Dorman Products ((DORM)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The latest earnings call from Dorman Products painted a picture of robust business performance, particularly in the light-duty segment. The company reported substantial revenue growth and margin expansion, leading to a significant increase in earnings per share (EPS) and positive guidance for the full year. However, challenges such as tariff impacts and underperformance in the specialty vehicle and heavy-duty segments were also acknowledged.
Strong Revenue Growth
Dorman Products reported an impressive 8% year-over-year growth in consolidated net sales for the second quarter, reaching $541 million. This growth was primarily driven by strong volume increases due to heightened customer demand, especially within the light-duty business.
Margin Expansion
The company achieved a 16.3% adjusted operating margin for Q2 2025, marking a 70 basis point improvement over the previous year’s second quarter. The light-duty business was a key contributor to this margin expansion.
EPS Increase
The combination of net sales growth and margin expansion resulted in a 23% year-over-year increase in adjusted diluted EPS, which stood at $2.06 for the quarter.
Positive Guidance Update
Dorman Products updated its full-year 2025 guidance, now expecting net sales growth in the range of 7% to 9%, up from the previous estimate of 3% to 5%.
Light Duty Business Performance
The light-duty business saw a 10% year-over-year increase in net sales during Q2, driven by strong customer demand and successful new product launches.
Impact of Tariffs
Higher tariff costs and additional inventory investments impacted operating cash flow, which was only $9 million compared to $63 million in Q2 2024.
Specialty Vehicle Business Decline
Net sales in the specialty vehicle segment declined by 3% compared to last year’s second quarter, attributed to weakened consumer sentiment and economic uncertainty.
Heavy Duty Segment Challenges
The heavy-duty segment faced challenges, with operating margin slightly positive at 80 basis points, a decline from the previous year due to lower volumes from the trucking and freight recession.
Forward-Looking Guidance
Dorman Products provided updated guidance for the full year 2025, highlighting an expected net sales growth of 7-9% and adjusted diluted EPS between $8.60 and $8.90. The company anticipates positive impacts from pricing adjustments due to tariffs, with significant effects expected in Q3 2025. Despite challenges, Dorman remains committed to supply chain diversification, productivity initiatives, and new product launches to sustain growth and margin expansion.
In conclusion, Dorman Products’ earnings call reflected a strong overall business performance, with significant growth in the light-duty segment and positive forward-looking guidance. While challenges remain in certain segments and due to tariffs, the company’s strategic initiatives aim to support continued growth and profitability.