Fox Factory Cuts Profit Outlook After Two Quarterly Beats

The Tip Desk · October 17, 2026 · 3 min read

Fox Factory cut its annual adjusted EBITDA forecast to $140 million to $150 million, excluding tariff refunds, and appointed an interim chief executive.

The performance-products maker Fox Factory Holding Corp. (FOXF) warned that preliminary third-quarter results fell below expectations, breaking a run of two quarters in which adjusted EBITDA exceeded guidance. The setback interrupted an improvement in profitability built around cost reductions and portfolio changes. The company also lowered its annual outlook, while its board replaced Chief Executive Mike Dennison with independent director Douglas Grimm on an interim basis.

For the quarter ended October 2, Fox Factory expects adjusted EBITDA of $38 million to $42 million, excluding approximately $12 million of tariff refunds. That fell short of guidance of $46 million to $54 million, which assumed no refunds. The preliminary figures remained subject to completion of the company’s financial close and had not been audited or reviewed by its independent accountant.

The warning followed a second quarter in which adjusted EBITDA margin reached 12.7%, expanding 300 basis points sequentially. Fox Factory attributed that improvement to its profit optimization work across portfolio rationalization, supply chain operations and expense management. Excluding tariff refunds, the sequential expansion had been approximately 250 basis points.

The third-quarter sales shortfall extended beyond the removal of Marucci Sports, whose sale closed September 25. Excluding Marucci, preliminary sales were $303 million to $307 million, below the previous outlook of $311 million to $332 million. Marucci contributed approximately $33 million before the closing. The remaining businesses therefore also fell short of the sales levels embedded in the company’s plan.

For the full year, sales guidance is $1.35 billion to $1.38 billion, against the previous $1.42 billion to $1.47 billion range. Approximately $63 million of the reduction reflected Marucci. The revised annual outlook reflects the divestiture, preliminary third-quarter performance and updated expectations for the final quarter.

The annual profit revision was also substantial. Adjusted EBITDA guidance, excluding approximately $14 million of tariff refunds received during the second and third quarters, is $140 million to $150 million, compared with the previous $176 million to $196 million range. The company separately presented an outlook including those refunds, distinguishing the recoveries from the operating assumptions underlying its reduced forecast.

The third-quarter miss primarily reflected lower sales and margins at Marucci before its sale, together with problems across Fox Factory’s continuing businesses. In Powered Vehicles Group, the company cited a supply disruption, associated higher operating costs and unfavorable mix. Aftermarket Applications Group’s upfit business also faced operating challenges. Softer bike sales in Specialty Sports Group contributed to a lesser extent.

Powered Vehicles had already lost much of its earlier growth: year-over-year sales growth slowed from 17.4% in the first quarter to 0.6% in the second. Second-quarter segment sales totaled $124.2 million. On that same quarterly basis, Specialty Sports generated $124.3 million and Aftermarket Applications generated $109.6 million. Third-quarter segment sales totals were not provided in the preliminary update.

The leadership change took effect October 16, with Dennison leaving both the chief executive role and the board. Fox Factory retained Heidrick & Struggles to assist with the permanent search. Grimm remained a director and a member of the Transformation Committee, but was not a candidate for the permanent position. Finance chief Dennis Schemm continued to lead the profit optimization program.

Fourth-quarter guidance is for sales of $287 million to $313 million and adjusted EBITDA of $23 million to $29 million, excluding Marucci. Sales are expected to remain in line with the company’s previous underlying assumptions for the continuing businesses. The reduced profit assumptions incorporate continuing supply disruption, steel, aluminum and freight inflation, and chassis shortages and operating challenges in upfit. The outlook assumes input costs stay at current levels, with no further increases.