FOX FACTORY HOLDING CORP

Our recent Marucci Divestiture may not achieve its expected benefits and could adversely affect our business, financial condition, and results of operations.

The Marucci Divestiture has streamlined our business and increased our focus on our core products and end markets. Consequently, our success is now highly dependent on the performance of our remaining operations, leaving us more exposed to downturns in specific products, customers, industries, and market cycles. Adverse developments affecting these core businesses, such as shifts in customer demand, increased competition, supply chain disruptions, or broader economic volatility, may have a disproportionately greater impact on our financial performance than they would have prior to the Marucci Divestiture. In addition, the Marucci business contributed revenue, earnings and cash flow prior to the divestiture, and there can be no assurance that our remaining operations will generate comparable levels of revenue, profitability or cash flow or that we will successfully redeploy the proceeds from the divestiture in a manner that offsets the loss of such contributions. As a result, the Marucci Divestiture may be dilutive to our earnings, cash flow and financial performance, particularly in the near term. Furthermore, we may fail to realize the anticipated strategic, operational, or financial benefits of the divestiture.

Additionally, our ability to realize the full value of the Marucci Divestiture depends partially on the purchaser’s ability to satisfy its long-term obligations under the promissory note received as part of the sale price. If the purchaser defaults or its creditworthiness is impaired, we may not receive the full expected proceeds. We also remain subject to residual risks from the Marucci Divestiture, including certain retained liabilities, indemnification obligations, post-closing disputes, and purchase price adjustments. The materialization of any of these risks could have a material adverse effect on our financial condition and operational results.

The following risk factor updates and supersedes the risk factor in our most recent Annual Report on Form 10-K titled “Our business depends substantially on our ability to attract and retain experienced and qualified talent, including our senior management team.”

Our recent Chief Executive Officer transition could disrupt our business and result in the loss of other key personnel, which could have a material adverse effect on our business, results of operations and financial condition.

On October 15, 2026, the Company’s Board of Directors (the “Board”) approved a leadership transition plan pursuant to which Michael C. Dennison stepped down from his role as the Company’s Chief Executive Officer and resigned from his role as a member of the Board, effective October 15, 2026. On October 15, 2026, the Board also approved the appointment of Douglas J. Grimm, a member of our Board, as the Interim Chief Executive Officer of the Company, effective October 16, 2026, while the Board searches for a permanent successor. We have incurred, and expect to continue to incur, costs in connection with this transition, including compensation payable to our Interim Chief Executive Officer, executive search costs and payments under the Retirement and Transition Agreement with Mr. Dennison (described in Part II, Item 5 of this Quarterly Report on Form 10-Q). Our future success depends on the continued service and performance of our senior management team and other key employees. Many of them have extensive knowledge of our business, systems and processes and could be difficult to replace, given the limited number of direct competitors in our industry. We do not maintain “key person” life insurance on any of them.

Leadership transitions of this nature may disrupt our business by diverting the attention of our Board and senior management from our strategic priorities, including our profit optimization program. They may also create uncertainty among our employees, customers, OEM partners, suppliers and other stakeholders, and operating under an interim Chief Executive Officer may increase these risks. Uncertainty regarding the timing of the appointment of a permanent Chief Executive Officer, and any changes that person may make to our strategy, priorities or management team, could adversely affect our ability to retain or recruit senior management and other key employees. In addition, volatility in our stock price could reduce the retention value of our equity awards. Competition for qualified personnel in our industry is intense, and we may incur increased compensation and retention costs to attract and retain talent. If we are unable to manage this transition effectively, retain members of our senior management team and other key employees, or identify and successfully integrate a permanent Chief Executive Officer, our business, results of operations and financial condition could be materially and adversely affected.

Except as noted in this Item 1A and as previously disclosed in Part II, Item 1A of our Quarterly Reports on Forms 10-Q for the quarters ended April 3, 2026 and July 3, 2026, there have been no material changes to the risk factors described in our Annual Report on Form 10-K for the fiscal year ended January 2, 2026.