Fox Factory shares unravel on downbeat profit outlook

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The fire at the Novelis aluminum plant and softening trends in its high margin Specialty Sports Group (SSG) were reflected in Fox Factory’s (FOXF [https://seekingalpha.com/symbol/FOXF]) third quarter results [https://seekingalpha.com/news/4517923-fox-factory-non-gaap-eps-of-0_23-misses-by-0_32-revenue-of-376_4m-misses-by-6_19m] and lowered guidance, leading to a 25% drop in shares at Friday’s open to a 9-year low.

Although net sales were up 5% during the quarter -- albeit $6.2M shore of expectations -- the company swung to a loss of $662,000, compared to net income of $4.8M a year earlier. On an adjusted basis, the company earned $0.23 per share, down from $0.35 a year ago and $0.32 cents worse than expected. The company’s profits were adversely affected by accelerated investments in R&D, and sales and marketing to support new launches and product innovation, as well as restructuring costs.

The increase in sales was driven by a 17.4% increase in aftermarket applications, 15.1% increase in powered vehicles, both of which were partially offset by a 11.2% drop in SSG sales as OEMs, distributors, and dealers reduce inventory levels in response to market-wide economic conditions.

For the current quarter, Fox Factory (FOXF [https://seekingalpha.com/symbol/FOXF]) expects net sales to be between $340M to $370M and adjusted earnings between $0.05 and $0.25 per share, versus estimates of $365.1M and $0.53 per share, respectively.

For FY25, net sales are now expected to be between $1.445B to $1.475B from earlier guidance of $1.45B to $1.51B, with the midpoint of the new range below the consensus estimate of $.147B.

Adjusted earnings are now seen between $0.92 and $1.12 per share from $1.60 to $2.00 per share previously, with the new range well below estimates of $1.70.

MORE ON FOX FACTORY

* Fox Factory Holding Corp. (FOXF) Q3 2025 Earnings Call Transcript [https://seekingalpha.com/article/4839891-fox-factory-holding-corp-foxf-q3-2025-earnings-call-transcript]
* Fox Factory: Despite The Dip, This Prospect Offers Upside [https://seekingalpha.com/article/4828845-fox-factory-despite-the-dip-this-prospect-offers-upside]
* Fox Factory: Waiting For The Real Rebound [https://seekingalpha.com/article/4828474-fox-factory-waiting-for-the-real-rebound]
* Fox Factory updates Q4 2025 outlook with net sales guidance of $340M–$370M amid ongoing macro headwinds [https://seekingalpha.com/news/4518177-fox-factory-updates-q4-2025-outlook-with-net-sales-guidance-of-340m-370m-amid-ongoing-macro]
* Seeking Alpha’s Quant Rating on Fox Factory [https://seekingalpha.com/symbol/FOXF/ratings/quant-ratings]