Key Points – Holley’s Q1 sales fell 3.7% to $147.3 million as elevated distributor inventories and severe winter weather delayed demand, but management said order trends improved late in the quarter and into Q2.
April revenue was already growing in the mid-single-digit range, suggesting a recovery is underway. – Profitability held up despite weaker sales, with net income rising to $7.3 million from $2.8 million and adjusted EBITDA essentially flat at $27.3 million
The company also delivered $6.5 million in cost savings, helping offset gross margin pressure from lower volume. – Holley is reshaping its portfolio and acquisitions strategy by exiting five brands, consolidating facilities and completing the HRX acquisition in premium racing safety gear. The company kept adjusted EBITDA guidance unchanged, while trimming full-year sales guidance to reflect portfolio actions and expecting leverage to improve below 3.5x by year-end. Holley (NYSE:HLLY) reported lower first-quarter 2026 sales as elevated distributor inventories and severe winter weather weighed on early-quarter demand, but executives said order trends improved late in the period and into the second quarter.
President and Chief Executive Officer Matthew Stevenson said the quarter began with “a couple of temporary headwinds,” including elevated distributor inventories after partners worked toward year-end rebate targets and stocked up ahead of a Jan. 1 price increase. He said the company expected inventories to normalize in January and February, but severe winter weather slowed retail activity and delayed the process. “Beginning in week eight, as weather conditions improved and channel dynamics normalized, we saw steady improvement in purchasing patterns,” Stevenson said. He added that Holley exited the quarter with momentum and that early second-quarter trends were encouraging, with healthier channel inventories and improving order activity.