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Fox Factory raises guidance after strong second quarter

Published August 3, 2016

SCOTTS VALLEY, Calif. (BRAIN) —  Fox Factory Holding Corp. saw sales increase 5.3 percent to $102.3 million in its second quarter, compared to $97.2 million in the same period last fiscal year. Gross margin increased 90 basis points to 31.6 percent over last year.

Fox operates the Fox Factory suspension brand, as well as Easton Cycling, RaceFace and Marzocchi mountain bike suspension.

"Our second quarter results were above our expectations and reflect the strength of our diversified product portfolio," said Larry L. Enterline, Fox's Chief Executive Officer. "Continued execution of our operational efficiency initiatives resulted in a gross margin improvement of 90 basis points which contributed to our profitability increase for the quarter. As a result of our year-to-date performance and our team's ability to deliver on key strategic objectives, we are able to raise our annual outlook for fiscal 2016."

The quarterly sales increase includes a 10.3 percent increase in sales of powered vehicle products and a 2.4 percent increase in sales of bike products. 

The improvement in gross margin was primarily due to manufacturing efficiencies and to a lesser degree favorable product and customer mix, the company said. Additionally, gross margin improved due to the non-recurrence of costs associated with the 2015 ramp up, reconfiguration and logistics of bike rear shock production in Taiwan and the subsequent reconfiguration of other facilities. 

Fox forecast third quarter sales in the range of $106 million to $112 million and non-GAAP adjusted earnings per diluted share in the range of $0.37 to $0.41.

For the full fiscal year 2016, the company raised its previous guidance and now expects sales in the range of $387 million to $402 million.

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