One of the most unforgivable transgressions a publicly traded company can commit is to miss on its earnings. That was the reason investors punished vehicle components manufacturer Fox Factory Holding (FOXF 2.74%) on Friday. The market reacted sharply to the company's latest set of quarterly figures, trading out of the stock and sending its value down by almost 27% in price.
Top- and bottom-line skids
Due to what management characterized as "challenging macro and industry headwinds," Fox Factory's fourth-quarter net sales slid to $332 million from the year-ago tally of nearly $409 million. On a generally accepted accounting principles (GAAP) basis the company earned only $4 million and change ($0.10), a far cry from the almost $53 million profit it netted in the same quarter of 2022.
On average, analysts following Fox Factory's stock were expecting a much higher per-share net income figure of $0.83. At least the company beat on the top line, as those pundits were collectively modeling slightly over $327 million for that line item.
Of those mentioned headwinds, Fox Factory singled out the United Auto Workers strike and higher interest rates sapping customer demand, among other factors.
Guidance fell notably short of estimates
Another factor driving Fox Factory's stock down on Friday was the company's full-year 2024 guidance. It is forecasting that net sales will come in at $1.53 billion to $1.68 billion. While that range is notably above the $1.46 billion of 2023, it doesn't reach the almost $1.74 billion consensus analyst estimate.
Fox Factory feels that its non-GAAP (adjusted) earnings per share will land at $2.30 to $2.60. That's below both its 2023 result of $3.95, and the collective prognosticator expectation of $4.79.
