Holley (HLLY) Q4 2024 earnings summary

Executive summary

• Achieved significant transformation milestones in 2024, including leadership upgrades, operational improvements, and organizational enhancements, despite a challenging consumer environment and market headwinds.

• 2024 full-year results met or exceeded guidance, with net sales of $602.2M and adjusted EBITDA of $110.5M.

• Direct-to-consumer business grew 8% year-over-year, with eCommerce sales surpassing $100M and strong gains in B2B and national retailer channels.

• Launched over 88 new products, streamlined SKUs, and implemented digital modernization initiatives.

• Implemented cost-saving initiatives, delivering $7.8M in cost-to-serve savings and improved inventory turns by 0.1x year-over-year.

Financial highlights

• Q4 2024 net sales were $140.1M, down 10.1% year-over-year; full-year net sales were $602.2M, down 8.7% from 2023.

• Q4 gross margin improved 690 bps to 45.6%; full-year gross margin expanded 80 bps to 39.6%.

• Q4 adjusted EBITDA was $29.1M (20.8% margin); full-year adjusted EBITDA was $110.5M (18.3% margin), including $8.2M in non-cash product rationalization charges.

• Q4 net loss of $37.8M due to $48.6M in non-cash impairment charges; full-year net loss was $23.2M.

• Free cash flow for 2024 was $41.8M, down from $83.6M in 2023, reflecting lower inventory reductions.

Outlook and guidance

• 2025 net sales guidance: $580–$600M, representing 0.8%–4.3% growth year-over-year, with most growth expected in the back half.

• 2025 adjusted EBITDA guidance: $113–$130M; capital expenditures expected at $12M–$16M.

• Guidance assumes no further deterioration in consumer environment; tariff impacts not included but being monitored.

• Early 2025 indicators show softening consumer sentiment and slowing discretionary spending.