DULUTH, Ga. (BRAIN) — Fox Factory executives said all orders for its OE bike products are pre-booked for 2022 and they expect no letup in demand until next year or beyond.
Fox announced Thursday that its revenues last year hit $1.3 billion, a company record and a 45.9% increase over its 2020 sales.
On a call with investors, CEO Mike Dennison said bicycle factories will continue to demand Fox, Race Face, Marzocchi and Easton components well into the future.
“While you might see bikes starting to show up in dealer showrooms a little bit more frequently, and a little bit better selection, there is a whole system behind that, from distribution centers to hubs, regionally and internationally, that is still fundamentally empty,” he said. “So I think we’ve got several — multiple — months of demand just to deliver the pre-orders, and then you have 12 or 18 months of rebuilding inventory.”
And beyond that, he said Fox’s customers are confident that there will be “new, fresh demand” for bikes well after the inventory is rebuilt.
Dennison said Fox has not been a choke point in the supply chain. Rather, the company has to be careful not to overshoot factories’ ability to find the other parts needed to complete bikes.
“We're doing a great job keeping up with our OEMs and the demand signal. The thing we always have to balance is what everybody else is doing: because, as much as we can build, if everybody else can't keep up with us, bikes can't be built. So we always keep an eye on that and make sure we are not outstretching everybody else,” he said on the call.
Fox’s bicycle product category sales increased 57.8% last year, to $579 million, up from $367 million in 2020. Fox’s other division, Powered Vehicles, saw a sales increase of 37.5% last year, to $720 million.
Dennison said the raw material and component supply chain remains “a daily battle” for Fox. While Fox manufactures in Taiwan, the U.S., and Canada, it relies on parts from China.
“I do worry about things like brownouts in China manufacturing, where they are cutting energy back, so we have to keep an eye on that ... and we have to keep an eye on magnesium and magnesium supply. But so far the team has handled (the challenges) well. I don’t think the supply chain has got any easier and that will probably continue for the first half of next year from what I can see so far.”
$2B by 2025
Fox has set a goal of reaching $2 billion in annual sales by 2025. More immediately, it is forecasting full-year 2022 sales of $1,435 million to $1,465 million and non-GAAP adjusted earnings per diluted share in the range of $4.90 to $5.20.
Fox's shares are traded on NASDAQ under the FOXF symbol. Shares closed up 6.6% Thursday, at $124.66. The NASDAQ Composite Index closed up 3.34% Thursday.
