Fox Factory Reports 50% Decrease in Net Income Amid $257 Million Loss in First Half of Fiscal 2025

Fox Factory Holding Corp. reported its financial results for the second quarter of fiscal 2025, revealing a net income of $2.7 million, a decrease of 50% from $5.4 million in the same period last year. For the six months ending July 4, 2025, the company experienced a significant net loss of $257 million, compared to a net income of $1.9 million for the same period in 2024. The decline in profitability was primarily attributed to a non-cash goodwill impairment charge of $262.1 million, which was recognized due to adverse changes in U.S. tariff policies and a sustained decline in the company's stock price.

Total net sales for the second quarter increased by 7.6% to $374.9 million, up from $348.5 million in the prior year. The growth was driven by stabilization in bike sales, increased demand for aftermarket products, and expansion in the motorcycle business, which offset lower demand in the automotive original equipment (OE) product lines. For the first half of the fiscal year, net sales rose 7% to $729.9 million, compared to $682 million in the previous year. However, the cost of sales also increased, rising 8.6% to $257.9 million for the quarter, leading to a slight decrease in gross margin to 31.2%.

In terms of operational developments, Fox Factory's three segments—Powered Vehicles Group, Aftermarket Applications Group, and Specialty Sports Group—each reported growth in net sales. The Powered Vehicles Group saw a 4.9% increase to $123.5 million, while the Aftermarket Applications Group and Specialty Sports Group reported increases of 6.6% and 11.0%, respectively. The company also noted a decrease in unallocated corporate expenses, which fell by 10.6% due to cost containment measures.

Fox Factory's balance sheet as of July 4, 2025, showed total assets of $1.965 billion, down from $2.232 billion at the beginning of the fiscal year. The company maintained a cash position of $81.5 million, an increase from $71.7 million at the start of the year. The company’s total liabilities decreased slightly to $1.006 billion, with a current portion of long-term debt remaining stable at $24.3 million. The company continues to comply with its debt covenants under its 2022 Credit Facility, which provides for up to $650 million in borrowing capacity.

Looking ahead, Fox Factory anticipates that cash on hand, cash flows from operations, and availability under its credit facility will be sufficient to fund operations over the next 12 months. However, the company remains cautious about macroeconomic conditions, including high interest rates and inflation, which could impact consumer demand and overall business performance. The company is also evaluating the potential effects of recent global trade actions and tariffs on its supply chain and cost structure.