Fox Factory Holding Corp

ITEM 1A. RISK FACTORS

Our efforts to increase profitabilityU.S. policies related to global trade and tariffs could have a material adverse effect on our results of operations.

The current domestic and optimize costsinternational political environment, including, amo existing other possible initiatives, current or and potential changes to U.S. policies related to global trade and tariffs, have resulted in uncertainty surrounding the future strategic transactions involving one or more of the global economy. In 2018, the U.S. imposed tariffs of 25% on steel and 10% on aluminum, with only a handful of our businessesmay not be successful or could be significantly delayed, which may materiallcountries exempt from the increase. The new Trump administration enhanced these measures beginning in 2025 by impact our operatncreasing results, financialthe tariffs on aluminum and steel to 50% for all condition, liquidity, untries except the United Kingdom, expand margins.

Due to challenges in the OEM market and broaing the products on which the tariffs will be assessed to include der marketivative products conditions impacting discretionary ctaining steel or aluminum, and terminating all countrywide exemptionsumer and the product spending, we implemented (and are continuing to implement) certain immediate cific exemption process. There is an inclusion process through which domestic industry can request the U.S. include new derivative steel and longer-term actionsaluminum products that will be subject to strengthen our business, includthe increased tariffs.

Since taking aggressive cost managoffice, the new Trump administration implement anded various new strategic operational improvements.es regarding tariffs. President Trump invoked the In February 2026, we established the Transformatiternational Emergency Economic Powers Act (IEEPA) to impose 25% tariffs on Committee,products from Mexico an advisory committee of the Board of Directors, to assist with efford 25% tariffs on products from Canada (with a lower 10% tariff on Canadian energy and energy resources) but exempted from the tariffs those products with respectthat are entitled to profitability, cost-cutting and margin improveeferential treatment under the United States-Mexico-Canada Agreement. We President Trump also developimposed a plan to adjust our business structure to operate efficiently i20% tariff on all imports from China and Hong Kong under the International Emergency Economic Powers Act. Acting on a number of demand environments intendn investigation concluded during the first Trump administration, the current Trump administration-imposed to protect marginariffs of 25% on certain passenger vehicles and drive free cash flow to reduce lelight trucks and parts for those vehicles.

In April 2024, the Trump administration imposed a univerage and strengthen our balance sheet. However, sal reciprocal tariff of at least 10% on all countries and higher rates for certain countries, which took effect on August 1, 2025. On February 20, 2026, the U.S. Supreme Cour strategy to increase profitability and optimize costs relies on a number of ft issued a decision finding that IEEPA does not authorize the President to impose tariffs. The Company continues to evaluate the potential ramifications of the U.S. Supreme Courts ruling and any impactors, some of which are outside of our controls on the Company from that ruling, including refunds from the government, and may disany contract management, slow improvements to our products and services, and hinderual obligations arising from such refunds. Responding to that ruling, President Trump rescinded the tariff actions based on IEEPA and signed a new producclamation capability in certain situatimposing, effective February 24, 2026, a 10% global tariff (to be increased to 15%) under Section 122 of the Trade Act of 1974 (Sections. If the Company enters into 122). The tariff expired on July 28, 2026. However, the Trump administration any strategic transactions involvnounced on July 27, 2026, new tariffs ranging from 10% to 12.5% for over 60 countries, citing one or more of our businesses in connection with these efforts, we that the tariffs target countries with forced labor practices. Some countries hit by the new tariffs have objected to unfounded labor claims and the enforceability of the tariffs is still to be determined.

The tariff actions by the U.S. may not achieve the expected benefits. We cannot provideresult in a decrease of global trade volumes due to uncertainty, may create an administrative burden any assurance that our strategicd will cause retailers to make difficult decisions as to how to pay the tariff or absorb the cost initiatives will be successful, and we may not achieve measures to increasto their profit margins.

While we have exposure to implemented tariffs at this time, in regard to our supply chain and end-user demand, any expansion in the types of tariffs implemented has the profitability or optimizeotential to negatively impact our supply chain costs on our anticipated timeline, or at all. Failure to achieve our cost optimizaand the operating performance of our customers, which in turn may negatively affect our sales, gross margin, and operating performance. Additionally, there is a risk that continued U.S. tariffs on imports could be met with addition targeal retaliatory tariffs on U.S.-produced exports or increase our profitability couland that the broader trade uncertainty could intensify. This has the potential to significantly impact global trade and economic conditions in many of the regions where we do business and have a material adverse effect on our results of operations, liquidity and financial cond.

In addition.

Our optimization initiative, with respect to sourcing products and strategic review of our portfolio of businesses could disrupt the Companys ongoing businraw materials from third-party suppliers in other countries, our ability to timely or success, present risks not currently contemplated, andfully import such products or those made with such raw materially s may be adversely affect our business, reputation, results of operaed by changes in U.S. laws. As a result, products we import into the U.S. could be held for inspections by U.S. Customs and financial condBorder Patrol (U.S. CBP) based on a suspicion of noncompliance. Addition.

As part of our effortally, the Uyghur Forced Labor Prevention Act (UFLPA) empowers to streamline our business and sharpen our focus he U.S. CBP to withhold release of items produced in whole or in part in countries or by companies included on core operathe UFLPA entities list, creating a presumptions, we a that such goods were reviewiproduced using aspectsforced labor. In January 2025, the Department of our business and considerHomeland Security added to the UFLPA entity list, marking potential trthe largest single expansactions involv of the list to date, and including one or mora large supplier of critical minerals and one of our businesses. We have taken and may continue to take certain strategic actionthe worlds largest textile manufacturers, both linked to forced labor practices in the Peoples Republic of China. Although we do not believe that our suppliers source materials from entities in connecticluded on with thisthe UFLPA for the processducts that may result in divestitures, saley sell to us or use to manufacture our products and we could be subject to penalties, disposifines or sanctions or related transactionsif any of the suppliers from which we purchase goods is found to have dealings, directly or involvingdirectly, with entities one or more of our businesses or the ULFPA entities list. We are committed to complying with the UFLPA and have taken significant steps to assets. These inss and mitiatives aregate risks within our subject to uncertainty,pply chain. Given the complexity and no such actions may ultimately be pursued.multi-tiered nature of global supply chains, achieving full

403

Our atraceability to identify for every supplier and capitalize on opportunities or strategic transactions that would sub-supplier presents substantial challenges. However, we are continuously working to enhance our due diligence produce favoracesses, leveraging available results depend on a range of factors, which include, among others, market conditions, our ability to successfully marketdata and supplier engagement to ensure compliance to the fullest extent possible.

Recently, in September 2025, the U.S. CBP issued a Withhold Release Order against bicycles, bicycle parts, and execute potential transaccessories manufactions, third-party interest, valuation considerured in Taiwan by Giant Manufacturing Co. Ltd., based on informations and regulatory requirements. In addition,  of possible forced labor use. The similarity in product offerings and our optimization initiatives companys products being associated with Giant Manufacturing Co. Ltd. may be complex, require management attention,subject our Taiwan-based or other operations to increased scrutiny and review, which could result in compliance and reporting costs and hinder or disruptelay the importations to and delivery of our business even if no transproducts manufactured in Taiwan. With the majority of our manufactions are completed. If we are unsuccessful in implementing, or choose not to take, actionsuring operations for our bike products occurring in Taiwan, any adverse order issued by the U.S. CBP on our company or other initiatives rmanufacturers of bicycles, bicycle parts, and related to our ongoing strategic review, accessories could negatively affect our business, reputafinancial condition, r or results of operations and financial condition could be materially and adverse.

Except as noted in this Item 1A and as previously disclosed in Part II, Item 1A of our Quarterly impacted.

Except as noted in this Item 1A, Report on Form 10-Q for the quarter ended April 3, 2026, there have been no material changes to the risk factors described in our Form 10-K for the 2025 fiscal year ended January 2, 2026.