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

Financial Performance

• Net sales for the third quarter were $338.4 million, a 10.1% decrease from $376.4 million in the prior year period.
• Net loss attributable to stockholders was $109.6 million ($2.61 per diluted share), compared to a net loss of $0.6 million ($0.02 per diluted share) in the prior year.
• Adjusted net income was $22.7 million ($0.54 per diluted share), an increase from $9.9 million ($0.23 per diluted share) in the prior year.
• Adjusted EBITDA was $50.4 million, up from $44.4 million in the prior year, including approximately $12 million in IEEPA tariff refunds.
• Adjusted EBITDA margin was 14.9% for the quarter, compared to 11.8% in the prior year.
• Gross margin was 31.5% for the quarter, compared to 30.4% in the prior year, driven by tariff refunds offset by higher input costs.
• Total operating expenses were $205.2 million (60.6% of sales), compared to $99.4 million (26.4% of sales) in the prior year, driven by a $121.3 million loss on divestitures.
• Adjusted operating expenses were $68.7 million (20.3% of sales), down from $85.7 million (22.8% of sales) in the prior year.
• For the first nine months, net sales were $1,065.2 million, a 3.7% decrease from $1,106.2 million in the prior year.
• Nine-month net loss was $120.6 million ($2.87 per diluted share), compared to $257.6 million ($6.17 per diluted share) in the prior year.
• Nine-month adjusted net income was $45.6 million ($1.08 per diluted share), up from $36.3 million ($0.87 per diluted share).
• Nine-month adjusted EBITDA was $131.6 million, compared to $133.3 million in the prior year.
• Nine-month adjusted EBITDA margin was 12.4%, compared to 12.1% in the prior year.
• Cash and cash equivalents were $45.4 million as of October 2, 2026, down from $58.0 million as of January 2, 2026.
• Total debt was $397.4 million as of October 2, 2026, a decrease of $276.1 million from $673.5 million as of January 2, 2026.
• Net debt was $352.0 million as of October 2, 2026, a decrease of $263.5 million from $615.5 million as of January 2, 2026.
• Net leverage ratio was approximately 2.4x as of the end of the second quarter.
• Days inventory on hand improved to approximately 122 days from 148 days in the prior year period.

Guidance and Future Outlook

• Fourth quarter fiscal 2026 net sales are expected to be between $287 million and $313 million.
• Fourth quarter fiscal 2026 adjusted EBITDA is expected to be between $25 million and $30 million.
• Full fiscal 2026 net sales are expected to be between $1.35 billion and $1.38 billion.
• Full fiscal 2026 adjusted EBITDA is expected to be between $143 million and $148 million, excluding approximately $14 million in IEEPA tariff refunds.
• Full fiscal 2026 adjusted EBITDA, including IEEPA tariff refunds, is expected to be between $157 million and $162 million.
• Guidance reflects input costs at current levels, including aluminum, steel, and freight inflation, with no further increases assumed.
• The outlook assumes no additional IEEPA tariff refunds beyond those received in the second and third quarters.
• Fourth quarter guidance excludes Marucci Sports results.

Business Segments and Product Lines

• Aftermarket Applications Group (AAG) net sales decreased 20.4% to $93.8 million from $117.8 million in the prior year, driven by limited chassis availability, macroeconomic conditions, and divestiture losses.
• Specialty Sports Group (SSG) net sales decreased 14.4% to $113.6 million from $132.7 million in the prior year, primarily due to the Marucci Sports divestiture (contributing $33.0 million vs. $49.2 million prior year), order timing, and channel destocking.
• Powered Vehicles Group (PVG) net sales increased 4.1% to $131.0 million from $125.9 million in the prior year, driven by a 28.8% increase in powersports demand, partially offset by lower autos-related sales.
• Nine-month SSG net sales decreased 10.8% to $348.5 million from $390.9 million.
• Nine-month AAG net sales decreased 7.4% to $318.2 million from $343.8 million.
• Nine-month PVG net sales increased 7.3% to $398.6 million from $371.5 million.
• The Company completed the divestiture of Marucci Sports on September 25, 2026.

Market and Competitive Landscape

• Macroeconomic conditions are impacting dealers and consumers in the Aftermarket Applications segment.
• Channel destocking occurred in bike businesses in response to market-wide economic conditions.
• Demand is strengthening in the powersports sector within the Powered Vehicles Group.
• The Company faces elevated external input costs including freight, commodities, and fuel.

Risks and Challenges

• Supply disruptions occurred in the Powered Vehicles segment.
• Operational challenges were faced in the Aftermarket Applications' upfit business.
• The Company faces ongoing external cost increases for freight, commodities, and fuel.
• The Company is executing a Phase 2 profit optimization initiative to exit operations not accretive from a margin perspective.
• The Company continues to evaluate strategic alternatives for other assets.

Management Commentary and Tone

• Interim CEO Doug Grimm described the quarter as one of "significant change" with "decisive steps" taken to position the company for improved execution.
• Management stated the Marucci divestiture simplified the portfolio, increased focus on core products, and allowed for substantial debt reduction.
• Grimm noted the company is operating as "One FOX," working business-by-business and plant-by-plant to streamline processes and hold themselves accountable.
• Management expressed confidence in the company's brands, products, and team, believing there is a significant opportunity to turn strengths into stronger financial results.
• The company emphasized prioritizing investment in high-performance products.

Other Key Points

• Proceeds from the Marucci Divestiture were immediately allocated to debt reduction.
• The Company reduced total debt by $270.3 million during the third quarter, primarily funded by approximately $200.0 million in proceeds from the Marucci Divestiture.
• The Company captured approximately $41 million of gross savings in the first nine months of fiscal 2026 as part of its profit optimization strategy targeting $50 million in gross realized savings for the year.
• A quantitative reconciliation of adjusted EBITDA for the fourth quarter and full fiscal year 2026 is not available without unreasonable efforts.
• The Company held an investor conference call on November 5, 2026, at 4:30 p.m. Eastern Time.