Holley (NYSE:HLLY) Posts Quarterly Earnings Results, Misses Expectations By $0.01 EPS

Key Points

• Holley reported Q3 EPS of $0.06, $0.01 below consensus, and revenue of $141.56 million, also below expectations of $145.8 million.
• Underlying results showed improvement: core sales grew 6.7%, gross margin expanded to 44%, and the company generated $8.8 million in free cash flow while paying down $25 million of debt.
• Holley narrowed the upper end of its full-year sales and adjusted EBITDA outlook, citing cautious consumer sentiment and macroeconomic uncertainty; core sales in its Euro & Import division fell 12.2%.

Holley (NYSE:HLLY - Get Free Report) released its earnings results on Thursday. The company reported $0.06 EPS for the quarter, missing the consensus estimate of $0.07 by ($0.01), FiscalAI reports. The business had revenue of $141.56 million for the quarter, compared to analyst estimates of $145.80 million. Holley had a return on equity of 8.41% and a net margin of 1.68%.

Here are the key takeaways from Holley's conference call:

• Core growth broadened: Third-quarter net sales rose 2.3% to $141.6 million, while core sales excluding exited businesses grew 6.7%, accelerating from 4.9% in Q2. American Performance returned to growth, and three of four divisions posted core growth.
• Margins and cash flow improved: Gross margin expanded 73 basis points to 44%, and adjusted EBITDA margin rose 120 basis points to 20.8%. Free cash flow increased to $8.8 million; management attributed the gains to cost savings, operational improvements, and exiting lower-margin businesses.
• Leverage reached its year-end target early: Holley reduced debt by $25 million in the quarter, bringing its leverage ratio to 3.5x and cumulative debt reduction since September 2023 to $125 million. The company also completed the SXTH Element acquisition after quarter-end and announced an Amotiv collaboration to expand its reach.
• Full-year guidance was narrowed at the top end: Holley now expects net sales of $610 million–$625 million and adjusted EBITDA of $127 million–$132 million. Management cited cautious consumer sentiment, higher fuel prices, macroeconomic uncertainty, and delays to some product launches, while keeping the bottom ends of the ranges unchanged.
• Euro & Import remained a weak spot: Core sales in the division fell 12.2%, which management attributed to lower in-stock rates and marketing activity shifted out of Q3. The company said inventory availability had improved entering Q4 and that it had adjusted the marketing calendar.

Holley Stock Performance

NYSE:HLLY traded down $0.06 during mid-day trading on Friday, hitting $2.08. 4,926,379 shares of the company traded hands, compared to its average volume of 972,107. The stock's fifty day moving average price is $2.59 and its 200-day moving average price is $2.97. The company has a quick ratio of 1.39, a current ratio of 3.06 and a debt-to-equity ratio of 1.15. Holley has a one year low of $2.05 and a one year high of $4.48. The firm has a market cap of $252.76 million, a price-to-earnings ratio of 13.90 and a beta of 1.44.

Wall Street Analysts Forecast Growth

Several research firms have recently issued reports on HLLY. Freedom Capital lowered shares of Holley from a "strong-buy" rating to a "hold" rating in a research note on Thursday, August 13th. Wall Street Zen raised Holley from a "hold" rating to a "buy" rating in a research report on Saturday, August 8th. DA Davidson set a $3.00 target price on Holley in a research note on Friday. Zacks Research cut Holley from a "strong-buy" rating to a "hold" rating in a research note on Monday, October 5th. Finally, Canaccord Genuity Group reduced their price target on shares of Holley from $7.00 to $5.00 and set a "buy" rating for the company in a research report on Friday. Three research analysts have rated the stock with a Buy rating, three have given a Hold rating and one has given a Sell rating to the stock. According to MarketBeat.com, Holley presently has a consensus rating of "Hold" and an average price target of $4.20.

Key Holley News

Here are the key news stories impacting Holley this week:

• Positive Sentiment: Holley reported continued sales growth and margin expansion, generating enough cash to prepay $25 million of debt. It said leverage reached its lowest level in four years and its 3.5x year-end leverage target was achieved a quarter early. Holley Q3 results
• Positive Sentiment: Canaccord Genuity lowered its price target to $5 from $7 but kept a Buy rating, signaling the analyst still sees significant potential upside from the recent share price. Canaccord price target update
• Neutral Sentiment: Management forecast 2026 adjusted EBITDA of $127 million–$132 million and net sales of $610 million–$625 million. The sales range’s upper end is near, but its midpoint is below, analysts’ roughly $624.6 million estimate. Holley 2026 outlook
• Negative Sentiment: Third-quarter EPS of $0.06 missed the $0.07 consensus, while revenue of $141.56 million was below analysts’ $145.8 million estimate. The shortfalls may weigh on sentiment despite year-over-year EPS growth from $0.03. Q3 earnings and revenue results

Holley Company Profile

Holley Inc is an automotive aftermarket company that designs, manufactures and distributes performance products for cars, trucks, powersports vehicles and other enthusiast applications. Its offerings include fuel systems, engine and ignition components, exhaust products, suspension and driveline components, electronic controls, vehicle accessories and safety equipment.

The company serves do-it-yourself consumers, professional installers, racing teams, automotive enthusiasts and original equipment manufacturers through a portfolio of established aftermarket brands.

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