Fox Factory Holding Corp.

What they do

Fox Factory designs and makes premium suspension components and systems for bikes, side-by-sides, on-road and off-road vehicles, ATVs, snowmobiles, and motorcycles, plus premium baseball and softball gear. It sells to leading OEMs like Specialized, Trek, Ford, Polaris, and Toyota, and through dealers, distributors, and direct-to-consumer channels. The company operates in three segments: Powered Vehicles Group (PVG), Aftermarket Applications Group (AAG), and Specialty Sports Group (SSG).

Revenue drivers

• Powered Vehicles Group (PVG) — Sales to off-road and power sports OEM and aftermarket businesses; Q2 2026 net sales $124.2M, up 0.6% year over year, with powersports sales up 22.5%.
• Specialty Sports Group (SSG) — Bike (mountain, e-bike, gravel) components and baseball/softball equipment; Q2 2026 net sales $124.3M, down 9.4% year over year due to OEM order timing and channel destocking.
• Aftermarket Applications Group (AAG) — Custom vehicle shock, tuning, suspension, lift kit, upfitting, and wheel/tire solutions; Q2 2026 net sales $109.6M, down 4.0%, but up ~0.9% excluding divested Phoenix operations.

Recent performance

For Q2 fiscal 2026 (ended July 3, 2026), net sales were $358.1M, down 4.5% year over year. Net income was $4.1M, or $0.10 per diluted share, versus $2.7M, or $0.07, a year ago. Adjusted net income was $15.5M, or $0.37 per share, and adjusted EBITDA was $45.5M, exceeding guidance. Fiscal 2026 full year (ended January 2, 2026) net sales were $1.47B, with a net loss of $544.6M, or -$13.03 per share. The company reduced net debt by $9.1M since fiscal 2025 year end and improved cash conversion cycle by ~12 days.

Strategy

Management is executing a profit optimization initiative targeting approximately $50M in gross cost savings for fiscal 2026, with $25M+ achieved in the first half. The portfolio is being rationalized and supply chain and operating expenses refined. The company is also divesting non-core assets, such as the Phoenix, Arizona operations, and focusing on becoming a more efficient organization. Additionally, it is pursuing strategic review of its portfolio, including possible divestitures, and expects continued strength in powersports and recovery in upfit businesses as Ford F-150 chassis availability improves.

Risks

• Dependence on limited suppliers — The company relies on a limited number of suppliers for materials and components, which can lead to cost increases or supply disruptions, as seen with Ford F-150 chassis constraints after the Novelis aluminum facility fire.
• Macroeconomic headwinds — Higher tariffs, freight, commodities, and fuel costs are pressuring margins, and the company faces risks from inflation, interest rates, and geopolitical tensions affecting consumer spending.
• Consumer demand variability — Changes in consumer preferences and economic conditions could reduce demand for premium products, particularly in bike and aftermarket segments, leading to inventory destocking.
• Regulatory and environmental compliance — Operations are subject to extensive environmental, safety, and product safety regulations; failure to comply could result in fines, recalls, or operational restrictions.

Outlook

Management expects continued revenue strength in the back half of fiscal 2026, driven by PVG, but overall adjusted EBITDA margin will be tempered by macro headwinds and mix shifts. Ford F-150 chassis availability is assumed to remain constrained through August and recover in early September. The profit optimization initiative is on track to deliver ~$50M gross savings, though input costs from geopolitical disruption and commodity inflation exceeded original expectations.