Funko Inc. FNKO, +0.78% stock plummeted 39% in Thursday premarket trading and shares were downgraded to neutral from buy at D.A. Davidson after the company's pre-announced holiday season sales fell 8%. The stock decline puts the pop culture company on track for a two-year low. Funko expects fourth-quarter sales of $214 million, down from $233 million last year. The FactSet consensus is for $231 million. The company said a "challenging retail environment" and weak sales related to some major movie releases were to blame. The company will also incur a one-time $16.8 million charge to write-down disposal of slow-moving inventory. Funko expects 2020 sales growth in the high-single digit to low-double digit range, though the first half is expected to be flat to down in the low-single digit range compared to 2019. Funko is scheduled to report fourth-quarter earnings on March 5. D.A. Davidson says it has "low confidence in the 'hockey stick' sales guidance." In addition to the downgrade, analysts also slashed their price target to $11 from $35. "Management was reluctant to talk about whether evergreen figure sales were up or down in 4Q19, a key data point in determining whether Pop! figures have staying power or are suffering from waning popularity," D.A. Davidson wrote. Funko stock is down 9.4% over the past year while the S&P 500 index SPX, -1.11% has gained 22% over the period.