Financial Data and Key Metrics Changes - For fiscal year 2024, the company expects sales in the range of 1.68 billion and adjusted earnings per diluted share of 2.60 [6] - Total consolidated net sales in Q4 2023 were 408.6 million in Q4 2022 [59] - Net income in Q4 2023 was 0.10 per diluted share, down from 1.25 per diluted share in the same prior year period [72] Business Line Data and Key Metrics Changes - In the Powered Vehicle Group (PVG), net sales were 133 million in the prior year quarter due to the UAW strike's impact [31] - The Aftermarket Applications Group (AAG) saw sales rise to 117 million in the prior year quarter, driven by the custom warehouse business [34] - Specialty Sports Group (SSG) experienced a 41.4% decrease in net sales compared to Q4 2022, primarily due to high inventory levels [51] Market Data and Key Metrics Changes - The company noted that the high interest rate environment has pressured dealer inventory levels, leading to conservative purchasing practices [32] - The e-commerce business expanded significantly, with direct-to-consumer sales reaching 3.6% of total sales, up 260 basis points from 2022 [46] - The company expects the first half of 2024 to decline year-over-year, with growth anticipated in the second half driven by easing macro pressures [71] Company Strategy and Development Direction - The company is focused on maintaining a strong balance sheet and investing in R&D to support new product launches and market share growth [4][8] - The strategy includes a commitment to innovation and product development, with plans to launch over 150 new products in 2024 [88] - The company aims to leverage its acquisitions, such as Marucci, to enhance growth and market presence [42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business despite ongoing challenges, citing a robust pipeline of innovative products and strong customer relationships [3][4] - The company anticipates a return to a more normal operating environment by late Q2 2024, contingent on improved chassis supply and OEM production [24] - Management acknowledged the need for caution in forecasting due to the dynamic environment and uncertainties in customer demand [7][90] Other Important Information - The company reported an adjusted gross margin decrease of 300 basis points to 29% in Q4 2023 compared to 32% in Q4 2022 [53] - The effective tax benefit was 0.2 million in Q4 2022 [56] - The company has a flexible capital structure, allowing for investments in growth and share repurchases [57] Q&A Session Summary Question: What is the idea with the revisions that are working on? - Management highlighted optimism due to product launches and new customer relationships, indicating a positive outlook for the second half of the year [2] Question: How much of the improvement is driven by demand versus supply chain improvements? - Management noted that improvements are expected from both demand recovery and supply chain enhancements, particularly in chassis availability [21] Question: What are the expectations for the various business segments in 2024? - Management indicated that SSG is expected to be flat to down, while PVG and AAG are anticipated to show growth, driven by new product launches [95][97]
Fox(FOXF) - 2023 Q4 - Earnings Call Transcript