Fox Factory Reports Q2 2026 Financial Results with Decrease in Net Sales but Increase in Profitability

Fox Factory Holding Corp. reported its financial results for the second quarter of fiscal 2026, revealing a decrease in net sales and a modest increase in profitability compared to the same period last year. For the three months ended July 3, 2026, the company generated net sales of $358.1 million, down 4.5% from $374.9 million in the prior year. The decline was attributed to reduced inventory levels among OEMs and distributors in response to broader economic conditions, although there was a noted increase in demand for powersports and aftermarket applications group products. Gross profit for the quarter was $109.7 million, resulting in a gross margin of 30.6%, a slight decrease from 31.2% in the previous year.

In terms of profitability, Fox Factory reported a net income of $4.0 million for the quarter, a 48.1% increase from $2.7 million in the same quarter last year. This improvement was driven by a reduction in operating expenses, which totaled $92.2 million, down from $98.5 million a year earlier. The decrease in operating expenses was primarily due to strategic optimization initiatives, including a reduction in general and administrative costs. Interest expense also decreased to $11.9 million from $14.4 million, contributing to the overall improvement in net income.

For the six months ended July 3, 2026, Fox Factory's net sales were $726.8 million, a slight decline of 0.4% from $729.9 million in the same period last year. The company experienced a significant reduction in operating expenses, which fell to $192.6 million from $458.7 million, largely due to the absence of a goodwill impairment charge that had impacted the previous year’s results. The net loss for the first half of the fiscal year was $11.0 million, a substantial improvement from a loss of $257.0 million in the prior year, reflecting a recovery in operational performance.

Operationally, Fox Factory continues to focus on its three segments: Powered Vehicles Group, Aftermarket Applications Group, and Specialty Sports Group. The Powered Vehicles Group saw a 9.0% increase in net sales, driven by strong demand in powersports. However, the Specialty Sports Group experienced a 9.1% decline in sales, primarily due to inventory reductions by OEMs and distributors. The company is also navigating challenges related to tariffs and inflation, which have introduced additional costs and uncertainty into its supply chain.

Looking ahead, Fox Factory remains optimistic about its growth prospects, supported by its liquidity position and access to credit facilities. The company anticipates that cash on hand, operational cash flows, and available credit will be sufficient to fund its operations over the next 12 months. However, it acknowledges the potential impact of ongoing geopolitical tensions, inflationary pressures, and interest rate volatility on its financial performance and operational strategies.