Fox Factory adds 34.4% revenue in Q1, raw materials stocked up

Fox Factory has continued to add significant gains to its revenues, posting a Q1 growth of 34.4%, worth $378 million, versus $281.1 million in the same period last year.

The results again represent record takings for the suspension giant, which recorded a 22.8% gross profit of $120.3 million despite a gross margin decrease of 300 basis points to 31.8%, versus 34.8% last year.

The takings were driven by the Speciality Sports Group for which cycling goods are represented; here the business added 43.5% in sales, The powered sports division added 27.9%.

“We are pleased to report record revenue and profitability in the first quarter of 2022. This accomplishment reflects the focus and continued execution of our people and FOX’s strategic initiatives while responding to various ongoing macro challenges,” commented Mike Dennison, FOX’s CEO. “Our immediate goal is the optimization of our Gainesville facility and while we saw improvements in productivity late in the quarter, we have significant work remaining to deliver our expected results. In addition, while inflation and supply chain challenges continue to pose obstacles, I am confident in our world-class team to continue to constructively drive the business toward our 2025 objectives.”

The company’s inventory sits higher than usual in respect of larger purchasing of raw materials in order to offset any supply chain turbulence.

Added to those costs, Fox Factory flagged increased employee costs, higher commissions, plus increased facilities costs. This meant that operating expenses were higher at $66.1 million in Q1 versus $52.1 million last year.

Forward guidance for the second quarter is placed in the range of $385 million to $405 million and non-GAAP adjusted earnings per diluted share in the range of $1.10 to $1.25. For the full year sales are expected in the range of $1,500 million to $1,530 million and non-GAAP adjusted earnings per diluted share in the range of $5.00 to $5.30.