Holley Inc. Reports Q1 2025 Financial Results with Decrease in Net Sales but Increase in Gross Profit

Holley Inc. reported its financial results for the first quarter of 2025, revealing a net sales figure of $153.0 million, a decrease of 3.5% from $158.6 million in the same period last year. The decline in sales was attributed to lower sales volume, which accounted for approximately $8.0 million of the decrease, partially offset by improved pricing that contributed approximately $2.4 million. The company's gross profit, however, increased by 23.1% to $64.1 million, driven by a reduction in the cost of goods sold, which fell by 16.5% to $89.0 million, largely due to a strategic product rationalization initiative that eliminated unprofitable stock keeping units (SKUs).

In terms of profitability, Holley reported an operating income of $19.3 million, an increase of 89.5% compared to $10.2 million in the prior year. This significant rise in operating income was supported by a decrease in total operating expenses, which rose to $44.7 million from $41.9 million, primarily due to increased selling, general, and administrative costs. The company’s net income for the quarter was $2.8 million, down from $3.7 million a year earlier, reflecting a 24.5% decline. The effective tax rate for the quarter was 27.6%, influenced by various factors including federal research and development tax credits.

Operationally, Holley has been focusing on strategic initiatives, including the acquisition of a perpetual license agreement with Cataclean Global Limited for $23.8 million, which is expected to enhance its product offerings in North America. The company also reported a slight increase in its employee headcount, reflecting ongoing investments in its workforce to support growth initiatives. As of March 30, 2025, Holley had cash and cash equivalents of $39.1 million, down from $56.1 million at the end of the previous fiscal year, and a total debt of $551.3 million.

Looking ahead, Holley remains cautious about the macroeconomic environment, which includes inflationary pressures and supply chain disruptions. The company is actively managing its inventory levels and has implemented cost-saving measures to mitigate these challenges. Holley’s management expressed optimism about its ability to navigate these conditions while continuing to pursue organic growth and potential acquisitions to expand its market presence. The company is committed to enhancing its operational efficiency and maintaining its competitive edge in the automotive aftermarket sector.