Fox Factory's board replaces CEO Mike Dennison and cuts its 2026 outlook after a weak quarter

Fox Factory said Friday that its board had replaced chief executive Mike Dennison with director Doug Grimm on an interim basis, as the maker of FOX suspension parts said third-quarter sales fell short of its own forecast and cut its full-year sales and profit outlook.

An interim chief from the boardroom

Fox Factory Holding Corp.'s board appointed independent director Doug Grimm as interim chief executive effective Oct. 16, and Mike Dennison stepped down as CEO and as a director, the maker of FOX suspension parts said Friday. The board has hired Heidrick & Struggles to find a permanent chief, and Grimm is not a candidate for the job.

The company did not give a reason for the change beyond saying the board "has decided to make a leadership change." Dennison had led the company since 2019. A Form 8-K filed with the Securities and Exchange Commission says the board approved the transition on Oct. 15, that Dennison remains an employee while the two sides negotiate a transition agreement, and that no terms have been approved.

Grimm, 64, joined the board in March. He was president and chief operating officer of Metaldyne Performance Group, an automotive metals supplier, from 2015 to 2017, and he chairs the board of Blue Bird Corp. His interim contract pays a base salary of $1,065,000 a year and includes a restricted stock unit award valued at $2 million at target, plus a $600,000 completion bonus if he serves at least six months or until a permanent CEO is named, whichever comes first, according to the filing.

A third quarter well below plan

Fox Factory expects sales of $336 million to $340 million for the third quarter ended Oct. 2, short of the $355 million to $380 million it had guided to. Adjusted earnings before interest, taxes, depreciation and amortization are expected at $38 million to $42 million, excluding about $12 million of tariff refunds, against guidance of $46 million to $54 million.

The company blamed Marucci Sports, a unit it sold in September, which fell short of expectations before the sale closed. It also cited a supply disruption and higher operating costs in its Powered Vehicles Group, operating problems in the upfit business of its Aftermarket Applications Group and, to a lesser extent, softer bike sales. Stripping out Marucci, third-quarter sales of $303 million to $307 million compare with $327 million a year earlier, according to the company's table.

A lower bar for 2026

Fox Factory now expects full-year sales of $1.35 billion to $1.38 billion, down from $1.42 billion to $1.47 billion. It attributed about $63 million of the reduction to Marucci. The cut leaves the forecast below the $1.44 billion analysts had expected, Investing.com reported.

The profit outlook fell further. Adjusted EBITDA is now expected at $140 million to $150 million, excluding about $14 million of tariff refunds received in the second and third quarters, compared with $176 million to $196 million before. For the fourth quarter, the company expects sales of $287 million to $313 million and adjusted EBITDA of $23 million to $29 million, citing continued supply problems, steel, aluminum and freight inflation, and lower chassis availability.

Life after Marucci

Fox Factory closed the Marucci sale on Sept. 25 to a buyer group led by Marucci's own management, for an enterprise value of $225 million: $200 million in cash, used entirely to pay down debt, and a $25 million note due by Dec. 31. The company said the sale cut its net leverage to about 2.7 times from 3.7 times on a pro forma basis. "It did not deliver the returns we expected inside Fox," Dennison said at the time.

How the stock traded

Fox Factory shares fell 13.3% on Friday to close at $16.04 on the Nasdaq, their lowest close since April, according to market data. About 2.7 million shares changed hands, more than four times Thursday's volume. The company will report full third-quarter results on a Nov. 5 conference call.