SCOTTS VALLEY, Calif. (BRAIN) — Fox Factory's sales in its Speciality Sports Group, its bicycle-product division, were up 64% in the second fiscal quarter and 73% for the first half, compared to the same periods last year.
Bike-related sales, through the Fox, Marzocchi, Easton and RaceFace brands, totaled $138.7 million for the quarter and $257.2 million for the half.
The company said it was seeing strong demand especially in the OE channels for its bike products. The second quarter was the 6th quarter in a row to hit record sales in the SSG.
On an investor call, CEO Mike Dennison said that at the current pace, it will take 8-10 months for Fox to fulfill pre-orders for bicycle products and another 12-18 months to replenish depleted inventory channels at the distributor and retailer level.
Australian distributor acquisition
On May 21, Fox's Australian subsidiary paid $486,000 for Sola Sport Pty Ltd., which had been the distributor of Fox's bicycle suspension in Australia since 2008 and also distributed Marzocchi, RaceFace and Easton Cycling products.
Dennison told analysts on an investor call that the purchase was "more strategic than financial."
For the first time, Fox Factory, company-wide, crossed the $1 billion sales threshold on a trailing 12-months basis.
He said Sola, based in Sydney, "gives us a foothold in Australia, which we believe is an important market for Fox, in both for SSG and PVG (Powered Vehicle Group) going forward."
Company-wide sales
In the first half, the SSG provided 42% of the company's sales, with PVG providing the remainder.
Company-wide, Fox Factory first-half sales were $609.3 million, an increase of 65.8% over the first half of 2020.
For the first time, Fox Factory, company-wide, crossed the $1 billion sales threshold on a trailing 12-months basis.
Company-wide gross margin increased 110 basis points to 33.9%, compared to 32.8% in the same period last fiscal year. Net income was $44.3 million, or $1.05 of earnings per diluted share.
E-SUV sales stand out
Dennison told analysts that he was bullish on what he called the market for "E-SUVs", which he described as "more burly e-bikes that can carry kids and groceries and surfboards and everything else.
"That category has been on fire and it continues to be on fire .... people are thinking about other ways to be mobile ... they are thinking about electric cars for sure, but also thinking about electric bikes."
