FOX FACTORY HOLDING CORP Q3 FY2025 earnings call

• Key initiatives include footprint consolidation, portfolio optimization, working capital management, and a $25 million cost reduction program. - PVG is executing in-sourcing initiatives, reducing costs and offsetting tariff exposure, with new product launches in street performance and software-controlled live valve suspension. - AAG delayed footprint consolidation to prioritize growth initiatives, with successful partnerships and program launches. - SSG bike business faced industry challenges but new products performed well, and market share remained strong despite near-term constraints.

PVG delivered net sales of $125.9 million, a 15% year-over-year growth and 2% sequential growth. Automotive OE was stable but affected by a supply chain disruption from an aluminum supplier fire, impacting Q4. Powersports business is stabilizing. AAG had net sales of $117.8 million, up 17.4% year-over-year and 3.2% sequentially, driven by aftermarket components and upfitting growth, including a successful partnership with an OEM for a performance truck program. SSG had net sales of $132.7 million, down 11% year-over-year and 3% sequentially. Bike business faced industry challenges, but new products performed well. Marucci and Victus new launches were well-received, but consumer and distribution challenges persisted.

• Q4 2025: Net sales expected in the range of $340 million to $370 million, adjusted earnings per diluted share in the range of $0.05 to $0.25. - FY 2025: Net sales guidance updated to $1.445 billion to $1.475 billion, adjusted earnings per diluted share guidance to $0.92 to $1.12. The $25 million cost reduction program remains on track for full fiscal year delivery.

• Macro consumer challenges affecting SSG and Marucci, with distribution channels being sensitive to inventory positions. - Supply chain issues from an aluminum supplier fire impacting PVG's Q4 and likely Q1 sales. - Labor issues and import bans affecting SSG bike business, creating headwinds for the segment.

Q: SSG on the bike side, can you quantify the year-over-year revenue progression and outlook for leaner inventory positioning?

A: Mike Dennison mentioned bike revenue had more weight in the first half due to new product launches, with Q4 being a retail story as dealers manage leaner inventories.

Q: On PVG, can you quantify the impact of the aluminum supplier fire on Q4 sales?

A: Michael Dennison stated the fire is a significant issue across Q4, impacting both PVG automotive OE and AAG chassis, with resolution expected mid-Q1.

Q: Regarding 2026 macro challenges and new product development, what's the focus?

A: Michael Dennison emphasized focus on profitability and delivering product launches to resonate with enthusiasts, with optimization to achieve profitability regardless of top line in 2026.

Q: Labor issues and import ban on Giant affecting SSG?

A: Michael Dennison said labor issues are a headwind, not insignificant in Q4, but the bike business remaining healthy relative to product is key.