Dorman Narrows 2026 Sales Outlook After Margin Reset

The Tip Desk · October 27, 2026 · 3 min read

Third-quarter net sales were $561.7 million as diluted EPS fell 20% to $1.98 and the aftermarket supplier trimmed full-year sales growth to 2%–3%.

Dorman Products (DORM), a leading supplier in the motor vehicle aftermarket industry, reported third-quarter net sales of $561.7 million, up 3.3% from $543.7 million a year earlier, and narrowed its full-year 2026 sales-growth outlook to 2% to 3% from 3% to 5%.

Diluted earnings were $1.98 a share, down 20% from $2.48 a year earlier. Adjusted diluted EPS was $2.08, down 21% from $2.62. Chairman, President and Chief Executive Officer Kevin Olsen said the year-over-year earnings comparison reflected the timing of tariff-related pricing that had benefited the third quarter of 2025.

Gross profit was $221.6 million, or 39.4% of net sales, compared with $241.4 million, or 44.4%, in the year-ago quarter. Adjusted gross profit was $221.2 million, or 39.4% of sales. Sequential gross margin compressed to 39.4% from 46.1% in the second quarter, when the company said earnings and cash from operations benefited from IEEPA tariff cost recovery.

Selling, general and administrative expenses were $138.7 million, or 24.7% of net sales. Adjusted SG&A was $132.4 million, or 23.6% of sales. Income from operations was $82.9 million. Net income was $59.2 million. Weighted average diluted shares outstanding were 29.86 million.

Olsen said top-line growth across each of the three business segments was driven by new products and business wins. Light Duty net sales were $443.7 million, up 3% from $430.3 million a year earlier, with segment profit margin of 18.5% versus 23.7%. Heavy Duty net sales were $66.1 million, up 5% from $63.0 million, with segment profit margin of 0.0% versus 4.5%. Specialty Vehicle net sales were $51.9 million, up 3% from $50.4 million, with segment profit margin of 13.1% versus 12.8%.

The company generated $64.6 million of cash from operating activities and repurchased $15 million of shares, bringing year-to-date buybacks to a company record of $112 million. Cash and cash equivalents were $167.0 million at September 26, 2026. Long-term debt was $440.7 million. Inventories were $787.4 million.

Given performance through the first nine months and additional pricing actions expected in the fourth quarter, Dorman now expects full-year diluted EPS of $7.95 to $8.15, versus prior guidance of $7.93 to $8.23, and adjusted diluted EPS of $8.50 to $8.70, versus $8.50 to $8.80. The tax-rate estimate is 23.5% to 24.0%. Guidance includes the expected impact of tariffs enacted as of October 26, 2026, and excludes potential tariff changes after that date, future acquisitions and divestitures, and additional share repurchases.

Olsen said the company remains confident in its long-term growth strategy, citing its balance sheet, liquidity, innovation engine and diversified supplier network.