Fox Factory shares tumble following CEO departure and outlook reduction

Investing.com -- Fox Factory Holding Corp (NASDAQ: FOXF) shares slid 9.5% in Friday trading following a sudden executive restructuring and a sharp reduction to its full-year financial outlook driven by operational disruptions and soft quarterly demand. The board named independent director Douglas Grimm as interim chief executive officer, succeeding Mike Dennison, who stepped down from his executive role and directorship after leading the specialty components manufacturer since 2019.

The management shakeup coincides with disappointing preliminary results for the third quarter ended October 2, 2026, where net sales are expected between $336 million and $340 million, falling well short of previous guidance of $355 million to $380 million. Adjusted EBITDA for the period is projected at $38 million to $42 million, excluding $12 million in tariff refunds, missing the company’s prior range of $46 million to $54 million amid lower contribution from its recently divested Marucci Sports unit and margin compression across key operating segments.

Operational execution faced notable headwinds during the quarter, highlighted by supply chain interruptions and elevated operating costs within the Powered Vehicles Group, alongside upfit business challenges in the Aftermarket Applications Group and persistent soft bicycle product demand. Management subsequently revised its full-year fiscal 2026 sales guidance downward to $1.35 billion to $1.38 billion from a previous $1.42 billion to $1.47 billion, trailing Wall Street consensus estimates of $1.44 billion.

Full-year adjusted EBITDA expectations were similarly lowered to $140 million to $150 million, or $154 million to $164 million including tariff refunds, compared with earlier projections of $176 million to $196 million. Against that backdrop, fourth-quarter revenue guidance of $287 million to $313 million sits below analyst projections of $367.56 million, reflecting the September 25 completion of the Marucci Sports divestiture, lower chassis availability, and ongoing cost inflation across raw materials like steel and aluminum.

To oversee the transition, the board initiated a permanent chief executive search with executive firm Heidrick & Struggles, while Mr. Grimm steps in with over four decades of industrial and automotive sector experience. Supported by Chief Financial Officer Dennis Schemm, the interim leadership team plans to prioritize margin optimization, free cash flow generation, and disciplined capital return while navigating broader macroeconomic uncertainty.

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