Fox Factory Reports 4.8% Decline in Net Sales for Fiscal Year Ending January 3, 2025

Fox Factory Holding Corp. reported a decline in financial performance for the fiscal year ending January 3, 2025, with net sales of $1.39 billion, a decrease of 4.8% from $1.46 billion in the previous year. The company's gross profit also fell to $423.6 million, down from $464.8 million, resulting in a gross margin of 30.4%, compared to 31.7% in the prior year. This decline in revenue and profitability was attributed to a combination of factors, including a shift in product mix, chassis availability issues, and reduced consumer demand due to higher interest rates and elevated inventory levels at OEMs and dealerships.

Operating expenses increased significantly, rising by 20.1% to $365.9 million, primarily driven by higher general and administrative costs, sales and marketing expenses, and amortization of purchased intangibles, particularly following the acquisition of Marucci Sports in November 2023. The company’s income from operations decreased sharply to $57.7 million, a 64% drop from $160.1 million in the previous year. Interest expenses surged to $54.9 million, up from $19.3 million, reflecting increased debt levels and interest rates.

Fox Factory's operational metrics showed mixed results across its segments. The Powered Vehicles Group saw a revenue decline of 11.9%, while the Aftermarket Applications Group experienced a more significant drop of 23.5%. In contrast, the Specialty Sports Group reported a 31.3% increase in sales, largely due to the inclusion of Marucci's revenue. The company’s international sales accounted for 21% of total net sales, down from 23% the previous year, indicating a shift in geographic performance.

Looking ahead, Fox Factory aims to enhance its market position through strategic acquisitions and product innovation. The company has recently expanded its portfolio with the acquisition of Marucci Sports and Marzocchi Suspension, which are expected to contribute positively to future growth. However, the company also faces challenges, including ongoing geopolitical tensions, inflationary pressures, and the need to adapt to changing consumer preferences. Management remains focused on optimizing operations and expanding its aftermarket penetration while navigating these market conditions.