Funko, the company behind the popular collectible figures, is facing financial difficulties, according to its latest SEC filings. The documents, filed on November 6, express substantial doubt about the company’s ability to continue operating over the next 12 months. This uncertainty is attributed to a challenging retail environment, largely resulting from US tariffs on imports from several countries.

The company’s third-quarter report, which ended on September 30, reveals a significant decline in sales. Global sales dropped by 14.3 percent, while domestic sales decreased by 20.1 percent year-over-year. Despite this, Funko has reported strong sales for its Bitty POP! line and plans to expand its blind box offerings. The company is also set to be one of the few retailers selling KPop Demon Hunters merchandise during the upcoming holiday season.

However, the broader outlook remains uncertain. The ongoing US tariffs, currently being challenged before the Supreme Court, have strained retailers, leading to reduced restocking and canceled orders. As a result, Funko may need to raise additional capital, renegotiate its loans, or risk default to stay afloat. The company has secured some loan relief, but it is unclear whether it can meet the conditions of its loan agreements.

Funko’s financial struggles are not isolated, as many retailers are facing similar challenges due to the tariffs. The company’s situation highlights the impact of trade policies on businesses and the economy. With the holiday season approaching, Funko’s ability to navigate these challenges will be crucial to its survival.

The company’s future remains uncertain, and its ability to adapt to the changing retail landscape will be essential. As the retail environment continues to evolve, Funko must find ways to mitigate the effects of the tariffs and maintain its position in the market. The outcome of the Supreme Court challenge to the tariffs may also have significant implications for Funko and other affected retailers.