10-Q · May 4, 2026
Dorman Products, Inc. reported an increase in revenue for Q1 2026, up 4.2% year-over-year to $528.77 million, surpassing expectations due to tariff-related pricing actions. The diluted EPS of $1.57 exceeded the…
Earnings analysis · 10-Q
DORM earnings analysis
Filed August 4, 2026 · Our reading of the company's report
The latest report
Dorman delivered modest Q2 sales growth of 0.7% to $544.598 million, but earnings and margins improved sharply: gross margin rose 550 basis points to 46.1%, operating margin rose 610 basis points to 21.3%, and GAAP…
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Dorman delivered modest Q2 sales growth of 0.7% to $544.598 million, but earnings and margins improved sharply: gross margin rose 550 basis points to 46.1%, operating margin rose 610 basis points to 21.3%, and GAAP diluted EPS was $2.93. The improvement was heavily supported by $98.1 million in IEEPA tariff refunds, which added 820 basis points to gross margin, while underlying Light Duty volume was weak and Specialty Vehicle revenue declined. Cash generation and liquidity improved materially, although receivables factoring, tariff uncertainty, and elevated international sourcing remain important risks.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $2.93
What stood out
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Revenue returned to modest growth
Q2 net sales rose 0.7% year over year to $544.598 million from $540.959 million. Sequentially, revenue increased 2.9% from $529 million in Q1 2026.
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Sharp margin recovery
Gross margin expanded 550 basis points year over year to 46.1%, and operating margin increased 610 basis points to 21.3%. Sequentially, gross margin rose from 36.0% and operating margin rose from 11.1% in Q1 2026.
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Earnings increased materially
Net income increased 49.5% to $87.771 million from $58.709 million, while diluted EPS was $2.93 versus $1.91 in Q2 2025 and $1.43 in Q1 2026. The filing attributes much of the improvement to $98.1 million of IEEPA tariff refunds.
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Heavy Duty led segment growth
Heavy Duty revenue grew 6.8% to $66.266 million, and segment operating income rose to $2.775 million from $0.522 million. Management cited tariff-related pricing actions and business wins in selected categories and channels.
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Operating cash flow strengthened
Six-month operating cash flow rose to $196.381 million from $59.785 million, helped by $81.5 million of IEEPA refunds and related interest received, plus inventory reductions. Investing cash use was $10.317 million, or 5.3% of operating cash flow.
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Liquidity expanded after refinancing
Cash increased to $131.982 million from $49.436 million at year-end, and working capital increased to $1.122 billion from $1.029 billion. The June refinancing left $798.9 million of revolver availability after letters of credit.
What to watch
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Profitability relies on tariff refunds
Q2 gross-margin expansion was substantially tariff-refund driven: IEEPA refunds added 820 basis points to gross margin, while the company recorded $98.1 million of refunds. Future tariff actions and the refund process remain uncertain.
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Underlying volumes remain pressured
Light Duty sales were essentially flat at $424.320 million versus $424.328 million, as tariff pricing was offset by lower volume and market-based price concessions. Specialty Vehicle sales declined to $54.012 million from $54.571 million amid reduced customer demand.
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High international sourcing exposure
The company sourced approximately 77% of 2025 product-purchase volume outside the U.S., including approximately 38% from third-party suppliers in China. This leaves costs and supply availability exposed to tariff, currency, and trade-policy changes.
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Extended payment terms consume liquidity
Receivables factoring remained significant, with $585.419 million sold in the first six months and $25.175 million of factoring costs. Without these sales, an additional $1.044 billion of receivables would have been outstanding at June 27, 2026.
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Debt and interest-rate exposure persists
Dorman issued $450.0 million of 6.25% senior notes due in 2034 after repaying a $431.3 million term loan balance. A 1-percentage-point increase in rates would reduce the notes' fair value by approximately $27.0 million.
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No formal risk-factor update
There were no material changes to risk factors versus the 2025 Form 10-K. However, management specifically notes that higher tariffs, weaker demand, extended customer payment terms, and higher interest rates could adversely affect liquidity.
Management's outlook
The 10-Q does not provide quantitative full-year sales or EPS guidance; outlook is deferred to other company communications. Management states it anticipates tariff-related incremental liquidity needs can be managed through receivables factoring and its revolving credit facility.
Earlier filings 4
10-K · February 27, 2026
Dorman emphasizes scale and product innovation as its strategic moat — marketing approximately 144,000 distinct parts at year-end 2025 (up from 138,000 at year-end 2024) and introducing 5,560 distinct parts in 2025.…
10-Q · August 5, 2025
Dorman reported Q2 net sales of $540,959,000, up $38,008,000 (+7.6%) year-over-year, with GAAP diluted EPS of $1.91 (vs. $1.53 LY). Gross margin improved to 40.6% and operating income rose to $82,481,000, but operating…
10-Q · May 6, 2025
Dorman reported quarterly revenue of $507.7M and diluted EPS of $1.87, up materially year-over-year with gross margin expanding to 40.9% and operating margin to 15.8%. Light Duty drove the growth while Heavy Duty and…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.