Dorman earnings fell in the third quarter of 2026 despite higher sales, as the motor-vehicle aftermarket supplier faced a tougher comparison with last year’s tariff-related pricing benefits. Results released on October 26 showed diluted earnings per share declining 20% to $1.98, while net sales rose 3.3% to $561.7 million. The company also lowered its full-year sales-growth outlook and narrowed its earnings guidance.

Key Takeaways

  • Sales increased across all three business segments, but quarterly gross margin fell.
  • Management attributed the earnings comparison to tariff-related pricing that benefited the third quarter of 2025.
  • The revised outlook assumes additional fourth-quarter pricing actions and excludes potential tariff changes after October 26.

Dorman earnings decline as gross margin contracts

For the quarter ended September 26, 2026, sales increased from $543.7 million a year earlier. Gross profit nevertheless fell to $221.6 million from $241.4 million, with gross margin narrowing to 39.4% from 44.4%. Higher revenue therefore did not translate into higher profitability.

Adjusted diluted EPS, a non-GAAP measure, fell 21% to $2.08 from $2.62. Reported diluted EPS declined from $2.48 to $1.98.

Chairman, President and Chief Executive Officer Kevin Olsen said the year-over-year earnings comparison reflected the timing of tariff-related pricing that benefited the third quarter of 2025. He attributed sales growth across the three segments to new products and business wins.

ItemDetails
2026 net sales growth versus 2025Updated: 2%–3%; prior: 3%–5%.
2026 diluted EPSUpdated: $7.95–$8.15; prior: $7.93–$8.23.
2026 adjusted diluted EPSUpdated: $8.50–$8.70; prior: $8.50–$8.80.
2026 estimated tax rateUpdated: 23.5%–24.0%; prior: 23.5%.

Segment profitability diverges as buybacks reach a record

Light Duty, the largest segment, recorded sales of $443.7 million, up 3%, while its segment profit margin fell to 18.5% from 23.7%. Heavy Duty sales rose 5% to $66.1 million, but its segment profit margin declined to 0.0% from 4.5%.

Specialty Vehicle was the exception on profitability: sales increased 3% to $51.9 million and its segment profit margin improved to 13.1% from 12.8%.

Dorman generated $64.6 million in operating cash flow and repurchased $15 million of shares during the quarter. Year-to-date repurchases reached $112 million, which Olsen described as a company record.

Lower sales-growth outlook accompanies narrower EPS ranges

Dorman reduced its expected 2026 sales-growth range, while narrowing both reported and adjusted EPS guidance. The reported EPS range moved inward at both ends; the adjusted range retained its lower bound but has a lower upper limit.

Olsen said the revised outlook reflected performance through the first nine months and additional pricing actions the company expects to take in the fourth quarter. Those actions remain planned rather than completed.

The guidance includes the expected effects of tariffs enacted as of October 26, 2026. It excludes potential subsequent tariff changes, future acquisitions and divestitures, and additional share repurchases.

Dorman’s scheduled third-quarter results call is set for October 27, 2026, at 8:00 a.m. Eastern Time, with a live webcast and accompanying presentation materials available through its investor-relations website.

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