Should Tariff-Driven Margin Pressure and Lower Earnings Prompt Action From Fox Factory (FOXF) Investors?

• Fox Factory Holding Corp. recently reported second quarter 2025 results, with sales rising to US$374.86 million but net income falling sharply to US$2.74 million, alongside updated guidance that forecast third quarter sales of US$370 million to US$390 million and fiscal year 2025 sales of US$1.45 billion to US$1.51 billion, reflecting current tariff impacts.
• While top-line growth has continued, the considerable drop in net income and revised full-year outlook highlight ongoing margin pressures and the company’s sensitivity to global trade dynamics.
• We'll examine how the mix of higher sales and lower earnings in Fox Factory's update could reshape its future growth narrative.

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Fox Factory Holding Investment Narrative Recap

To be a long-term Fox Factory Holding shareholder, you need conviction in the company’s ability to capitalize on consumer demand for premium suspension and performance components, while successfully managing persistent margin pressures from tariffs and cost increases. The recent earnings and guidance update reinforces the dominant short-term catalyst, continued revenue growth from new product adoption, yet makes clear that the biggest risk remains compressing profitability tied to global trade factors. The latest results confirm these tensions are shaping near-term earnings outlooks, but do not fundamentally change their importance for investors.

The company’s latest corporate guidance, projecting third quarter sales of US$370 million to US$390 million and full-year sales of US$1.45 billion to US$1.51 billion, is particularly relevant. This outlook takes explicit account of ongoing tariff impacts, suggesting that tariff-driven cost pressures remain front and center as management calibrates financial expectations and operational plans.

Yet, just as headline growth gets attention, the ongoing challenge for Fox Factory shareholders remains the company’s vulnerability to external tariff shocks, something every investor should be aware of...

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

Fox Factory Holding's outlook forecasts $1.7 billion in revenue and $72.6 million in earnings by 2028. Achieving this requires 5.8% annual revenue growth and a $324.9 million increase in earnings from the current level of -$252.3 million.

Uncover how Fox Factory Holding's forecasts yield a $33.00 fair value, a 13% upside to its current price.

Exploring Other Perspectives

Four fair value estimates from the Simply Wall St Community span from US$15.70 to US$46.37, reflecting a broad spread in investor opinion. Margin pressure from tariffs remains a key concern that could shape how these differing perspectives play out for Fox Factory’s future, so consider exploring the full range of views to better understand the company’s potential.

Explore 4 other fair value estimates on Fox Factory Holding - why the stock might be worth as much as 58% 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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