Holley Q2 Earnings Call Highlights

Holley NYSE: HLLY reported second-quarter 2026 net sales growth as three of its four operating divisions posted double-digit core sales gains, while the company continued divesting non-core assets, reducing debt and investing in marketing and product launches.

Net sales increased 3.2% year over year to $172 million. On a core-business basis, excluding portfolio rebalancing and divestiture effects, sales grew 4.9%. Chief Executive Officer Matthew Stevenson said the company’s first-quarter headwinds—including elevated distributor inventories and an unfavorable start to the spring season—eased during the second quarter.

“Three of our four divisions delivered double-digit core sales growth year-over-year,” Stevenson said, adding that the result reflected the breadth of Holley’s portfolio and execution against its strategic priorities.

Modern Truck & Off-Road was Holley’s fastest-growing operating division during the quarter, with net sales rising 15.7%, accelerating from 3.8% growth in the first quarter. The company attributed the performance to consumer demand and new-product introductions across retail and enthusiast channels. Euro & Import sales increased 13.1%, compared with 1% growth in the first quarter. Holley said prior supply constraints had been resolved, enabling the division to better meet demand in the European enthusiast vehicle market. Safety & Racing sales rose 13.8%, building on 10.2% growth in the first quarter. Growth was supported by new products from the Stilo and Simpson brands, demand connected to the Snell SA2025 helmet certification cycle, and momentum in motorcycle safety products.

American Performance, the company’s largest business, reported a 2.1% sales decline. That was an improvement from a 9.7% decline in the first quarter. Stevenson said channel inventory levels have normalized, while the company also shifted certain product categories from its second-quarter marketing calendar to the second half of the year. Holley expects the division to improve through the balance of 2026, supported by retailer placements and expanded marketing activity.

Gross profit was $70.5 million, compared with $69.6 million a year earlier, while gross margin fell 72 basis points to 41%. Adjusted EBITDA declined to $33.8 million from $36.4 million, and adjusted EBITDA margin fell to 19.6% from 21.9%. Chief Financial Officer Jesse Weaver said the year-over-year margin comparisons were affected by tariff-related costs and a one-time, non-cash benefit in the prior-year quarter from capitalizing tariff costs into inventory. During the question-and-answer session, Weaver said that benefit was approximately $3 million to $...