VOXX International reported a decline in its automotive aftermarket sales for the quarter ending August 31, and a drop in sales for the company overall.
VOXX CEO Pat Lavelle, said that after a challenging two quarters, VOXX expects to turn a profit by the end of the second half of its current fiscal year (ending in February, 2024), contingent on factors such as the UAW strike.
Aftermarket sales for the quarter were $19.2 million compared to $22 million for the same period a year ago. VOXX owns both VOXX and Directed (DEI) security brands.
Lavelle told analysts on a call Wednesday that the aftermarket decline was expected due to retailers carrying high inventory levels. “The good news is that the inventory bottleneck is beginning to loosen,” he said, adding, “The automotive aftermarket overall continues to be challenged with puts and takes. On one hand, we see an increase in car sales, however the largest part of the increase is in fleets instead of retail car sales.”
Lavelle continued, “Additionally, where car dealers would normally offer aftermarket products to increase profitability, the tightness in inventory and strong demand has allowed them to just add market adjustment increases to the sticker price.”
OEM sales were up, rising to $16.3 million versus $15.2 million a year ago due to fulfilling backorders from the materials shortages of the past few years.
“We now expect, with the potential of an extended UAW strike, that [vehicle] inventory tightness will continue, but with that said, the other OEM contracts that are in place, even at lower than projected volumes, should help drive top line,” said Lavelle.
Overall, VOXX’s Automotive Electronics segment (one of three segments) saw a sales decline of 4.8 percent to $35.4 million compared to $37.2 million a year ago.
The company noted it continues to reduce operating costs. It has taken restructuring measures, and it completed the move of a factory from Florida to Mexico.
Also, VOXX announced that Gentex, maker of rear view mirrors, has taken a 15 percent stake in VOXX.
Gentex produces rear view mirrors and was a pioneer of the video streaming mirror used by OEMs including Cadillac. VOXX has been an aftermarket distributor of Gentex mirrors, as well.
In other categories, VOXX’s Consumer Electronics segment saw a 15 percent sales decline to $151.4 million. Biometrics sales fell slightly to $0.2 million from $0.3 million a year ago.
Total VOXX sales for its fiscal Q2 2024 fell 12 percent to $113.6 million. The company narrowed its operating loss to $8.5 million, compared to $10 million a year ago. Net loss was $11.1 million compared to $10.2 million a year ago.
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