Fox Factory (NASDAQ:FOXF) reported second-quarter 2026 revenue at the high end of its guidance range and adjusted EBITDA above expectations, while raising its full-year sales outlook and maintaining its cost-savings target amid elevated commodity, freight and fuel expenses.
Revenue for the second quarter totaled $358.1 million, down 4.5% from a year earlier and 2.9% sequentially. Adjusted EBITDA was $45.5 million, about $5 million above the high end of the company’s guided range. The result included roughly $2 million in IEEPA tariff refunds; excluding those proceeds, adjusted EBITDA margin was approximately 12.2%, up about 250 basis points sequentially from the first quarter on a comparable basis.
Cost savings offset by inflation pressures
Fox Factory said it captured more than $25 million of gross savings during the first half and remains on track to achieve approximately $50 million for the full year. The company said the savings include roughly $10 million of carryover from phase one of its profit-optimization program and about $40 million from phase two.
However, the company said higher input costs have limited the net benefit. Chief Financial Officer Dennis Schemm said incremental input-cost inflation is running nearly $20 million above assumptions in the company’s full-year plan, driven by tariffs, commodities, freight and fuel costs. About $15 million of that additional pressure is expected in the second half.
Gross margin was 30.6%, compared with 31.2% a year earlier, as product mix and higher external costs more than offset cost-savings realization. Adjusted operating expenses fell to $78.5 million, or 21.9% of revenue, from $83.5 million, or 22.3% of revenue, in the prior-year period.
Schemm said the company does not assume relief in commodity, freight or fuel costs in its outlook. Fox Factory expects margin expansion in the second half as phase-two savings increase, last year’s tariffs are lapped and pricing and surcharge recovery initiatives move forward with OEM and channel partners.
Segment performance reflects mixed end markets
- Powered Vehicles Group: Net sales rose slightly year over year to $124.2 million. Powersports revenue increased 22.5% in the quarter and 28% in the first half, as OEM customers worked through channel inventory imbalances. Automotive results remained affected by aluminum supply constraints that reduced F-150 production, as well as supply-chain issues at Toyota.
- Aftermarket Applications Group: Sales fell 4% to $109.6 million, including an approximately $5.5 million impact from the Phoenix divestiture. Excluding that effect, the segment posted modest growth despite reduced F-150 volumes. Segment margin improved about 70 basis points year over year and roughly 500 basis points sequentially.
- Specialty Sports Group: Revenue declined 9.4% year over year to $124.3 million but rose 12.5% from the first quarter. The company said bicycle revenue should remain broadly stable for the year, with a seasonal pickup expected in the third quarter. Segment margin was essentially flat despite lower sales.
Dennison said Fox Factory is seeing stabilization in both powersports and premium bicycle suspension following periods of inventory disruption. In bike, he pointed to demand for new e-bike, drivetrain, battery and motor technologies, adding that some products have sold out. The company also said it launched next-year bicycle models during the second quarter.
Within Marucci, the company delayed a new bat launch from the second quarter into the third quarter to support inventory availability and give the product a stronger market launch. Dennison said the company is working through existing sporting-goods inventory while using innovation to support demand. He said softball has become an increasingly important contributor to Marucci, while Lizard Skins and certain glove categories have performed strongly.
New awards and programs expected to support future growth
Fox Factory said it launched 12 new vehicle fitments during the year, including expanded aftermarket Live Valve offerings. The company cited new powersports applications, including Kawasaki’s Teryx H2 with Fox’s advanced chassis control system and Polaris’ RZR Pro R Boost using Fox 3.0 Live Valve X2 shocks.
The company also said it received a new vehicle award from an existing automotive OEM that is expected to generate meaningful volume in 2028. Separately, it won business with a new electric-vehicle OEM for an autonomous-vehicle application. Shipments for that program are expected to begin late in 2026 and contribute incremental volume in 2027.
In its aftermarket upfitting business, Fox Factory said its traditional custom upfit operations remain its primary go-to-market model. But new OEM-driven customization programs are expected to provide dealer access, reduce marketing and sales complexity, and improve factory utilization, even though they generally carry less content per vehicle than traditional custom builds.
Guidance raised for revenue, EBITDA range narrowed
Fox Factory raised its full-year 2026 revenue outlook to a range of $1.42 billion to $1.47 billion. It narrowed adjusted EBITDA guidance to $176 million to $196 million, representing approximately 5% to 16% growth over fiscal 2025 on roughly flat revenue, according to the company.
The revised outlook implies full-year adjusted EBITDA margin of approximately 12.4% to 13.3%, below the roughly 13.1% to 14.3% margin range implied by February guidance because of inflation and mix dynamics.
For the third quarter, Fox Factory expects net sales of $355 million to $380 million and adjusted EBITDA of $46 million to $54 million. The outlook reflects the delayed Marucci product launch and normalization of bike volumes after a supplier disruption, partially offset by continued chassis supply constraints in automotive-related operations.
At quarter-end, cash and cash equivalents were $61.3 million, while total debt was $667.7 million, down $20.5 million sequentially. The company’s net leverage ratio was 3.7 times, compared with a five-times covenant under its amended credit agreement. Fox Factory said it expects meaningful debt reduction progress during the remainder of the year through EBITDA improvement, working-capital management and disciplined capital spending.
About Fox Factory (NASDAQ:FOXF)
Fox Factory Holding Corp., headquartered in Duluth, Minnesota, designs, engineers and manufactures high-performance suspension systems, shock absorbers and related components for powersports, light-vehicle and mountain-bike applications. The company’s FOX brand offers a comprehensive portfolio of forks, shocks, coilovers and internal bypass dampers aimed at OEM and aftermarket customers seeking enhanced ride quality, control and durability across off-road vehicles, motorcycles and bicycles.
Founded in 1974 by Bob Fox in California, Fox Factory has expanded its technology base and market reach through strategic acquisitions such as Marzocchi Suspension, DVO Suspension and Walker Evans Racing.
