Foxx kept roughly 3 cents of every sales dollar in the year ended June 30, down from about 7 cents a year earlier. The company sold $52.6 million of products, but gross profit fell to $1.7 million.
That is the surface read: a smaller business with almost no room left between selling prices and product costs. Revenue fell 20.2% from $65.9 million, while the operating loss widened to $43.9 million from $9.7 million.
The sharper detail is that the margin collapse was not just a volume problem. Foxx recorded a $1.0 million impairment on slow-moving inventory while also dealing with tariffs, chip costs and pricing uncertainty.
Management described the broad effect this way:
"The decrease in gross profit percentage of 4.0% was primarily due to the decrease in gross profit percentage across nearly all categories, which collectively accounted for 90% of our gross profit, with the exception of tablet, attributable to inventory impairment, tariffs and related pricing uncertainty, and product costs."
Foxx 10-K, Sept. 28, 2026
The plain-English version puts the sales number in context. Nearly all of the important categories carried lower margins, and the company says higher costs pushed it toward higher selling prices, which reduced consumer demand and order value.
"The decline was primarily driven by the declined consumer demand and lower order value due to our intention of increasing selling prices in response to higher costs driven by rising chip prices, tariffs and related pricing uncertainty."
Foxx 10-K, Sept. 28, 2026
That leaves two different movements in the same year. Operating cash outflow improved to $358,000 from $6.6 million, but revenue contracted and cash ended at $1.5 million. Diluted shares rose 12.6% to 6.9 million, so the smaller loss in cash usage did not come with a larger operating base.
The inventory charge also helps explain why Foxx's gross profit fell much faster than sales. In wearable products and other goods, cost of goods sold rose 17.9% to $3.6 million, and the company attributed that increase primarily to the $1.0 million impairment tied to slow-moving inventory. Another disclosure also attributes another charge to roughly $5.8 million of slow-moving inventory, underscoring how much the product mix and inventory process matter to the reported loss.
The annual history makes the comparison unusually noisy. Revenue went from $3.2 million in fiscal 2024 to $65.9 million in fiscal 2025, then back to $52.6 million in the latest year. Growth had already produced thin margins; the latest filing shows those margins narrowing further as the company sold more lower-margin products and repriced around higher costs.
Foxx has not answered how much of the margin pressure belongs to the inventory impairment, and how much remains after the tariff and pricing uncertainty described in the 10-K. That is the unresolved question in the company's next annual comparison.
What gross margin will Foxx report after the slow-moving inventory impairment and tariff-related pricing uncertainty disclosed in its 2026 10-K?