Funko, Inc. (NASDAQ:FNKO) Q4 2024 Earnings Call Transcript

Funko, Inc. (NASDAQ:FNKO) Q4 2024 Earnings Call Transcript March 6, 2025

Funko, Inc. beats earnings expectations. Reported EPS is $0.08, expectations were $0.02.

Operator: This call is being broadcast live at investors.funko.com. A playback will be available for at least one year on the company’s website. I want to remind everyone that during the course of this call, management’s discussion will include forward-looking information. These statements represent our best judgment as of today about the company’s future results and performance. Our actual results are subject to many risks and uncertainties that may differ materially from those stated or implied, including those discussed in our earnings release. Additional information concerning factors that could cause actual results to differ materially is contained in our most recently filed SEC reports. In addition, during this call, we refer to non-GAAP financial measures that are not prepared in accordance with US Generally Accepted Accounting Principles and may be different from non-GAAP financial measures used by other companies.

Investors are encouraged to review Funko, Inc.’s press release announcing its 2024 fourth quarter financial results for the company’s reasons for presenting non-GAAP financial measures. A reconciliation of the non-GAAP financial measures to the most direct comparable GAAP financial measures is also attached to the company’s earnings press release issued earlier today. One item to note: As disclosed in our Q4 press release, following correspondence with the SEC, we no longer adjust our non-GAAP financial measures for one-time costs related to inventory. This change in presentation increases adjusted net loss by $29.3 million and lowers adjusted EBITDA by $39.0 million for the year ended December 31, 2023. I will now turn the call over to Cynthia Williams.

Cynthia?

Cynthia Williams: Good afternoon, everyone. And welcome to Funko, Inc.’s 2024 fourth quarter financial results conference call. In 2024, we began laying the foundation for Funko, Inc.’s future. We stabilized net sales at over $1 billion and drove gross profit and adjusted EBITDA growth by more than $100 million. We gained momentum in Q4, delivering $294 million of net sales, which was at the top end of our guidance range and up over 1% year-over-year, thanks in part to direct-to-consumer growing to 29% of our overall sales. Gross margin reached 42% and adjusted EBITDA of $26 million exceeded expectations. Yves will provide a deeper look at our financial results shortly. I continue to be proud of our team’s ability to exceed expectations and bring fandom to life, and Q4 exemplified this.

We saw major wins across our key growth areas, particularly in sports, Pop Yourself, and Biddy Pop, where we continue to build momentum. In just the last quarter of 2024, we grew our core collectibles business over 10% and sales outside of the US grew by 23%. This excitement was echoed by our retail and distribution partners who we recently met with at three major global toy fairs in London, Nuremberg, and New York. Their overwhelming enthusiasm for our innovative products reaffirms the strength of our strategy and the opportunities ahead. One strong example was the feedback we received from retailers and media for Biddy City, a Biddy Pop expansion where fans can build the miniature world of their dreams, which we revealed at the New York Toy Fair this past weekend.

I’m going to highlight wins in Q4 and couple them with examples of how we’re driving results further in Q1. Sports product launches and new licensing agreements in the back half of 2024 opened exciting avenues to engage fans across multiple leagues and teams. Our recent collaboration with the NFL and NBA has already redefined how fans express their fandom, and we are just beginning to tap into the $35 billion sports memorabilia market. Currently, sports represent only 4% of our total revenue, and we see tremendous potential for growth in this category. In Q4, Pop Yourself took center stage with our expanded NFL partnership, allowing fans to customize figures with their favorite team’s logos. The energy around this launch was undeniable as we saw a sharp spike in sales for the NFL products throughout the season.

Building on this momentum, in Q1 of this year, we launched NBA-themed Pop Yourself customization, leveraging the NBA All-Star Game in February to introduce this experience to a massive audience of basketball fans. This partnership and expansion mark a significant step in bringing millions of new sports enthusiasts into the Funko, Inc. ecosystem. Capitalizing on fan excitement, we launched items tied to major sporting events. In November, following the Los Angeles Dodgers World Series victory, our commemorative release drove strong year-over-year revenue growth. Similarly, right after the Super Bowl, we released the Philadelphia Eagles 2025 Super Bowl Champions five-pack in partnership with Fanatics, which flew off the virtual shelves. Expanding into collegiate athletics, we launched our first-ever name, image, likeness Pop in November featuring USC basketball phenom, Juju Watkins.

The pre-sale, which included an exclusive chase variant limited to just 25 signed figures, generated immediate demand and positioned us as an emerging player in the NCAA merchandise space. Looking ahead, we will continue refining our sports fan engagement strategy by selling where the fan is, through regional retail capsules, expanding Pop Yourself into new geographies, and strengthening partnerships, particularly in the NFL and NBA, to drive deeper fan engagement across our product lines. Music remains a critical category for Funko, Inc. In 2024, the Doja Cat Pop was a top-selling figure in our direct-to-consumer channel, bringing in a new wave of customers and reinforcing the power of artist collaborations. Doja’s team approached us with the idea of creating a special edition Pop to commemorate her headline performance at Coachella.

Similarly, this year, within minutes of her Grammy wins, we launched the Sabrina Carpenter Pop Rocks figure, tapping into the massive enthusiasm surrounding her record-breaking success. Our partnerships with artists continue to grow, reflecting that music icons across genres and generations want to work with us as much as their fans want to express their passion for the artist. In the area of gaming, in November, Mondo launched a pre-sale for Blizzard’s World of Warcraft twentieth anniversary soundtrack, timed in conjunction with their celebratory livestream. This $90 collector album was our first Blizzard collaboration and one of Mondo’s highest revenue albums of the year. We continue to be excited about the potential of Mondo and its ability to serve the growing community of high-end collectors, gamers, and music enthusiasts alike.

Turning to our core fans, we continue to delight them across best-selling pop culture genres. In Q4, anime product sales grew 7% year-over-year. In fact, One Piece, the world’s most popular anime franchise, was the top-selling property after our own IP for the full year. Within the entertainment fandom, Wicked excitement reached fever pitch with the movie release in November. Funko, Inc. and Loungefly both played a key role in bringing the magic of Oz to our fans. The excitement was further amplified by the social media buzz around Ariana Grande wearing the Loungefly Glenda bag while arriving in London for the premiere. Even without a tentpole movie release, beloved evergreen properties like Harry Potter, Star Wars, and Batman continue to delight core fans.

We’ve seen these evergreen characters work particularly well in our Biddy Pop line, building on the growing miniature collectibles trend. In fact, our Biddy line grew an impressive 83% year-over-year in Q4. And as noted before, there’s real excitement about the world-building extension with Biddy City. At Funko, Inc., we believe everyone is a fan of something, and we continue to delight core fans in celebration of blockbuster entertainment releases and beloved evergreen characters while also expanding into large fandoms, music, and gaming. We are well-positioned to serve these fandoms through our industry-leading portfolio of licensed IP and partnerships. Our direct-to-consumer channel enables us to learn more about our fans and how to better serve them.

We saw D2C increase to 29% of gross sales, up from 25% in Q4 2023. This channel continues to deliver higher margins and critical consumer insights, helping us refine product offerings and enhance personalization. Pop Yourself, which is currently available through our direct-to-consumer channel, has been our fastest-growing product line with year-over-year growth of 110% in Q4 and 185% in all of 2024. This has also been a terrific customer acquisition channel, bringing nearly 800,000 new fans into the Funko, Inc. ecosystem in 2024 alone, proving personalization is a powerful way to connect with new fans. Our fan loyalty program, Fan Rewards, added 120,000 new members in 2024, bringing total membership to over 280,000. These fanatics, our most valuable customers, account for 26% of US website sales and spend nearly twice as much as non-members.

With over 40% of loyalty members joining in the last year, we see a huge opportunity to continue growing membership and improving their experience through further enhanced personalization and exclusive offerings. Additionally, I want to share some updates on how we’ve strengthened our leadership team with key additions. Jason Herenstein, CFO of Collector Holdings, joined our board in December, bringing deep expertise in collector trends and behaviors across sports memorabilia grading, trading cards, and gaming. His insights further enhance an already engaged and innovative board. We up-leveled two key positions and added one new position. Jen Reeves, our new SVP of Brand, previously helped drive Stanley 1913’s viral success and skyrocketing sales of the Quencher.

We are excited to see her elevate Funko, Inc.’s brand positioning and drive deeper engagement with our fans. Glenn Abell, SVP of North America Sales, brings extensive experience from Mattel, Moose Toys, and LEGO, positioning Funko, Inc. for global distribution expansion and transformative sales operations. Zvi Geffen has joined as VP and Head of Business Development, bringing extensive sports licensing expertise from his senior roles at the Major League Baseball Players Association and TOPS Trading Company. His leadership will be instrumental in expanding our presence in sports fandoms. As we move into 2025, we anticipate modest top-line growth with momentum accelerating in the back half of the year as our strategic initiatives begin taking effect.

Similar to others in our industry, we’re experiencing softening consumer behavior in the US market, and we’re navigating the uncertainty of tariffs and inflation. However, we remain optimistic in our ability to navigate these external challenges thanks to our proactive mitigation plans, a high-performing leadership team, and continued disciplined execution. With that, I will hand it over to Yves to share more about our financials and our outlook for the year ahead.

Yves LePendeven: Thanks, Cynthia. Hey, everyone. Thanks for joining us today. For the fourth quarter, total net sales were $293.7 million, up 1% over the same quarter in 2023 and at the top end of our guidance range. Direct-to-consumer sales increased 20% year-over-year and comprised 29% of our gross sales compared with 25% in last year’s Q4. Sales in Europe were up more than 20%, driven by strong seasonal performance at our key retail partners across our G5 markets. This helped offset softness in the US, where some mass retailers limited purchases to end the year with leaner inventory positions. Gross profit was $124.4 million, and gross margin was 42.4%. Last year’s Q4 gross profit was $109.4 million, equal to 37.6%, meaning we delivered a 480 basis point improvement.

This was driven by a more favorable sales mix, lower product costs, and reduced freight and inventory reserve charges. SG&A expenses were $102.8 million, slightly above our guidance range, largely due to higher-than-anticipated marketing expenses to help fuel DTC sales. SG&A expenses included $1.6 million of nonrecurring charges compared with $8 million in Q4 2023. Adjusted net income was $4.4 million, or $0.08 per diluted share, well above our guidance range for the quarter. This marks a $4.3 million improvement over $0.1 million in Q4 of 2023. And finally, adjusted EBITDA was $26.3 million, which also was well above our guidance range. For the full year, net sales were $1.05 billion compared to $1.1 billion for 2023. Adjusted EBITDA significantly improved to $94.7 million compared to negative adjusted EBITDA of $11.8 million for 2023.

Turning to our balance sheet. At December 31, we had cash and cash equivalents of $34.7 million, which is after paying down $40.6 million of debt in the fourth quarter. Our total debt was approximately $182.8 million, down considerably from $273.6 million at the end of last year and down from $223.4 million at the end of the third quarter. Net inventory was $92.6 million, down more than 20% from the end of 2023, and down more than 60% from the end of 2022. And total company liquidity increased to $124.7 million from $83.5 million at the end of last quarter and $57 million at the end of 2023. Turning now to our outlook. We expect 2025 full-year net sales to be up modestly over 2024 and adjusted EBITDA to be slightly lower than 2024 at the midpoint of the range.

Before I get into the specifics, I would like to provide context. Our outlook includes the anticipated impact of 20% tariffs on imports from China that have been announced through February 27, 2025. It does not, however, account for any further tariffs as the impacts of such actions remain uncertain. It’s worth noting that after the initial 10% tariffs on China imports, we plan to give stronger guidance for both net sales and adjusted EBITDA. But we’ve now incorporated both the incremental 10% tariffs and weakening consumer behaviors in the US market. With our current guidance, we now expect both net sales and adjusted adjusted EBITDA to be down year-over-year in the first half of 2025 and then up in the second half of the year. Our confidence in the second half growth is based on things we can control, which include first, mitigating the impact of tariffs through all available strategies, including renegotiating factory costs, accelerating our shift in production to other sourcing countries, and implementing pricing adjustments.

Second, driving direct-to-consumer sales, our most profitable channel, by expanding Pop Yourself into new international territories in late 2025, and enhancing our customer acquisition practices through funko.com experiences. And third, investing in trade marketing with our strategic retail partners and opening new points of distribution. Thanks to our focus on inventory management, we have all but eliminated sales of our Funko Pop products into discount channels, which we anticipate will revitalize our brand value and shopping experience for our fans. Our confidence in these actions is both bolstered by the strength of our brand as evidenced by the continued growth we have seen in EMEA, including the double-digit POS growth over the last four weeks.

For the full-year 2025 outlook, we expect net sales between $1.05 billion and $1.102 billion and adjusted EBITDA between $80 million and $100 million. For the 2025 first quarter, our guidance is as follows: Net sales between $188 million and $198 million, gross margin of approximately 39%, SG&A expense of approximately $91 million, adjusted net loss between $25 million or $0.48 per share and $22 million or $0.40 per share. Finally, we expect negative adjusted EBITDA between $14 million and $9 million. Cynthia, that’s it for our financial results. Back over to you.

Cynthia Williams: Thanks, Yves. In summary, we ended 2024 on a positive note with a better-than-expected overall financial performance for the quarter. I’m confident in our ability to navigate the current complexities and deliver our future growth propelled by our strengthened team, our strategic roadmap, and our dedicated fans. With that, we’ll open the call for questions. Operator?

Q&A Session

Operator: Thank you. We’ll now open the line for questions. Again, to ask a question, please dial star one. The first question is from the line of Stephen Laszczyk with Goldman Sachs. Stephen, your line is now open.

Stephen Laszczyk: Hey. Great. Thanks for taking the questions. Maybe to start off here, maybe for both Cynthia and Yves, if you want to jump in as well. I’m curious if you could speak a little bit more about the assumptions you’re underwriting and your guidance for the year. I know you called out tariffs and consumer sentiment. Also seems like there’s some green shoots elsewhere in the business, you know, perhaps on the direct-to-consumer side and sports side. I was wondering if you could maybe isolate some of the headwinds and tailwinds you’re expecting to see this year from these factors and if there were upside or downside risks to the guide for the year, where you think those upside and downside risks might lie?

Cynthia Williams: Hi, Stephen. It’s Cynthia. Thanks for the question. You’re right. There’s a lot of green shoots that we’re seeing right now that we are excited about. In particular, I’ll start with the most recent of the reaction we got at New York Toy Fair this weekend to the Biddy City that we revealed. I’m sorry I missed you when you came by the booth. I’d already left. But I hope you enjoyed seeing it as well. You can see that it’s a mix of licensed IP and our own IP that allows you to build the miniature city of your dreams and really just display your fandom the way you’d like to. And I have to say I had the opportunity to show it to several of our major retailers and got phenomenal feedback about it during the meeting.

So that’s certainly one green shoot. Europe’s POS is probably the strongest. Seeing every single major retailer in Europe be at double digits in POS is reason to believe about the strength of our brand and our products. A lot of what you hear us talking about that we’re going to be doing in the US retail is based off what we see working there. If you’ve ever had a chance to go into an HMV in London, you’ve certainly seen the strength of the fixtures and the display. It feels like you’re in a Funko, Inc. shop. It’s just beautifully executed. And we’ve now hired a trade marketing person to help us do similar things in our meetings with the retailers. You know, I’d say right now we have a list of requests longer than what we’re probably able to do in a given year.

So we’ll be prioritizing some of those, but we’re excited to elevate that. I’d say the third one I’ll talk about before I jump into sports, so more on retail execution, is our inventory levels. You know, we’re at a very healthy position in our inventory levels to the point that we really won’t have inventory that we would be selling directly into closeout channels. Now that has a slight impact on our top-line sales, but it will have a real benefit on not only our margin but on our perception at retail. It doesn’t do the brand any good if a fan has bought the product and then they go into a closeout channel and see that same product for, say, four dollars. It just dilutes the value of the brand. So I’m very excited that we’re at a place that we don’t see that happening or to a very minor degree this year.

On the sports front, the NBA crossover event was—I wasn’t there, but my team has told me about how jam-packed the booth was and how long the lines were for Pop Yourself. We’re seeing that excitement for the personalization of Pop Yourself in conjunction with sports. And I can’t share any more today, but there are more leagues coming there, and we have a number of activations that we’re excited about on that front. So stay tuned for more there, but I would tell you I’m incredibly optimistic about our long-term future. Unfortunately, some of these things actually don’t take effect until the second half of the year. And so I can sound very excited about it and know that you’re going to see more of that impact in the back half. Yves, I’ll let you talk a bit about the assumptions that are built into the guidance.

Yves LePendeven: Sure. Hey, Stephen. Yeah. So as I mentioned, from China, which would be the ones that, you know, we’ve incorporated the 20% tariffs that would impact us. As we’ve mentioned before, we have roughly a third of our global product purchases coming from China. We’ve incorporated both the actual, you know, dollar amount from the tariffs as well as the impact that we’re seeing on the US consumer because, as Cynthia mentioned, in EMEA, we’re doing quite well. I would say that, you know, it’s obviously a very fluid situation. We’re seeing new headlines and announcements even as recently as a couple of hours ago about delays in the implementation of some of the tariffs. So to the best of our ability, we’ve kind of given the range.

Given what we know about the tariffs and what we see with the US consumer, obviously, upside and downside. You know, if there were, you know, exemptions, if there were delays, that would obviously help us if we see a rebounding of consumer sentiment as well. To the downside, obviously, further kind of, you know, tariff escalation would be to the downside. But we’re comfortable kind of navigating what we know of today. As I said, we have a number of mitigation strategies in place. And we’ve proven really over the last couple of years that we’re able to navigate complex challenges and be resilient. And that’s really thanks to the power of our brand and the support of our fans.

Stephen Laszczyk: That’s great. Thanks for that. And then maybe second, you know, Cynthia, Toy Fair this year, one of the things that certainly stood out to us was the focus on sports. I think we’ve seen some nice momentum over the last year from you guys on that. I think you mentioned in your prepared remarks that it’s only about 4% of revenue today. Just curious where you see the sports strategy going over the next, say, you know, three to five years. How big of a business could that be for you? And then maybe as a follow-up to that on the margin profile, the sports category, is there any way you can maybe size a margin profile of sports items for you and or maybe how that compares to the other licensed IP you have in the marketplace today?

Cynthia Williams: Yeah. Thanks for that. I’m glad you enjoyed the booth. What I tell you is we’re seeing a really positive reaction to the activations we’re doing both in our mainline product as well as some products like the NFL advent calendar, which was one of our top-selling products in Q4. So we’re seeing sports work across the product lines. As you saw at the Toy Fair, we’ve got some fun ways in Biddy City for you to create maybe your ideal soccer game or your ideal football game. And so I think that’ll be a lot of fun, and we’re looking forward to that. I’m very excited about some of the other sports activations that are already planned that you’ll hear us talking about later this year, and that’s regional capsules we mentioned.

We’ve identified four cities. The first one will be Seattle. That we can do a lot of testing and learning in our hometown. But you’ll see that be a celebration of all the professional sports in a given city so that you can have the fans be able to celebrate the legends, the current athletes, their love of the team. There’ll be some unique experiences along the way. So we’re really excited about that. And I really am looking forward to us doing more with other international teams and leagues. So I’d say the runway there is long. You know, the sports memorabilia market, I think I said in the prepared remarks, is like a $34 billion market segment, and we are just getting started. So I don’t have a percentage to share with you today on how big I think that can be, but you’ll see that really gaining momentum for us in the back half of the year and into 2026.

In terms of the margin profile, it will really—it’s more or less the same as the rest of the business. You know, in Pop Yourself, when we’re doing this, we’re paying our licensing fee just on the accessory, and so that still means that the Pop Yourself is a much higher margin than our mainline Pop products, but you should expect the margin profile on these to be really similar to the rest of our business.

Stephen Laszczyk: Great. Thank you.

Cynthia Williams: You’re welcome. Thanks for the question.

Operator: Thank you. The next question is from Linda Bolton Weiser with T.A. Davidson. Linda, your line is now open.

Linda Bolton Weiser: Yes. Hi. So I was curious. You mentioned that US retailers, I guess maybe you’ve said even mass retailers, just really didn’t order very much, I guess, in the fourth quarter. Can you give us a sense for how your POS is, you know, at mass and then more broadly, like because you serve a lot of specialty type retailers. So is your POS declining or is it flat or is it growing? And then what kind of a gap then was there between your sell-in and your sell-through in the US retail channel in the fourth quarter?

Cynthia Williams: Hi, Linda. Thanks for the question. You know, the good news is that our POS in the fourth quarter was growing. And I’m not going to split it by channel, but clearly, you know that our mass channels are sizable. None of them have more than 10% with Amazon being the largest at about 8%. But I’ll give you a sense of how the POS is going. If we use our internal measures, which is the wholesale customers who report to us, plus our direct-to-consumer, our POS in the fourth quarter was up 4% year-over-year. Now that’s global, so I’m going to split it for you a little bit. In the US, it was 1%. And it was double-digit, I think the number was 17%, in Europe and, you know, the rest of the world. So we were seeing this strength in Europe even as we closed out the year.

So our sell-in and sell-through in mass in the US, what I tell you is there wasn’t—it wasn’t that there was this massive gap so much as as they went into the end of the season, they were really working towards ending up with very healthy inventory levels, which they really have. You would, when you look at where they’re at, we’re not seeing the need for a lot of significant discounting from them either. Now if you were looking at Walmart’s numbers, you’d see it be a little bit up because of Biddy Pops. They have to carry a higher inventory level to keep the impulse single Biddy Pops in stock across the chain. But it’s, you know, it’s just a matter of we’re all ending with really healthy inventory. And now with the US consumer showing ability to tighten their wallet a little bit and having lower foot traffic in both Target and Walmart, you know, we’re seeing the softening of US consumer sentiment.

Linda Bolton Weiser: Okay. That’s very, very helpful. Thank you. And then so then when I look at your guidance, the first quarter kind of a bigger decline year-over-year in sales. So I guess that would be what exactly? Is fairly healthy and retailers have pretty lean inventory, like why is the decline getting so much bigger in the first quarter?

Cynthia Williams: I’d say it’s two things that I’ll highlight for you. The first one, you’ve probably heard some of our major retailers make public comments about their foot traffic and how it’s lower and been negatively impacted, and that we are seeing that impact their replenishments. So that’s item one. I’d say and we are seeing the US consumer being more cautious about their spending in our direct-to-consumer channel. I think you put out a report about this yesterday. So, you know, you’re seeing our credit card data. You were spot on about it. What we’re seeing is people are just being more cautious. We’re seeing slightly lower, you know, average order values when they are purchasing. We’re just a bit softer. But then again, I look at Europe, and it’s so strong with the double-digit POS sales, you know, in every major retailer.

So it really makes me feel like we are dealing with the macroeconomic environment that we’re going to have to navigate through, and so we’ll be doing that. I’ll tell you the second piece I was going to highlight for you that is also impacting that POS credit card data you spotted. As the tariffs have been announced, we’ve seen some disruption in the border crossings from Mexico into the United States as the Mexican government is trying to make sure that they are compliant with whatever the rules of the moment are about, you know, the tariffs. And our Pop Yourself is built in Mexico. And so we’ve seen delays in the trucks getting across to the extent that we have started having to turn expedited shipping on and off to protect the consumer experience on that, and it’s, you know, it’s a short-term thing, but it’s the right thing for the customer experience long-term and a product that’s as new as Pop Yourself is.

So that’s having a bit of an impact for us as well.

Linda Bolton Weiser: Okay. So on that topic then of Mexico and the tariffs, so, I mean, are you saying that you’re not—your Pop Yourself, which is only assembled in Mexico, your guidance doesn’t include the Mexico tariff on the Mexican products brought in, or is it the de minimis rule or what are you thinking there?

Cynthia Williams: Well, actually, this is what we have in the guidance. And so I just want to be clear that this is about the disruption at the border more than it’s the tariffs. So we bring the components for Pop Yourself over, which are made in China. So we’ve got within our guidance the tariff from China on the Pop Yourself components. Now when the product is compiled or made in Mexico, we don’t have an additional tariff on that as it comes back across the border. But the disruption at the border with the trucks being backed up and them trying to assess what they should let through and shouldn’t let through has impacted our delivery times to our customers and therefore how much we’re spending, you know, on marketing and whether or not we are allowing—well, when we pulse the marketing or not, and whether or not we have on the expedited shipping. With a giftable product, you know, it’s a problem when the gift is late.

Linda Bolton Weiser: Yeah. Okay. Okay. I got it. I’m in Mexico. So then again, with the tariffs and everything, does your guidance include any mitigating actions that you’re taking, like any potential price increases? Like, what are you thinking along those lines in terms of taking some pricing to offset?

Cynthia Williams: It does, actually. We are looking at all levers and all possibilities for that. When I was at New York Toy Fair, I was meeting with some of our vendors. We were talking about some of the cost-sharing. We were talking about some opportunities to shift more of our production. You know, we’ve been working on the diversity. And pricing adjustments are a lever for us, and so we don’t have anything to announce on that today, Linda, but it’s certainly incorporated into our guidance.

Linda Bolton Weiser: Okay. Sounds good. Okay. I’ll leave it there for now. Thank you very much.

Cynthia Williams: Thank you. We appreciate the questions. Thank you.

Operator: There are no further questions. I’ll hand the call back over to the management team for concluding remarks.

Cynthia Williams: Well, thank you everyone for joining us on the call today, and we look forward to sharing our progress with you on the next call. Thank you very much.

Operator: That concludes today’s conference call. Thank you for your participation. You may now disconnect your lines.