Fox Factory Holding Corp Reports Strong Q2 2025 Earnings Amid Tariff Challenges

Fox Factory Holding Corp reported Q2 2025 net sales of $375 million, with growth across all three segments. The company achieved a consolidated adjusted EBITDA margin of 13.1%, its highest in nearly two years. However, tariffs have increased costs, impacting margins, and net income decreased to $2.7 million from $5.4 million in the same period last year.

Fox Factory Holding Corp (FOXF) reported strong financial performance for the second quarter of 2025, with net sales of $375 million, representing growth across all three segments. The company achieved a consolidated adjusted EBITDA margin of 13.1%, the highest in nearly two years. Despite these positive indicators, the company faced increased costs due to tariffs, which impacted margins and led to a decrease in net income to $2.7 million from $5.4 million in the same period last year.

The company's focus on research and development (R&D) and product innovation is positioning it for long-term market share gains. However, tariffs have posed a significant challenge, with an expected pre-mitigated tariff impact of up to $50 million for the full year. This has led to a narrowing of adjusted earnings per share guidance to the lower end of the original range.

The Aftermarket Applications Group experienced margin compression due to increased tariff rates on imported wheels and tires. The company is actively working on mitigation strategies, including supply chain optimization and relocating manufacturing processes to more favorable regions.

Fox Factory Holding Corp raised its full-year sales expectations due to strong performance in the first half of the year. The company's CEO, Mike Dennison, highlighted the company's focus on long-term value creation and the importance of product innovation in driving growth. The bike business experienced significant growth due to OEMs eliminating excess inventory and focusing on new product launches.

The company's Marucci business is expected to have a record year, with growth vectors including global expansion, diversification into new products, and entry into softball markets. The motorized two-wheel business has a margin profile consistent with the power sports business and has significantly offset the decline in power sports.

Fox Factory Holding Corp has raised its full-year sales guidance to $1,450-$1,510 million and narrowed its EPS guidance to $1.60-$2.00. The company anticipates $80 million in free cash flow for the year and aims to reduce net leverage to below 3x by year-end.

Despite the challenges posed by tariffs and the consumer discretionary environment, Fox Factory Holding Corp's strong revenue performance and strategic expansions into new markets have driven its success. The company's stock price experienced a 3.01% increase in aftermarket trading following the earnings release, reaching a last close value of $30.1.

References:
[1] https://finance.yahoo.com/news/fox-factory-holding-corp-foxf-030042743.html
[2] https://www.investing.com/news/transcripts/earnings-call-transcript-fox-factory-q2-2025-results-show-strong-revenue-growth-93CH-4179589