Did Rising Sales But Lower Profits Just Shift Fox Factory Holding's (FOXF) Investment Narrative?

• Fox Factory Holding Corp. recently announced its second quarter 2025 earnings, reporting sales of US$374.86 million but a sharp decline in net income to US$2.74 million compared to a year ago.
• The company also updated its sales guidance for the third quarter and full fiscal year 2025, taking into account both year-to-date results and ongoing tariff impacts.
• We'll examine how the company’s lower profitability despite higher sales affects Fox Factory Holding's near-term investment narrative and outlook.

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Fox Factory Holding Investment Narrative Recap

To back Fox Factory Holding as a shareholder, you need to believe in its ability to convert innovation in specialty suspension and performance products into long-term profit growth, even when short-term results show increasing sales but much lower earnings. This recent earnings report, while not materially changing the biggest short-term catalyst (cost reduction measures), puts a spotlight on the key near-term risk: continued margin pressure from factors like tariffs, which remain a meaningful headwind.

The company’s updated fiscal year 2025 sales guidance, now in the US$1.45 billion to US$1.51 billion range, stands out, as it balances progress in top-line growth against ongoing impacts from tariffs and sector volatility. This revision directly addresses concerns about predictability and pricing challenges, reinforcing why margin recovery remains central to the near-term story.

Yet, before considering the upside of new growth initiatives, it's important to keep in mind the risk that persistent cost pressures, especially from tariffs, could still limit...

Read the full narrative on Fox Factory Holding (it's free!)

Fox Factory Holding's outlook projects $1.6 billion in revenue and $85.8 million in earnings by 2028. This is based on a 4.4% annual revenue growth rate and a $335.4 million increase in earnings from the current -$249.6 million.

Uncover how Fox Factory Holding's forecasts yield a $30.00 fair value, in line with its current price.

Exploring Other Perspectives

Four members of the Simply Wall St Community estimate Fox Factory’s fair value between US$15.70 and US$35.00. While several see cost controls as a future positive, margin pressure from tariffs signals the importance of weighing earnings resilience in your outlook.

Explore 4 other fair value estimates on Fox Factory Holding - why the stock might be worth as much as 16% more than the current price!

Build Your Own Fox Factory Holding Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Fox Factory Holding research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.
• Our free Fox Factory Holding research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Fox Factory Holding's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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