Motorcar Parts of America (MPAA) Q2 2027 earnings summary

Executive summary

• Q2 FY2027 sales fell 18.1% YoY to $169.2M amid delayed orders, softer DIY demand, lower tariff pass-throughs and customer inventory realignment; management expects H2 sales to rise YoY.

• Nearly $60M of firm annualized awards have begun shipping, with most launches expected later in FY2027; a separate ~$25M opportunity remains in advanced discussions.

• FY2027 sales guidance was cut to $715M–$740M; growth opportunities include brakes, Centric Parts, diagnostic equipment, customer expansion in Mexico and Canada, and the relocated Mexico operation.

Financial highlights

• Q2 operating income was $10.0M versus $16.4M; net income was $1.4M versus a $2.1M loss. H1 sales were $337.2M, operating income $13.5M, and net loss $12.1M.

• Q2 gross profit was $40.9M versus $42.7M; gross margin rose to 24.2% from 19.3%, including an $11.1M IEEPA tariff refund and partly offset by $1.4M of Mexico relocation transition costs.

• Q2 margin included 2.8 percentage points of non-cash expenses and 5.7 points of net one-time benefits; excluding non-cash and one-time items and ~1.4 points of unfavorable FX, margin was ~22.7%.

• H1 gross margin was 20.2% versus 18.7%; H1 operating cash flow was negative $15.4M, including working-capital effects from lower payables and higher inventory.

Outlook and guidance

• FY2027 net sales guidance was reduced to $715M–$740M from $780M–$800M; operating income is expected at $37M–$44M.

• FY2027 operating-income guidance includes ~$30M of non-cash expenses and ~$5M of heavy-duty relocation costs, and excludes the ~$11M of Q2 IEEPA tariff refunds; D&A is estimated at ~$9M.

• H2 sales guidance is $378M–$403M; excluding $19.9M of prior-year core revenue from customer inventory realignment, projected growth is 5.0%–11.9%. H2 operating income is expected at $23M–$30M.

• Guidance assumes existing-business recovery and new-program launches, but not significant industry catch-up; October sales and orders improved from late Q2.