Key Points

The bike suspension specialist beat estimates on the top line. It took a $262 million goodwill impairment related to tariffs. Fox Factory is on track for margin expansion over the next two years. 10 stocks we like better than Fox Factory ›

Shares of Fox Factory (NASDAQ: FOXF) were moving higher today after the maker of performance suspension components like shocks for bicycles and powered vehicles delivered strong results in its first-quarter earnings report.

As of 12:51 p.m. ET, the stock was up 11.3% on the news.Image source: Getty Images.

Fox Factory is on the move

The manufacturer said that revenue in the quarter was up 6.5% to $355 million, which was much better than the consensus at $330.7 million.

Revenue increased in all three of its segments, with after-market applications group (AAG) sales up 9.9%, specialty sports group up 6.6%, and powered vehicles group up 3.4%.

Gross margin was flat at 30.9%, and adjusted earnings per share fell from $0.29 to $0.23, due in part to tax adjustments related to a goodwill impairment of $262 million, though investors seemed to ignore that charge, which was related to adverse changes in U.S. tariff policies.

CEO Mike Dennison said:

We are pleased with our start to fiscal 2025, delivering first-quarter sales and adjusted earnings per share that met our expectations. Looking ahead, while end-market demand remains challenging and tariffs create additional uncertainty, we expect that the actions we have taken to optimize our business will allow us to generate free cash flow this year to further improve our balance sheet.

Can Fox Factory keep gaining?

For the second quarter, the company guided to revenue of $340 million-$360 million, and adjusted EPS of $0.32-$0.62. That forecast was roughly in line with analyst estimates.

For the full year, it reaffirmed guidance at $1.385 billion-$1.485 billion, and adjusted earnings per share of $1.60-$2.60, which compares to the consensus at $1.42 billion and $1.89 in EPS.

Fox Factory has slimmed down its cost structure and expects solid profit growth over the coming years. If it can follow through on those expectations, the stock should continue to move higher.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Why Fox Factory Stock Was Climbing Today was originally published by The Motley Fool

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