(BRAIN) — Sales in Fox Factory's Speciality Sports Group, comprised of its bicycle-related brands Fox, Marzocchi, RaceFace and Easton, were down 41% in the company's second quarter. The company said the decrease was "driven by higher levels of inventory across various channels."
SSG sales in the first half were down 35.6%. In an earnings call, company executives said they expected SSG sales to remain weak in Q3, with some recovery in the final quarter.
Company-wide Fox did better in the quarter and the half thanks to growth in its powered vehicle products revenue. In the second quarter, overall revenue was $400.7 million, a decrease of 1.5% compared to the second quarter of fiscal 2022. First-half sales company-wide were $800.6 million, an increase of 2.0% compared to the first six months in fiscal 2022.
During the quarter Fox realigned its Powered Vehicles Group into two business units: Powered Vehicles Group (“PVG”) and Aftermarket Applications Group (“AAG”).
Company-wide Fox's net income was $40 million and earnings per diluted share was $0.94. The company reaffirmed its full-year fiscal 2023 outlook at the low end of $1.67 billion to $1.70 billion of sales.
“Strong sales growth in PVG and AAG coupled with continued efficiency gains in our North American facilities enabled us to deliver on net sales and to exceed our expectations on adjusted EBITDA and adjusted EBITDA Margin,” said Mike Dennison, Fox's Chief Executive Officer. “Our solid cash flow generation and strong balance sheet place us in a position of strength heading into the second half of the year as we advance our organic growth strategy, address softness in SSG and continue to evaluate various acquisition targets that would be accretive to our brands and our financial performance.”
In Fox's first-quarter earnings call, Dennison mentioned that Fox was close to making a "small acquisition" in the bicycle industry. The second-quarter report did not mention an acquisition.
