Dorman Products was a top contributor in the SouthernSun Small Cap Strategy during the second quarter of 2026, as its share price recovered on investor recognition that first-quarter margin compression from tariffs was temporary. The company reported first-quarter net sales of $528.8 million, up 4.2% year-over-year, with adjusted diluted earnings per share of $1.57, down 22% due to tariff-related costs peaking during the quarter. Gross margin declined to 36.0% from 40.9% a year earlier, with management estimating tariff headwinds at approximately $1.25 per share on an annualized basis. Management reaffirmed full-year 2026 guidance for net sales growth of 7% to 9% and adjusted diluted earnings per share of $8.10 to $8.50, citing confidence across all three segments and consistently mid-single-digit positive point-of-sale trends. SouthernSun believes the core Light Duty franchise benefits from a compelling new product pipeline, ongoing innovation, and the long-term tailwind of an aging vehicle fleet.
Dorman Products IncMarket views tariff compression as temporary; management reaffirmed guidance and expects recovery.