Core Insights - Holley Performance Brands has rebranded its consumer vertical from "Domestic Muscle" to "American Performance," reflecting a generational shift in automotive enthusiasm and sustained growth in American vehicle platforms from the 1980s to 2000s [1][5] Market Trends - The previous "Domestic Muscle" segment was perceived as a legacy category, primarily focused on older muscle cars from the 1960s and 1970s, which were plateauing in demand [2] - Holley's research indicates that demand is expanding due to younger enthusiasts entering their peak spending years, engaging with vehicles they grew up with [2][5] Segment Definition - The American Performance segment includes trucks, SUVs, and cars that are 20 years or older, as well as modern American performance vehicles like Mustangs, Corvettes, and Challengers [3] Research Findings - Platforms from 1980 to 2009 account for over 78% of Holley's event participation and 81% of segment sales, indicating strong demand beyond traditional muscle cars [6] - Trucks represent 80% of the top vehicle searches on Holley.com, highlighting their dominance in search and sales activity [6] - Over 70% of attendees at Holley's LS Fest are under 45 years old, engaging with 1980s to 1990s platforms, showcasing a younger and more diverse buyer demographic [6] Cultural Influence - Pop culture is driving renewed interest in vehicles, with media moments and nostalgia contributing to rising values for models like the Buick Grand National and Fox Body Mustang [6] Market Potential - The American Performance segment represents a market exceeding $5 billion and contributes approximately 60% of Holley Performance Brands' annual revenue [9]

Summary of Holley (HLLY) FY Conference Call - June 04, 2025 Company Overview - Holley specializes in automotive aftermarket products, enhancing vehicle performance and enjoyment for car enthusiasts [2][3] - The company has a history of over 120 years, focusing on iconic brands in the automotive sector [6][27] Market Insights - The automotive enthusiast market in the U.S. comprises approximately 70 million individuals, surpassing other hobbies like golf and fishing [5] - The market for trucks, SUVs, and CUVs is valued at $26 billion, representing 80% of new vehicle sales in the U.S. [10] - Holley operates in four main verticals: domestic muscle cars, trucks/SUVs, import vehicles, and safety/racing [10][11] Financial Performance - In Q1, Holley reported a 3.3% year-over-year growth in core business, marking the first growth in five quarters [12][13] - Direct-to-consumer sales grew over 10%, while third-party marketplace sales increased by 50% [15] - The company achieved $8.1 million in product innovation and strategic pricing during the quarter [15] - Free cash flow was negatively impacted by timing issues, with expectations of recovery in Q2 [17] Operational Efficiency - Holley has cut operational inefficiencies by over $30 million in the past two and a half years, with a target of an additional $5-10 million this year [29][30] - The company reduced its SKU count by 45%, improving inventory management [32] - Past dues were reduced by 20%, and the company is focused on freeing up cash by eliminating unproductive inventory [18] Strategic Initiatives - Holley aims to enhance the consumer experience and improve its direct-to-consumer model, which has grown from 15% to 20-25% of sales [42] - The company is exploring transformational M&A opportunities to further strengthen its market position [23] - Holley is expanding into new markets, including Mexico, and is looking to enter additional international markets [22] Challenges and Risks - The automotive aftermarket industry has faced softness over the past three years, with market conditions being challenging [20] - Tariff impacts remain a concern, but Holley has managed to mitigate some effects through supplier consolidation and moderate pricing actions [49][50] Consumer Engagement - Holley has a strong social media presence with 8 million followers and hosts events that attract over 50,000 attendees [38][40] - The company emphasizes the importance of brand recognition and consumer loyalty in the automotive aftermarket [42] Future Outlook - Holley maintains a guidance of approximately $120 million in EBITDA for the year, with expectations of generating $40-50 million in free cash flow [36] - The company is focused on deleveraging and improving its balance sheet through strategic financial management [36][37] Conclusion - Holley is positioned for growth in the automotive aftermarket, leveraging its strong brand portfolio and operational improvements while navigating market challenges and consumer trends [37][42]