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 6.91%) 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.
NASDAQ: FOXF
Key Data Points
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.
