VOXX said its sales of aftermarket car audio fell more than expected for the recent quarter ending November 30, 2022, but sales of OEM automotive products rose slightly.
Aftermarket car security sales (VOXX, Directed) fell by $11.8 million and satellite radio sales fell $1.2 million compared to the quarter a year ago.
OEM sales rose by $600K and would have climbed higher but for chip shortages which stalled production on new cars, said VOXX.
In all, VOXX automotive sales for the quarter fell by $13 million to $48.6 million.
VOXX CEO Pat Lavelle told analysts in a conference call, “…automotive aftermarket declines were primarily driven by softness in the economy, higher interest rates,” and a slowdown in discretionary spending.
He also said, “As for the aftermarket, we expected some softness, but not at the levels we experienced.” A key cause was that “a good portion of our distribution base had inventory left over from last year. The volume of ordering has also been slower as they know they can get supply when they need it. Additionally, approximately 50 percent of our aftermarket remote start and security business is with new car dealers and there simply aren’t enough cars on the lots.”
Despite the challenges, VOXX said its OEM sales should continue to grow and pointed to new contracts with OEM suppliers. Overall, the automotive segment saw a pre-tax profit of $3.1 million compared to $4.8 million for the quarter a year ago.
The company implemented many cost cutting measures recently, including starting production in a facility in Mexico. Operating expenses were down over 20 percent for the quarter compared to last year.
In all, for all categories, VOXX net income swung to a profit of $7.4 million, compared to a net loss of $28.1 million for the year ago quarter.
Net sales were $143.1 million compared to net sales of $191.9 million a year ago.
The above report was for VOXX’s fiscal third quarter ending in November. For the full nine months of the fiscal year, VOXX net sales were $397.5 million compared to net sales of $472.0 million the year earlier. The company narrowed its net loss for the 9 months to $9.3 million, compared to $25.1 million a year ago.