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Fox's bike-related sales up 3.1% in Q2

Published July 31, 2019
Sales of bike products increased 7.3% for the first six months.

BRASELTON, Ga. (BRAIN) — Fox Factory Holding Corp. reported that sales in its Specialty Sports Group — its bike-related business — were up 3.1% in the second quarter, which ended June 28. The Specialty Sports Group includes the Fox, Marzocchi, Easton cycling and RaceFace brands.

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Sales in the division totaled $76.9 million in Q2, up from $74.6 million in the same period last year. For the half, its sales were $141.8 million, up from $132.2 million in the first half last year — a 7.3% increase.

As has been typical in recent years, while Fox's bicycle division saw solid growth, the company's powered vehicle division growth was more explosive: in this case, the powered group saw growth of 40.1% in the quarter.

Across both divisions, Fox's sales were up 22.5% to $192.1 million compared to $156.8 million in the same quarter last fiscal year. For the first half, total sales were $353.8 million, an increase of 23.4% compared to the same period in 2018.

"Our broad-based growth continued in the second quarter as we benefited from solid execution across the business that fueled record sales and profitability above our expectations," said Mike Dennison, Fox's CEO. "Fox's diversified product offerings continued to resonate with our customers, demonstrating our commitment to product innovation and growth of our brands in both existing and new categories. We appreciate the outstanding efforts of our entire global team as we continue to deliver differentiated products to our passionate customer base, reinforcing the value of the Fox brand."

Fox's costs connected to its ongoing patent litigation with SRAM declined in the first quarter. While the company spent $2.6 million on litigation in the second quarter last year, this year it spent $1.1 million. In the first half, Fox spent $3.2 million this year, down from $3.8 million last year in the half. 

Adjusted EBITDA in the second quarter was $38.2 million, compared to $32.4 million in the second quarter of fiscal 2018. 

Fox said it expects sales in the range of $200-2008 million in the third quarter. For the fiscal year 2019, the company is raising its outlook and now expects sales in the range of $728-$743 million. Fox is sticking to its previous forecast for the bike division of sales growth in the mid-to-high single digit percentage range for the full year. The company said results from its recently announced decision to sell Fox products through QBP were included in its earlier forecasts and QBP sales are not considered additive. 

Topics associated with this article: Earnings/Financial Reports

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