According to the filed complaint, defendants made misleading statements and omissions regarding the Company’s business, financial condition, and prospects, particularly with regard to demand for Fox Factory’s products and inventory levels. Specifically, the complaint alleges that on November 2, 2023, after the markets closed, Fox Factory filed a Form 8-K with the SEC, reporting that its net sales for the third quarter of fiscal year 2023 decreased 19.1% year-over-year due to "higher levels of inventory across various channels." In addition, Fox Factory cut its full-year sales guidance from between $1.67B and $1.70B to between $1.45B and $1.47B, citing continued inventory destocking in its Specialty Sports Group segment. On this news, the price of Fox Factory's common stock declined $22.60, or 37.34%, to close at $60.53 per share on November 3, 2023.