of 70%.
The Trend in Estimate Revision
The Zacks Consensus Estimate for second-quarter earnings is pegged at 22 cents per share, indicating a decline of 45% from 40 cents reported in the year-ago quarter. For revenues, the consensus mark is pegged at $299.8 million. The projection suggests an increase of 27% from the year-ago quarter.
Let’s take a look at how things have shaped up in the quarter.
Factors to Note
Funko’s second-quarter top line is likely to have benefited from solid demand across product categories, capacity creation efforts, diversification of manufacturing footprint and international expansion efforts. Broad-based strength across geographies, brands and channels bodes well for the company. Solid contributions from the Loungefly brand are likely to have boosted the company’s second-quarter top line.
Emphasis on direct-to-consumer channels through operational improvements is likely to have boosted the company’s performance in the second quarter. During the previous quarter, DTC channels rose 36% year over year, owing to higher conversion rates. With increased focus on expanded product offerings, greater use of exclusives and technology enhancements, the momentum is likely to have continued in the second quarter as well.
However, supply chain disruptions are likely to have affected the company’s performance in the second quarter. A rise in freight costs is also likely to have hurt margins in the to-be-reported quarter.
What Our Model Says
model does not predict an earnings beat for Funko this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Earnings ESP: Funko has an Earnings ESP of -5.27%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company carries a Zacks Rank #3.
Stocks Posed to Beat Earnings
Here are some stocks from the Zacks Consumer Discretionary space that investors may consider as our model shows that these have the right combination of elements to post an earnings beat:
Callaway Golf Company ELY has an Earnings ESP of +2.69% and a Zacks Rank of 2.
Shares of Callaway Golf have declined 30.1% in the past year. ELY’s earnings surpassed the consensus mark in all the trailing four quarters, the average being 955.5%.
DraftKings Inc. DKNG has an Earnings ESP of +1.29% and a Zacks Rank of 2.
Shares of DraftKings have declined 68.4% in the past year. DKNG’s earnings surpassed the consensus mark twice in the trailing four quarters and missed twice, the average miss being 9.3%.
Dolby Laboratories, Inc. DLB has an Earnings ESP of +5.00% and a Zacks Rank #3.
Shares of Dolby Laboratories have declined 20.4% in the past year. DLB’s earnings surpassed the consensus mark thrice in the trailing four quarters and missed once, the average surprise being 14.7%.
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