Fox Factory stock plummets following disappointing profit forecast
Q3 Performance: Fox Factory reported a 5% increase in net sales for Q3, but incurred a loss of $662,000, contrasting with a net income of $4.8M a year prior, largely due to increased R&D and restructuring costs.
Market Reaction: Following the disappointing results and lowered guidance, Fox Factory's shares dropped 25% to a 9-year low, reflecting investor concerns over the company's performance and outlook.
Sales Breakdown: The sales growth was driven by a 17.4% rise in aftermarket applications and a 15.1% increase in powered vehicles, but was offset by an 11.2% decline in Specialty Sports Group sales due to inventory reductions by OEMs and distributors.
Future Guidance: For the current quarter, Fox Factory anticipates net sales between $340M to $370M and adjusted earnings significantly lower than previous estimates, with FY25 projections also revised downward.
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Consumer Stocks Show Weak Earnings Momentum, APEI and Others Rated F
- Earnings Momentum Assessment: As the earnings season approaches, analysis reveals that several mid to low cap consumer stocks exhibit weak earnings momentum, with American Public Education (APEI) receiving an F grade for EPS revisions, indicating significant downward pressure on analyst expectations for future earnings.
- Poor Industry Performance: Cracker Barrel Old Country Store (CBRL) and Caesars Entertainment (CZR) also received F ratings, suggesting these companies are under earnings pressure, which could negatively impact their stock performance and investor confidence.
- Market Trend Analysis: Fox Factory Holding (FOXF) and Six Flags Entertainment (FUN) also received F ratings for EPS revisions, indicating overall weak earnings momentum in the consumer sector, potentially prompting investors to reassess their portfolios.
- ETF Impact: Several consumer discretionary ETFs, such as XLY and VCR, are also affected due to the inclusion of multiple stocks with weak earnings momentum, which may influence overall market performance.
Validea's Leading Consumer Discretionary Stocks Inspired by Benjamin Graham - 11/25/2025
Top Rated Consumer Discretionary Stocks: The article highlights top-rated Consumer Discretionary stocks according to Validea's Value Investor model, which is based on Benjamin Graham's deep value methodology focusing on low P/B and P/E ratios, low debt, and solid long-term earnings growth.
Fox Factory Holding Corp (FOXF): This small-cap stock in the Auto & Truck Parts industry received an 86% rating, indicating strong interest based on its fundamentals and valuation, with a focus on performance-defining products for various vehicles.
Academy Sports and Outdoors Inc (ASO): A mid-cap value stock in the Retail (Specialty) industry, ASO also scored 86%, reflecting strong fundamentals and a diverse product assortment in sporting goods and outdoor recreation.
Other Notable Stocks: Mohawk Industries Inc (MHK), Nike Inc (NKE), and Deckers Outdoor Corp (DECK) are also discussed, with MHK rated at 71% and both NKE and DECK also at 71%, indicating varying levels of interest based on their fundamentals and valuations.
