Oct 27, 2026 earnings call — Pricing changes, guidance update and product launches
Record consolidated net sales of $562 million in Q3, up 3% year over year.
Revenue $0.6B (est $0.6B) · EPS $2.08 (est $2.00)
Key quotes
"Keep in mind, we are lapping a tough comparison. Last year's third quarter benefited from the timing of tariff related pricing without the higher tariff related costs as a reminder, we will see this dynamic again in the fourth quarter as well."
"Net sales grew 3% year over year to $444 million driven by our DIFM-focused categories and channels."
"In regards to capital allocation, we deployed $15 million in opportunistic share repurchases that retired 115 thousand shares at an average price of $127 per share."
Analyst Q&A 7
Point-of-sale trends, DIY vs DIFM
Q (Scott Stember · ROTH Capital): Analyst asked if the recent sales softness was only from DIY and whether DIFM trends stayed on a positive path. He also asked how rising diesel and interest rates affect pricing and factoring costs.
A: Management said POS growth aligned with net sales but was down a bit versus prior quarters due to pricing lapping and recent price reductions. They said DIY stayed pressured while DIFM was more stable and strengthening. Management also said they factor fuel and interest cost changes into pricing decisions going forward.
"Just POS in general, as we talked about in our prepared remarks, we are essentially aligned with our net sales growth in the quarter." — Kevin Olsen (CEO·CHAIR)
Vehicle mix, EVs and pricing drivers
Q (Jeffrey Lick · Stephens): Analyst asked how higher gas prices and a shift to smaller cars or EVs affect product planning and parts for fuel efficiency. He also asked how much of the revenue guide cut was pricing versus demand softness.
A: Management said the current vehicle population (prime repair cycle) still favors them and that new car mix changes take a long time to affect the aftermarket. They said they are drivetrain agnostic, see repair opportunities in BEVs with higher average selling prices, and will not split out exact portions of the guide but cited DIY softness and tariff-related price reductions as drivers.
"We see higher average selling prices for repair opportunities in BEV." — Kevin Olsen (CEO·CHAIR)
Will retailers cut retail prices? Factoring costs
Q (Bret Jordan · Jefferies): Analyst asked whether customers will pass tariff refunds into lower retail prices. He also asked if the factoring volume decision was due to AIPA refunds or a change in factoring strategy, and if factoring costs changed materially.
A: Management said they would welcome lower end prices but cannot control or predict whether customers will lower retail prices. On factoring, they said factoring costs have risen because the Fed raised rates and those costs are SOFR plus, but their overall factoring strategy has not changed and they continue to monitor it.
"And we are certainly not making any predictions whether that is gonna happen or not." — Kevin Olsen (CEO·CHAIR)
Discretionary vs essential parts; heavy-duty market share
Q (Gary Prestopino · Barrington): Analyst asked how much of the product portfolio is discretionary versus nondiscretionary. He also asked how much aftermarket parts have grown in heavy duty and where that could go.
A: Management said they do not break out a precise number but that the vast majority of their portfolio is nondiscretionary, with discretionary DIY items concentrated in store front areas. They said the OE still controls about 60% of the heavy-duty aftermarket (versus about 30% on light duty) and they see opportunity to take share with aftermarket solutions.
"But I will tell you that in general, the vast majority of our portfolio is nondiscretionary." — Kevin Olsen (CEO·CHAIR)
Q4 net sales drivers and inventory change
Q (David Lantz · Wells Fargo): Analyst asked what would drive the company to the low versus high end of the Q4 net sales guide. He also asked why inventories declined and what to expect next quarters.
A: Management said the Q4 guide reflects continued softened DIY and pricing actions tied to tariff downs, and that volume from new launches and new business will largely determine outcomes; they feel confident in the 2% to 3% range, which is volume-driven. On inventories, management said prior inventory increases were largely due to capitalized IEFA tariff costs and strategic inventory build last year; they expect inventory to rise a bit over the next quarters and free cash flow to remain in prior run-rate ranges.
"we feel pretty confident with the 2 to 3% range, but largely volume-driven in the back part of the year in Q4" — Charles W. Rayfield (CFO)
Pricing impact timeline; specialty vehicle demand
Q (Tristan Thomas-Martin · BMO): Analyst asked if price reductions begun this year will remain a headwind into early 2027 and when they normalize. He also asked what they see causing lower enthusiast activity and whether SuperATV sells consumables.
A: Management said prices started coming down in the third quarter, expect more price downs in the fourth quarter, and that those actions will have to be lapped into early next year and will have some impact next year. They said demand has strengthened for utility work vehicles while recreational-focused parts and accessories have softened, and they do not disclose specific SuperATV consumable metrics publicly but noted roughly half their portfolio ties to break/fix and 40% to 50% to utility work.
"I would say that we are clearly seeing a stronger performance in the more utility work related type vehicles." — Kevin Olsen (CEO·CHAIR)
Capital allocation and channel size
Q (Justin Ages · CJS): Analyst asked about capital allocation priorities: buybacks, M&A, product development and debt. He also asked the size of DIY versus DIFM channels.
A: Management said the capital allocation strategy has not changed: they monitor debt levels, plan to invest in new product development next year, consider M&A, and take an opportunistic approach to share buybacks (about $15 million per quarter this year) with no target set. They said they do not break out exact channel sizes but reiterated that most of the portfolio is DIFM/professional in backrooms while DIY items are more in front rooms.
"So overall, the capital allocation strategy has not changed." — Charles W. Rayfield (CFO)