diff --git a/flox/core.py b/flox/core.py
index 7613c1f24..b4e68c23f 100644
--- a/flox/core.py
+++ b/flox/core.py
@@ -462,7 +462,7 @@ def factorize_(
         group_idx = factorized[0]
 
     if fastpath:
-        return group_idx, found_groups, grp_shape
+        return group_idx.reshape(by[0].shape), found_groups, grp_shape
 
     if np.isscalar(axis) and groupvar.ndim > 1:
         # Not reducing along all dimensions of by
diff --git a/tests/test_xarray.py b/tests/test_xarray.py
index cb74617ea..5f779d0ad 100644
--- a/tests/test_xarray.py
+++ b/tests/test_xarray.py
@@ -430,3 +430,24 @@ def test_datetime_array_reduce(use_cftime, func):
     expected = getattr(time.resample(time="YS"), func)()
     actual = resample_reduce(time.resample(time="YS"), func=func, engine="flox")
     assert_equal(expected, actual)
+
+
+@requires_dask
+def test_groupby_bins_indexed_coordinate():
+    ds = (
+        xr.tutorial.open_dataset("air_temperature")
+        .isel(time=slice(100))
+        .chunk({"time": 20, "lat": 5})
+    )
+    bins = [40, 50, 60, 70]
+    expected = ds.groupby_bins("lat", bins=bins).mean(keep_attrs=True, dim=...)
+    actual = xarray_reduce(
+        ds,
+        ds.lat,
+        dim=ds.air.dims,
+        expected_groups=([40, 50, 60, 70],),
+        isbin=(True,),
+        func="mean",
+        method="split-reduce",
+    )
+    xr.testing.assert_allclose(expected, actual)