• Total Net Sales: $352.8 million in Q4 2024, up 6.1% from $332.5 million in Q4 2023.
• Gross Margin: Increased to 28.9% in Q4 2024 from 27.7% in Q4 2023.
• Adjusted Gross Margin: Increased to 29.2% from the prior year quarter.
• Operating Expenses: $90.6 million, or 25.7% of net sales in Q4 2024, compared to $81 million, or 24.4% of net sales in Q4 2023.
• Net Loss: $0.1 million in Q4 2024, compared to net income of $4.1 million in Q4 2023.
• Adjusted Net Income: $12.8 million, or $0.31 per diluted share, compared to $20.3 million, or $0.48 per diluted share, in Q4 2023.
• Adjusted EBITDA: $40.4 million in Q4 2024, compared to $38.8 million in Q4 2023.
• Adjusted EBITDA Margin: 11.5% in Q4 2024, compared to 11.7% in Q4 2023.
• Debt Paydown: $63 million during Q4 2024.
• Full Year Net Sales: $1.39 billion for fiscal 2024, compared to $1.46 billion in fiscal 2023.
• Full Year Net Income: $6.6 million, or $0.16 per diluted share, for fiscal 2024, compared to $120.8 million, or $2.85 per diluted share, in fiscal 2023.
• Full Year Adjusted Net Income: $55.4 million, or $1.33 per diluted share, for fiscal 2024, compared to $167.5 million, or $3.95 per diluted share, in fiscal 2023.
• Full Year Adjusted EBITDA: $167 million for fiscal 2024, compared to $261 million in fiscal 2023.
• Working Capital Improvement: $55 million improvement driven by inventory optimization.

• Warning! GuruFocus has detected 8 Warning Signs with FOXF.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Fox Factory Holding Corp (NASDAQ:FOXF) delivered on financial commitments with sales and adjusted earnings per share in line with guidance.
• The company made significant progress in its $25 million cost reduction initiative, resulting in $63 million of debt paydown during the fourth quarter.
• Sequential adjusted EBITDA margin improvements were noted in both the Aftermarket Applications Group (AAG) and Powered Vehicle Group (PVG) by 250 and 310 basis points, respectively.
• Fox Factory Holding Corp (NASDAQ:FOXF) expanded its OEM customer base, adding new partnerships with BMW, Ducati, and Triumph for 2025.
• The company launched new products, including the AGwagon and a suspension package with Grand Design RV, showcasing innovation and expansion into new markets.

Negative Points

• Fox Factory Holding Corp (NASDAQ:FOXF) experienced uneven demand across OEM customers, impacting sales performance.
• The automotive sector faced headwinds from ongoing OEM production issues, with subdued growth in the premium truck category.
• The power sports sector continued to face challenges, with OEMs managing production levels to address dealer inventory and sell-through.
• Net sales in the Aftermarket Applications Group (AAG) were down compared to the prior year quarter, reflecting ongoing market pressures.
• The company reported a net loss in the fourth quarter of fiscal 2024, primarily driven by increased interest expenses.

Q & A Highlights

Q: Can you provide more details on the Taiwan facilities consolidation and its impact on capacity? A: Michael Dennison, CEO, explained that the capacity is in line with pre-COVID levels, with increased efficiency and lean operations. Future capacity expansion is likely to occur in Southeast Asia, such as Thailand or Vietnam, rather than Taiwan.

Q: What are the expectations for the upfitting business and dealership expansion in 2025? A: Dennis Schemm, CFO, noted that there is significant effort in cultivating strong relationships with dealers and diversifying across the U.S. The focus is on delivering the right products to customers and expanding the dealer network.

Q: Can you elaborate on the expected performance of the bike business in 2025? A: Michael Dennison, CEO, mentioned that while there could be upside, the company is being conservative due to past forecasting challenges. Positive signals have been seen in Q4 and Q1, with better inventory control and product diversification.

Q: How will the new MLB partnership with Marucci impact the business? A: Michael Dennison, CEO, indicated that the partnership will primarily impact Q2 and Q3, aligning with the MLB season. While it's too early to quantify the impact, both MLB and FOX/Marucci are optimistic about the potential growth.

Q: How are tariffs affecting the auto business, and what are the plans to mitigate these impacts? A: Michael Dennison, CEO, explained that while tariffs are a concern, the premium products FOX supplies are less affected. The company is working with OEMs like Ford, Stellantis, and Toyota, focusing on high-end products that are more resilient to tariff impacts.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.