Dorman Products (DORM) Q2 2026 earnings summary

Executive summary

• Q2 2026 net sales reached $545 million, up 0.7% year-over-year, with record earnings and robust cash flow generation, driven by IEEPA tariff refunds and operational improvements.

• Adjusted diluted EPS rose 50% to $3.08, with $1.18 from a one-time tariff refund; comparable EPS was $1.90.

• Net income for Q2 2026 was $87.8 million, a 49.6% increase year-over-year, primarily due to $98.1 million in tariff refunds and related interest income.

• Updated 2026 guidance: net sales growth of 3%-5% and adjusted diluted EPS of $8.50-$8.80, reflecting lower tariffs and pricing actions.

• Tariff environment stabilized, enabling targeted price reductions and improved certainty for future planning.

Financial highlights

• Adjusted gross margin was 46.1%, up from 40.6% year-over-year; excluding refund, gross margin was 38%.

• Adjusted operating margin was 22.3% (up 600 bps); excluding refund, margin was 14.2%.

• Operating cash flow was $153 million; free cash flow $144 million, with $62 million excluding the refund.

• $47 million in share repurchases executed in Q2 2026; $363 million remains authorized.

• $450 million in senior notes issued and used to refinance existing debt, expanding liquidity.

Outlook and guidance

• Full-year 2026 net sales growth expected at 3%-5%, down from prior 7%-9% due to pricing reductions.

• Adjusted diluted EPS guidance raised to $8.50-$8.80, primarily from the one-time refund; comparable EPS $8.20-$8.50.

• Guidance excludes impacts from future tariff changes, acquisitions, divestitures, and additional share repurchases.

• Full-year adjusted operating margin targeted at 15.5%-16.5%; gross margin expected to exit 2026 at ~40%.

• Tax rate estimate remains at 23.5%.