Aug 6, 2026, 4:08 PM ETConsumer Cyclical

Fox Factory Holding Corp. — Second Quarter Fiscal 2026 Earnings Summary

FOXFFOX FACTORY HOLDING CORP

Financial Performance

Net sales for Q2 fiscal 2026 were $358.1 million, a 4.5% decrease from $374.9 million in the prior year period.
Net income attributable to stockholders was $4.1 million ($0.10 per diluted share), compared to $2.7 million ($0.07 per diluted share) in the prior year.
Adjusted net income was $15.5 million ($0.37 per diluted share), down from $16.6 million ($0.40 per diluted share) in the prior year.
Adjusted EBITDA was $45.5 million, including approximately $2 million in IEEPA tariff refunds, compared to $49.3 million in the prior year.
Adjusted EBITDA margin was 12.7% (or 12.2% excluding tariff refunds), expanding approximately 250 basis points sequentially excluding refunds.
Gross margin was 30.6% in Q2 2026, down from 31.2% in the prior year, driven by product mix shifts and higher input costs.
Total operating expenses were $92.2 million (25.7% of net sales), down from $98.5 million (26.3% of net sales) in the prior year.
Adjusted operating expenses were $78.5 million (21.9% of net sales), down from $83.5 million (22.3% of net sales) in the prior year.
Net debt decreased by $9.1 million to $606.4 million as of July 3, 2026, from $615.5 million at the start of the fiscal year.
Cash and cash equivalents were $61.3 million as of July 3, 2026, compared to $58.0 million as of January 2, 2026.
Days inventory on hand improved to approximately 136 days from approximately 150 days in the prior year period.

Q3 fiscal 2026 net sales guidance is raised to a range of $355 million to $380 million.
Q3 fiscal 2026 adjusted EBITDA guidance is raised to a range of $46 million to $54 million.
Full-year fiscal 2026 net sales guidance is raised to a range of $1.42 billion to $1.47 billion.
Full-year fiscal 2026 adjusted EBITDA guidance is narrowed to a range of $176 million to $196 million.
Guidance assumes commodity, freight, and fuel costs remain at or near current elevated levels.
Guidance absorbs nearly $20 million of incremental input cost inflation beyond the original fiscal 2026 plan.
Guidance assumes Ford F-150 chassis availability remains constrained through August and begins to recover in early September.
The company expects continued strength in revenue through the back half driven by the Powered Vehicles Group (PVG).
The company may be eligible to recover up to $8 million of additional tariff costs under the IEEPA framework, though this is excluded from outlook due to uncertainty.

Specialty Sports Group (SSG) net sales decreased $12.9 million (9.4%) to $124.3 million, driven by OEM order timing and channel destocking.
Aftermarket Applications Group (AAG) net sales decreased $4.6 million (4.0%) to $109.6 million; excluding divested Phoenix operations, sales increased approximately 0.9%.
Powered Vehicles Group (PVG) net sales increased $0.7 million (0.6%) to $124.2 million, driven by a 22.5% increase in powersports demand.
The Phoenix, Arizona AAG operations divested in Q1 contributed $5.5 million in sales in the prior year period and $0 in the current period.
AAG growth was limited by constrained availability of Ford F-150 chassis following the 2025 fires at Novelis' Oswego, New York aluminum facility.
The profit optimization initiative delivered over $25 million of gross savings in the first half of fiscal 2026, targeting $50 million for the full year.
Phase 2 of the optimization strategy focuses on business line rationalization, supply chain productivity, and operating expense reductions.

The company observed signs of stabilization in powersports, bike, and aftermarket sectors.
Upfit businesses remain constrained by limited availability of Ford F-150 chassis.
The company is focused on sharpening its portfolio and becoming a more efficient organization.
The company amended its credit agreement in May to expand the net leverage covenant to 5.0x (from 4.5x); the current net leverage ratio is 3.7x.

External cost increases including tariffs, freight, commodities, and fuel have offset some cost savings.
Geopolitical disruption and commodity inflation, including freight surcharges and fuel costs above original expectations, are impacting margins.
Potential recovery of tariff costs under IEEPA is subject to significant uncertainty regarding timing and amount.
Forward-looking statements are subject to risks including supply chain disruptions, regulatory changes, and macroeconomic conditions.

CEO Mike Dennison stated results met or exceeded guidance, with adjusted EBITDA margin expanding approximately 250 basis points sequentially excluding tariff refunds.
Management expressed encouragement regarding signs of stabilization in key markets.
Management emphasized continued focus on portfolio rationalization and cost discipline to drive profitability despite headwinds.
The tone indicates confidence in the profit optimization strategy while acknowledging near-term macro challenges.

The company recorded a $10.6 million loss on the divestiture of Phoenix, Arizona AAG operations in the first six months of fiscal 2026.
A $262.1 million goodwill impairment was recorded in the first six months of fiscal 2025, which is excluded from current adjusted metrics.
The company proactively amended its credit agreement to provide additional financial flexibility.
Inventory decreased by $5.7 million from January 2, 2026, driven by divested inventory, partially offset by a build to support second-half demand.
Accounts receivable increased to $198.8 million from $190.7 million, attributed to timing of collections.
Accounts payable decreased to $134.9 million from $141.4 million, reflecting timing of vendor payments.
The company holds a net leverage ratio of 3.7x, well within the expanded 5.0x covenant limit.