Dorman Products (DORM) Q1 2026 earnings summary

Executive summary

• Net sales for Q1 2026 reached $529 million, up 4.2% year-over-year, driven by pricing actions but partially offset by lower volumes and peak tariff-related costs.

• Adjusted diluted EPS was $1.57, down 22%–22.3% year-over-year, primarily due to higher tariff costs and margin pressures.

• Cash from operations totaled $44 million, with $51 million used for share repurchases in Q1.

• Management reaffirmed full-year 2026 guidance, expecting 7%–9% net sales growth and adjusted EPS of $8.10–$8.50.

• Continued innovation and commercialization initiatives are supporting growth across all segments.

Financial highlights

• Net sales increased 4.2% year-over-year to $529 million, with two-year growth at 18%.

• Adjusted operating margin was 12.1%, down 490 basis points year-over-year; adjusted EBITDA margin was 15.2%, down 440 basis points.

• Gross margin declined to 36.0% from 40.9% year-over-year due to tariffs.

• Free cash flow for the quarter was $35 million, with significant year-over-year inventory reduction.

• Net income for Q1 2026 was $43.6 million, down from $57.5 million in Q1 2025.

Outlook and guidance

• Net sales growth for 2026 expected in the 7%–9% range, with all segments performing within this range.

• Adjusted operating margin guidance for 2026 is 15%–16%, with exit rate in the high teens.

• Adjusted diluted EPS for 2026 projected at $8.10–$8.50.

• Guidance includes current tariffs but excludes potential IEEPA tariff refunds, future tariff changes, acquisitions, divestitures, and additional share repurchases.

• Full-year tax rate expected at approximately 23.5%.