DULUTH, Ga. (BRAIN) — Sales in Fox Factory’s Speciality Sports Group, which includes is bicycle-product business, were down 8.7% in the first quarter from the same period in 2025.
The company said the decline in SSG sales ”reflects distributor and dealer inventory destocking and a difficult prior-year comparison given the industry’s first half 2025 order pull-forward.partially offset by a $10.5 million or 8.7% decrease in Specialty Sports Group (“SSG”) net sales.
The SSG division includes Fox's bicycle business through the Fox, Marzocchi, Ride Concepts, RaceFace, Easton cycling and Lizardskins brands. SSG also includes Fox's Marucci business, which sells baseball and softball gear.
Company-wide, Fox’s first quarter sales were up 3.9% in the quarter, to $368.7 million. It recorded a net loss for the quarter of $15 million, an improvement on its first quarter 2025, when it lost $259.7 million. Company-wide gross margin was 28.9%, compared to 30.9% in the first quarter of fiscal 2025. The company said the decrease "was primarily driven by the net impact of tariffs and shifts in our product line mix."
In a call with analysts Thursday, Fox CEO Mike Dennison said, “We knew Q1 would be a tough column for SSG, particularly in bike, given the strength we saw in the first half of the prior year, as the industry pulled forward orders in 2025.
"The bike environment feels much like last year. Channel inventory has improved, but remains volatile. And demand signals remain muted as consumers are cautious.
“The good news is that we continue to make progress on new customer relationships and product expansion, particularly in categories like e-bikes, where we see long-term opportunity.
“The changing landscape in OEMs, who are winning and losing, is both a challenge and an opportunity for Fox,” Dennison said.
New players create disruption and opportunities
In response to an analyst's question, Dennison expanded on his comments about new OEM customers in the bike market.
"There's a lot of volatility," he said. "A lot of the players in the space are down, down significantly. We're forecasting stable to slightly up, which is a reflection of really two things ... One is product diversification, so we continue to expand our portfolio to make sure we're getting on as many products that meet our premium category at the different levels between e-bike and normal mountain bikes."
The second thing, he said, was the development of new customers. "We have a fairly significant rotation of new players versus our traditional players. So it's showing you that there's disruption happening in that industry and we're benefiting from our relationship with those new players and the new products that they're creating," he said.
Dennison also mentioned that the Middle East war has disrupted some of its SSG suppliers and customers, without sharing specifics. He said the impact of those disruptions will be seen in the second-quarter financial report.
In a statement, Fox said there is “potential” that it will recover tariff costs paid under the International Emergency Economic Powers Act (IEEPA). But it said there is still uncertainty about the timing and size of any recovery so the company is not including the potential recovery in its forecasts.
