HLLY · Holley Inc.

Holley Inc. announced first quarter 2026 results showing resilient profitability despite a 3.7% decline in net sales to $147.3 million from $153.0 million year-over-year, primarily due to elevated distributor inventory levels entering the quarter and severe winter weather disrupting retail activity in late January and early February. From week eight onward, purchasing patterns improved, enabling momentum into Q2 with healthier inventory and order activity. Gross profit decreased 5.2% to $60.7 million, but operating expenses fell 3.4% to $43.2 million, driven by $1.3 million lower SG&A, reflecting $6.5 million in cost savings from purchasing, tariffs, and operations. This supported operating income of $17.5 million and a sharp 45.8% drop in non-operating expenses to $8.4 million, mainly from 36.9% lower interest expense, yielding net income of $7.3 million, up significantly from $2.8 million last year. Adjusted EBITDA held flat at $27.3 million with margin expansion to 18.5%, underscoring disciplined cost control and proactive tariff management. CEO Matthew Stevenson highlighted growth in three of four divisions, portfolio simplification, and the HRX acquisition reengaging M&A to strengthen Safety and Racing in Europe. CFO Jesse Weaver noted portfolio optimization exiting non-core businesses, reducing full-year sales guidance by $15 million to $610-$640 million but maintaining Adjusted EBITDA at $127-$137 million, with expected SKU reductions over 11,000, >$15 million cash generation, and slightly positive EBITDA impact. Free cash flow improved $4.5 million to $(6.3) million, aided by better operating cash use of $(2.9) million.