DORM · Dorman Products, Inc.

Dorman Products reported first quarter fiscal 2026 results that met expectations, with net sales rising 4.2% to $528.8 million, driven by 4% growth in Light Duty and 12% growth in Heavy Duty segments, while Specialty Vehicle sales were flat. However, profitability was significantly impacted by higher costs from tariffs implemented in 2025. Gross margin contracted 490 basis points to 36.0%, and operating margin fell from 15.8% to 11.1%. Diluted EPS declined 24% to $1.43, and adjusted diluted EPS fell 22% to $1.57. Management attributed the margin compression to tariff headwinds, which were anticipated. Despite the earnings decline, the company generated $43.8 million in operating cash flow and returned $51 million to shareholders via share repurchases at an average price of $118 per share. The company reaffirmed its full-year 2026 guidance, expecting net sales growth of 7-9%, GAAP diluted EPS of $7.57-$7.97, and adjusted diluted EPS of $8.10-$8.50, which implies a decline of 9% to 4% year-over-year. The guidance incorporates the impact of tariffs enacted as of May 4, 2026, but excludes potential tariff refunds, future acquisitions, and additional buybacks. The Light Duty segment's profit margin fell sharply from 19.9% to 14.1%, while Heavy Duty improved to 0.8% from -0.3%. Management expressed confidence in the company's strategy and long-term growth prospects despite ongoing economic and geopolitical uncertainty.