Holley Inc. reported its financial results for the second quarter of fiscal 2026, revealing a net loss of $2.4 million, a significant decline from the net income of $10.9 million recorded in the same period last year. The company's net sales increased by 3.2% to $172.0 million, compared to $166.7 million in the prior year, primarily driven by incremental sales from the recent acquisition of HRX S.r.l. and improved pricing strategies. However, this growth was offset by a decrease in sales volume, which fell by approximately $9.4 million.
The company's cost of goods sold rose by 4.5% to $101.5 million, influenced by higher tariff-related costs and additional expenses associated with the HRX acquisition. Gross profit for the quarter increased slightly to $70.5 million, but the gross margin decreased to 41.0% from 41.7% due to fixed cost deleverage on lower sales volume. Selling, general, and administrative expenses surged by 22.7% to $40.4 million, attributed to increased legal fees and higher administrative costs related to the company's ongoing portfolio rebalancing initiative.
In terms of operational developments, Holley completed the acquisition of HRX, an Italian motorsports racewear brand, on March 18, 2026, which is expected to enhance its presence in European motorsports. Additionally, the company divested three brands—ADS, Speartech, and the Drake Brands—during the quarter, resulting in a loss on the sale of assets totaling $28.3 million. These divestitures are part of Holley's strategy to focus on core brands and align resources with long-term growth opportunities.
Looking ahead, Holley anticipates continued challenges from macroeconomic factors, including inflation and supply chain disruptions, which may impact profitability. The company has implemented cost-saving initiatives and is actively managing inventory levels to mitigate these effects. Holley remains committed to evaluating further strategic acquisitions and divestitures to enhance its market position and operational efficiency. As of June 28, 2026, the company had cash and cash equivalents of $69.0 million and availability of $97.5 million under its revolving credit facility, positioning it to meet its operational and capital needs in the near term.
About Holley Inc.
Holley Inc. designs, manufactures, and distributes high-performance automotive aftermarket products, including carburetors, fuel systems, exhausts, and engine components. Serving car enthusiasts primarily in the U.S., Canada, and Europe, it leverages strong brands and innovative R&D to drive growth across multiple consumer verticals. Its business model emphasizes brand reputation, product innovation, omni-channel distribution, and community engagement to maintain market leadership.
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