Financial Data and Key Metrics Changes - First quarter sales reached $355 million, reflecting a 6.5% increase year-over-year, with adjusted earnings per share at $0.23, aligning with expectations [6][21] - Gross margin improved sequentially by 200 basis points to 30.9%, while adjusted gross margin decreased to 30.9% from 32.3% year-over-year due to a shift in product mix [6][22] - Net loss for the quarter was $259.7 million, or negative $6.23 per diluted share, primarily due to a goodwill impairment charge of $262 million [23] Business Line Data and Key Metrics Changes - In the Powered Vehicles Group (PVG), net sales increased by 3.4% to $122.1 million, driven by motorcycle business growth, with adjusted EBITDA margin improving to 11.8% [11][12] - The Aftermarket Applications Group (AAG) saw net sales rise by 9.9% to $111.9 million, with adjusted EBITDA margin increasing to 15.2% [13][14] - Specialty Sports Group (SSG) reported a 6.6% increase in net sales to $121 million, although adjusted EBITDA margin decreased to 19.3% due to seasonality and investments in product engineering [15][16] Market Data and Key Metrics Changes - The automotive sector is showing signs of stabilization, particularly in the premium truck category, despite broader market caution [12] - The company is experiencing uneven market conditions across various product lines, but is managing financial commitments through disciplined execution [7][19] Company Strategy and Development Direction - The company is focused on cost optimization, portfolio optimization, and working capital management to enhance operational efficiency and free cash flow generation [8][10] - Strategic initiatives include simplifying and consolidating manufacturing footprint, optimizing product mix, and implementing a $25 million cost reduction program [9][10] - The company remains committed to innovation and new product development, which is essential for customer engagement and long-term growth [7][8] Management's Comments on Operating Environment and Future Outlook - Management acknowledges ongoing challenges from tariffs and market volatility but remains optimistic about sequential improvements and long-term growth potential [19][20] - The company reaffirms its full-year 2025 guidance, expecting top and bottom line improvements despite market headwinds [25][29] - Management emphasizes the importance of operational efficiency and strategic growth initiatives to drive long-term shareholder value [19][29] Other Important Information - The company has quantified the potential gross impact of tariffs to be around $50 million for the year, representing approximately 5% of the cost of goods sold [28] - Inventory levels increased by 1% compared to the previous fiscal year, driven by strategic stocking in aftermarket businesses [24] Q&A Session Summary Question: Update on demand from bicycle OEM partners regarding tariffs - Management noted a spectrum of responses from OEM customers, with no significant reduction in demand observed due to tariffs [34][36] Question: Key drivers of growth in the upfitting business - Growth is attributed to better product execution, improved dealer relationships, and a favorable product mix [38][39] Question: Quality of inventory and potential for cash generation - Management emphasized a strategic focus on inventory builds to support demand, particularly in aftermarket businesses [40][41] Question: Updates on international opportunities and product development - The company is expanding relationships internationally, particularly in the wheel and bike segments, to diversify geographically [50][51] Question: Impact of tariffs on supply chain and manufacturing - Management discussed various strategies to mitigate tariff impacts, including insourcing and adjusting pricing with OEMs [60][62] Question: Observations on consumer demand and potential pull-forward in sales - Management did not observe significant pull-forward in demand but noted some early product launches may have influenced Q1 sales [67][68] Question: Seasonality of Marucci products and impact of MLB partnership - Management clarified that seasonality is influenced by product launches and not solely by the baseball season [82][86]

Financial Performance - Net sales for the first quarter of fiscal 2025 were $355 million, an increase of $22 million or 6.5% compared to the prior year[4] - Adjusted earnings per diluted share improved to $0.23, compared to $0.29 in the prior year period[9] - Adjusted EBITDA in the first quarter of fiscal 2025 was $39.6 million, with an adjusted EBITDA margin of 11.2%[10] - Gross margin was 30.9%, sequentially up 200 basis points from the previous quarter[4] - Net loss attributable to FOX stockholders was $259.7 million, compared to a net loss of $3.5 million in the prior year[9] - Net sales for the three months ended April 4, 2025, increased to $355.03 million, up from $333.47 million in the same period last year, representing a growth of 6.7%[26] - The company reported a net loss of $259.73 million for the three months ended April 4, 2025, compared to a net loss of $3.50 million for the same period in 2024, indicating a significant decline in profitability[26] - Adjusted EBITDA for the three months ended April 4, 2025, was $39.60 million, slightly down from $40.42 million in the prior year, reflecting a decrease in adjusted EBITDA margin from 12.1% to 11.2%[34] - Gross profit for the three months ended April 4, 2025, was $109,679,000, compared to $103,158,000 for the same period in 2024, reflecting a year-over-year increase of 6.5%[38] - Adjusted gross profit for the three months ended April 4, 2025, was $109,843,000, up from $107,643,000 in the prior year, indicating a growth of 2.0%[38] Costs and Expenses - The company estimates an annual potential impact of tariffs to be around $50 million in higher costs[14] - Research and development expenses increased to $17.04 million for the three months ended April 4, 2025, compared to $14.44 million in the same period last year, an increase of 18.0%[26] - Operating expenses for the three months ended April 4, 2025, totaled $360,266,000, significantly higher than $94,283,000 for the same period in 2024, primarily due to goodwill impairment of $262,129,000[40] - Adjusted operating expense for the three months ended April 4, 2025, was $84,415,000, compared to $80,299,000 in the previous year, showing an increase of 3.4%[40] - The operating expense margin for the three months ended April 4, 2025, was 101.5%, compared to 28.3% for the same period in 2024, indicating a substantial increase due to the goodwill impairment[40] - The adjusted operating expense margin for the three months ended April 4, 2025, was 23.8%, slightly down from 24.1% in the prior year[40] - Acquisition-related costs and expenses for the three months ended April 4, 2025, were $203,000, down from $678,000 in the same period in 2024[35] Cash Flow and Debt - Total debt as of April 4, 2025, was $709.9 million, up from $705.1 million as of January 3, 2025[12] - Cash and cash equivalents decreased to $68.6 million from $71.7 million as of January 3, 2025[12] - Cash and cash equivalents at the end of the period were $68.60 million, down from $71.67 million at the beginning of the period, a decrease of 4.4%[28] - The company experienced a net cash provided by operating activities of $0.68 million, a significant decrease from $9.35 million in the prior year[28] - Total current assets decreased to $714.10 million as of April 4, 2025, from $727.68 million as of January 3, 2025, a decline of 1.5%[24] - Total liabilities decreased to $998.67 million as of April 4, 2025, compared to $1,031.17 million as of January 3, 2025, a reduction of 3.1%[24] Future Outlook - For the second quarter of fiscal 2025, the company expects net sales in the range of $340 million to $360 million[13] - The company anticipates future growth prospects and improved operating efficiencies, although various risks may impact these expectations[42] - The company is focused on developing new and innovative products and expanding into new categories and end-markets[42] - The company is implementing cost reduction initiatives to improve margins throughout the year[3]

Core Viewpoint - Fox Factory Holding Corp. reported financial results for the first fiscal quarter of 2025, showing a 6.5% increase in net sales compared to the previous year, despite facing challenges from high interest rates and tariffs [1][4][9]. Financial Performance - Net sales for Q1 2025 were $355.0 million, up from $333.5 million in Q1 2024, driven by increases in all segments: AAG up 9.9%, SSG up 6.6%, and PVG up 3.4% [4][7]. - Gross margin remained stable at 30.9%, while adjusted gross margin decreased by 140 basis points to 30.9% [5][40]. - Total operating expenses surged to $360.3 million, or 101.5% of net sales, primarily due to a goodwill impairment charge of $262.1 million [6][9]. - The company reported a net loss of $259.7 million, translating to a loss per diluted share of $6.23, compared to a loss of $3.5 million or $0.08 per share in the prior year [9][27]. Segment Performance - The Aftermarket Applications Group (AAG) saw net sales increase from $101.9 million to $111.9 million, attributed to higher upfitting sales and demand for aftermarket products [4][35]. - Specialty Sports Group (SSG) net sales rose from $113.5 million to $121.0 million, driven by growth in bike sales, although inventory recalibration and consumer demand posed challenges [4][35]. - Powered Vehicles Group (PVG) net sales increased from $118.1 million to $122.1 million, mainly due to the expansion of the motorcycle business [4][35]. Operational Insights - Adjusted EBITDA for Q1 2025 was $39.6 million, down from $40.4 million in Q1 2024, with an adjusted EBITDA margin of 11.2% compared to 12.1% in the prior year [10][33]. - The company is implementing operational improvements and strategic cost management initiatives to enhance margins throughout the year [3][6]. Guidance and Outlook - For Q2 2025, the company expects net sales between $340 million and $360 million, with adjusted earnings per diluted share projected between $0.32 and $0.62 [12]. - For the full fiscal year 2025, net sales are anticipated to range from $1.385 billion to $1.485 billion, with adjusted earnings per diluted share expected between $1.60 and $2.60 [12]. Balance Sheet Summary - As of April 4, 2025, cash and cash equivalents were $68.6 million, down from $71.7 million at the beginning of the year, while total debt increased to $709.9 million [11][24]. - Goodwill decreased significantly to $377.2 million due to a non-cash impairment charge related to adverse changes in U.S. tariff policies [11][24].

Core Viewpoint - Fox Factory (NASDAQ: FOXF) is positioned as a strong investment opportunity, particularly in anticipation of a recovery in discretionary spending and the commitment of enthusiasts to their sports and hobbies [1] Group 1: Investment Thesis - The company is recognized for its strong premium brands, which are appealing to consumers [1] - The focus is on identifying companies that offer healthy dividends while waiting for capital appreciation [1] - The shares of Fox Factory are considered temporarily undervalued compared to its fundamentals, peers, and historical levels [1] Group 2: Investment Criteria - High odds for capital appreciation are preferred, ideally driven by foreseeable catalysts [1] - The investment strategy emphasizes companies that reward shareholders in two ways: through dividends and capital appreciation [1] - The analyst has a background in the HVAC industry, which influences the focus on related stocks [1]

Core Viewpoint - Fox Factory Holding Corp. will announce its first-quarter results for the period ending April 4, 2025, on May 8, 2025, after market close [1] Group 1: Company Overview - Fox Factory Holding Corp. is a global leader in designing, engineering, and manufacturing premium products for specialty sports and vehicles [3] - The company’s portfolio includes brands like FOX, Marucci, and Method Race Wheels, known for their innovative products that cater to professional athletes and enthusiasts [3] - Fox Factory produces shocks, suspension, and components for powered vehicle and bicycle manufacturers, as well as premium baseball and softball gear [3] - The company diversifies its offerings by acquiring complementary businesses to enhance its engineering and manufacturing capabilities [3] Group 2: Conference Call Details - A conference call will be held on May 8, 2025, at 4:30 p.m. ET to discuss the quarterly results [2] - The call will be available live on the company's website and archived for one year [2] - North American listeners can dial (800) 343-5172, while international listeners can call (203) 518-9856, using conference ID FOXFQ125 or 36937125 [2]

Company Overview - Fox Factory Holding (FOXF) shares increased by 19.6% to $21.97 in the last trading session, following a period of 25.8% loss over the past four weeks, indicating a significant rebound in stock performance [1][2] Market Context - The surge in Fox Factory's stock is attributed to a broader market rebound after the Trump administration announced a temporary halt on reciprocal tariffs for most countries, which alleviated fears of a recession due to potential tariff increases [2] Earnings Expectations - Fox Factory is expected to report quarterly earnings of $0.22 per share, reflecting a year-over-year decline of 24.1%. Revenue is projected to be $328.55 million, down 1.5% from the same quarter last year [3] - The consensus EPS estimate for Fox Factory has remained unchanged over the last 30 days, suggesting that stock price movements may not sustain without trends in earnings estimate revisions [4] Industry Comparison - Fox Factory Holding is part of the Zacks Automotive - Domestic industry, where Lucid Group (LCID) also operates. Lucid Group's stock closed 9.9% higher at $2.55, with an 11% return over the past month [4] - Lucid Group's consensus EPS estimate has increased by 10.7% over the past month to -$0.22, representing a 26.7% change from the previous year [5]

Core Viewpoint - Fox Factory Holding (FOXF) shares have increased by 1.5% recently, closing at $27.73, with a potential upside of 35.5% based on Wall Street analysts' mean price target of $37.57 [1] Price Targets and Analyst Estimates - The mean estimate consists of seven short-term price targets with a standard deviation of $5.09, indicating variability among analysts [2] - The lowest price target is $30, suggesting an 8.2% increase, while the highest target is $45, indicating a potential surge of 62.3% [2] - A low standard deviation signifies strong agreement among analysts regarding the stock's price movement direction [7] Earnings Estimates and Analyst Agreement - Analysts have shown increasing optimism about FOXF's earnings prospects, with a positive trend in earnings estimate revisions [9] - Over the past 30 days, one estimate has increased, leading to a 6.4% rise in the Zacks Consensus Estimate [10] - FOXF holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [11] Conclusion on Price Targets - While consensus price targets may not reliably indicate the extent of potential gains, they can provide a directional guide for price movement [12]

Core Viewpoint - The article emphasizes the importance of value investing and highlights Fox Factory Holdings (FOXF) as a strong value stock based on its financial metrics and rankings [2][3][6] Company Analysis - Fox Factory Holdings (FOXF) currently has a Zacks Rank of 2 (Buy) and a Value grade of A, indicating strong potential for value investors [3] - FOXF has a PEG ratio of 1.33, significantly lower than the industry average of 2.69, suggesting it may be undervalued relative to its expected earnings growth [4] - The stock's PEG has fluctuated between a high of 4.07 and a low of 1.32 over the past year, with a median of 1.72 [4] - FOXF's P/CF ratio stands at 10.86, which is favorable compared to the industry's average P/CF of 21.40, indicating a solid cash flow outlook [5] - Over the past 12 months, FOXF's P/CF has ranged from a high of 18.16 to a low of 10.23, with a median of 12.73 [5] - These financial metrics collectively suggest that FOXF is likely undervalued at the moment, supported by a strong earnings outlook [6]

Company Overview - Fox Factory Holding Corp. conducted its Fourth Quarter and Full Year Fiscal 2024 Earnings Conference Call on February 27, 2025 [1][2] - The call featured key participants including the Chief Legal Officer, Chief Executive Officer, and Chief Financial Officer [1][3] Earnings Presentation - The earnings release was made available prior to the call, accessible on the investor relations section of the company's website [4] - The conference included a structured format with business updates from the CEO followed by a review of quarterly results and outlook from the CFO [3]

Financial Data and Key Metrics Changes - Total consolidated net sales in Q4 2024 were $352.8 million, an increase of 6.1% compared to $332.5 million in the same quarter last year [41] - Gross margin increased by 120 basis points to 28.9% in Q4 2024, compared to 27.7% in the same quarter last year [42] - Net loss in Q4 2024 was $0.1 million, or zero per diluted share, compared to net income of $4.1 million, or $0.10 per diluted share, in the same quarter last year [44] - Adjusted EBITDA increased to $40.4 million for Q4 2024, compared to $38.8 million in the same quarter last year [45] Business Line Data and Key Metrics Changes - In the Powered Vehicle Group (PVG), net sales were $116 million, slightly down from $118 million in the prior year quarter, but up 5% sequentially [16] - In the Aftermarket Applications Group (AAG), net sales were $112 million, down from $121 million in the prior year quarter, but up 11% sequentially [22] - In the Sports Segment Group (SSG), net sales were $125 million compared to $93 million last year, reflecting a 41.5% increase from a full quarter of Marucci [29] Market Data and Key Metrics Changes - The automotive sector continues to face headwinds from ongoing OEM production issues, with expectations for flat-to-down, low single-digit retail sales in 2025 [19] - The bike business is experiencing varied recovery rates across different geographies, channels, and customers, with a cautious outlook for 2025 [30] - The European market showed strength in early 2024, but purchasing habits weakened in Q4 due to inventory concerns [32] Company Strategy and Development Direction - The company is focused on operational excellence and strategic positioning across segments, with a comprehensive cost reduction program aimed at improving margins [56] - The company is diversifying across segments, products, markets, and geographies, with a focus on product development initiatives to create new customer engagements [15] - The company aims to restore best-in-class EBITDA margins as market conditions normalize while driving higher rates of free cash flow [16] Management's Comments on Operating Environment and Future Outlook - Management expects continued market pressures in 2025 but remains committed to operational efficiency and cost management to protect margins [21] - The company anticipates net sales for fiscal year 2025 in the range of $1.385 billion to $1.485 billion, with adjusted earnings per diluted share between $1.60 and $2.60 [52] - Management acknowledges the complexity of the regulatory environment, including tariffs, and is actively analyzing potential impacts [37] Other Important Information - The company has identified $25 million in savings across COGS and SG&A as part of its cost optimization plan [13] - The company is expanding its product portfolio, including the launch of the AGwagon, designed for agricultural use [26] - The company is working on several new products expected to launch in 2025, which are anticipated to revolutionize the suspension and bike market [32] Q&A Session Summary Question: Update on Taiwan facilities consolidation and capacity - Capacity is in line with pre-COVID levels, with increased efficiency within the same footprint, and future growth may occur outside Taiwan [62] Question: Update on the upfitting business and dealership dialogue - Strong relationships are being cultivated with dealers, and efforts are being made to reposition inventory effectively [66] Question: Insights on the bike business and revenue expectations - The company is being conservative in its outlook for the bike business, with potential upside but cautious due to previous forecasting challenges [72] Question: Impact of the new MLB partnership on Marucci - Growth is expected to ramp up in Q2 and Q3, with positive signs but no specific numbers provided yet [76] Question: Conversations with OEM partners regarding tariffs - The company feels relatively insulated from tariff impacts due to its focus on premium products and strong relationships with OEMs [84]