Motorcar Parts Shares Fall Nearly 25% After 2027 Sales Outlook Cut

Key Facts

Motorcar Parts of America shares fell nearly 25% in early trading on November 9, 2026, according to Reuters, after the company cut its net sales forecast for fiscal 2027. The company reported its second-quarter results the same day, for the quarter ended September 30, 2026, and linked the revised outlook to delayed customer orders and the start of shipments for new business. It lowered its projected annual sales range to $715–740 million, from a previous estimate of $780–800 million. The announcement came after the company reaffirmed its previous fiscal-year outlook in August. The cut puts future revenue at the forefront of developments accompanying the share decline, while it could not be verified whether the results missed analysts’ expectations.

Second-quarter net sales were $169.2 million, compared with $221.5 million in the same period a year earlier. The company said the remaining $37.5 million decline mainly reflected delayed customer orders and lower tariff pass-through. Fiscal first-quarter sales were $168.0 million, compared with $188.4 million a year earlier, and the company then attributed the decline mainly to the timing of customer orders. Sales therefore fell in both quarters from the corresponding periods of the prior year, while the annual forecast cut followed its reaffirmation just months earlier. The company expects sales in the second half of the fiscal year to rise from the corresponding period a year earlier as shipments for new business begin.

Operating income fell to $10.0 million in the second quarter, from $16.4 million a year earlier, while the company recorded net income of $1.4 million. However, diluted loss per share was $0.03, while the company reported core net income of $0.07 per share. Gross margin rose to 24.2% from 19.3% in the corresponding period. The company said one-time items provided a net 5.7 percentage-point benefit to margin, including about $11.1 million in refunds of International Emergency Economic Powers Act tariffs. Margin was also affected by noncash expenses equivalent to 2.8 percentage points, meaning the reported increase reflected these items as well as operating results.

For the six months ended September 30, sales were $337.2 million, compared with $409.8 million in the corresponding period a year earlier. The company posted a net loss of $12.1 million in the first half, compared with net income of $893,000 a year earlier. These figures follow the company’s first-quarter results announcement, which said the timing of customer orders was the main factor behind the sales decline, alongside a temporary effect from the liquidation of inventory held by a bankrupt competitor. In its latest announcement, the company said second-quarter results reflected delayed orders and the start of shipments for new business, the two factors that prompted the annual guidance revision. The contrast between the quarterly margin improvement and the first-half declines in sales and net income shows the different paths of the financial metrics over the period.

Chief Executive Selwyn Joffe linked some order delays to customers liquidating inventory they had previously purchased from First Brands. He said the company was beginning to see benefits from the changing competitive landscape and was well positioned to win additional business, including the relaunch of the Centric Parts brand. The company added that it had secured new business awards with an annual value of about $60 million from existing and new customers, and initial shipments had already begun. It expects to launch the remaining awards in the second half of fiscal 2027 and is targeting about $25 million in additional annual awards before the end of the fiscal year. This business and the expected shipments provide part of the company’s explanation for its forecast of higher second-half sales, despite lowering its annual estimate.

Joffe and Chief Financial Officer David ��i were scheduled to discuss the results and operations on an investor call on November 9 at 10:00 a.m. Pacific time. The shares closed at $10.52 on November 6, a price from the session before the results announcement and the November 9 decline. In economic data released before the announcement, U.S. nonfarm payrolls rose by 165,000 jobs in October, and the unemployment rate held roughly steady at 4.1%. The November jobs report was scheduled for release on December 4, 2026. Monitoring execution on new shipments and the timing of customer orders remains part of the picture the company presented to explain its annual forecast cut.