Fox Factory shares tumble following CEO departure and outlook reduction

Fox Factory Holding Corp (NASDAQ:FOXF) saw its shares plummet 9.5% in Friday trading as the company underwent a significant executive restructuring and revised its financial outlook. CEO Mike Dennison departed, and interim CEO Douglas Grimm was appointed to lead the specialty components manufacturer. The shift came amid disappointing third-quarter results, with net sales projected at $336 million to $340 million, falling short of the initially expected $355 million to $380 million.

Adjusted EBITDA for the period was also revised downward to $38 million to $42 million, excluding $12 million in tariff refunds, below the previous range of $46 million to $54 million. The company cited lower contribution from its Marucci Sports unit and margin compression across key operating segments as factors behind the shortfall.

Additionally, operational challenges, such as supply chain disruptions, elevated operating costs, and weak demand for bicycles, weighed on performance. Fox Factory subsequently lowered its full-year sales guidance for fiscal 2026 to $1.35 billion to $1.38 billion from the prior range of $1.42 billion to $1.47 billion, which was below analysts' consensus estimate of $1.44 billion.

Adjusted EBITDA expectations were also revised downward to $140 million to $150 million, or $154 million to $164 million including tariff refunds, from earlier projections of $176 million to $196 million. The board initiated a permanent CEO search with Heidrick & Struggles, and Grimm, with four decades of experience in the industrial and automotive sectors, would oversee the transition.