Company Reports

ARB's fiscal 2026 underlying pretax profit was AUD 119 million, down 11% on last year. Revenue fell 4% as export revenue growth of 1% was more than offset by 3% lower sales in the Australian aftermarket and 27% lower sales to original equipment manufacturers. Shares rose 14%.

We expect ARB's strong earnings growth to return, driven by the competitively advantaged Australian business that benefits from industry tailwinds. We forecast top-line growth will be underpinned by incremental increases in domestic market share as the firm rolls out stores, in addition to continued international expansion, with a focus on the US

ARB's interim 2026 underlying net profit was AUD 43 million, down 14% on last year. Revenue was down about 1% amid weaker sales to the Australian aftermarket and sharply lower sales to vehicle manufacturers. Gross margin declined to 56% from 59% last year.

We expect ARB's strong earnings growth to return, driven by the competitively advantaged Australian business that benefits from industry tailwinds. We forecast top-line growth will be underpinned by incremental increases in domestic market share as the firm rolls out stores, in addition to continued international expansion, with a focus on the US

We expect ARB's strong earnings growth to return, driven by the competitively advantaged Australian business that benefits from industry tailwinds. We forecast the firm's top-line growth will be underpinned by incremental increases in domestic market share as it rolls out stores, in addition to continued international expansion, with a focus on the US

ARB expects underlying pretax profit of AUD 58 million in the first half of fiscal 2026, 16% lower than a year ago. Adverse currency movements, a softer Australian market, and unwinding operating leverage are pressuring margins. Shares fell about 12% on the day of the update.

ARB provided a trading update for the first quarter of fiscal 2026. Sales are up 4% on last year. Export sales growth of 18% was offset by 1% growth in the core Australian aftermarket business and a 33% decline in original equipment manufacturer sales.

ARB's fiscal 2025 underlying net profit was AUD 97 million, about 8% lower than last year. Gross margins declined slightly amid input cost inflation and an uptick in labor costs, and more than offset the 5% lift in revenue. It announced a fully franked special dividend of AUD 50 cents per share.

We expect ARB's strong earnings growth to return, driven by the competitively advantaged Australian business that benefits from industry tailwinds. We forecast the firm's top-line growth will be underpinned by incremental increases in domestic market share as it rolls out stores, in addition to continued international expansion, with a focus on the US

New car sales in Australia are declining. The latest data from the Federal Chamber of Automotive Industries has calendar year-to-date new car volumes in Australia about 5% below last year. This is a sharp deceleration from May 2024, when year-to-date new car sales were up about 12%.

We expect ARB's strong earnings growth to return, driven by the competitively advantaged Australian business that benefits from industry tailwinds. We forecast the firm's top-line growth will be underpinned by incremental increases in domestic market share as it rolls out stores, in addition to continued international expansion, with a focus on the US

ARB reported interim 2025 net profit of AUD 51 million, down 1% on the previous year. This was despite a revenue lift of 6% over the period and slightly improved gross margins, as increased labor costs weighed on the bottom line.

ARB's sales are up 7% in September-quarter fiscal 2025, compared with the previous corresponding period. However, profit after tax is modestly down on the PCP, with labor costs a key headwind.

We expect ARB's strong earnings growth to persist, driven by the competitively advantaged Australian business that benefits from industry tailwinds. We forecast the firm's top-line growth will be underpinned by incremental increases in domestic market share as it rolls out stores, in addition to continued international expansion, with a focus on the US

ARB returned to profit and revenue growth in fiscal 2024. Revenue grew 3% to AUD 693 million—marginally below the fiscal 2022 sales peak of AUD 695 million. Top-line growth was largely driven by continued strength in the core Australian aftermarket business and a rebound in original equipment manufacturing, offset by continued weakness in export markets—particularly the US and China. Improved new vehicle supply was a tailwind, with new Australian vehicle sales about 13% higher than in fiscal 2023. There was particularly strong growth in key models in ARB’s target market, notably in sales of the top-two most popular models, Ford Ranger and Toyota Hilux, up 35% and 15%, respectively.

ARB is returning to sales growth. Sales are up about 6% in the third quarter of fiscal 2024 after the first half was roughly flat, combining to year-to-date sales growth of about 2%. We had expected sales growth to pick up a bit quicker with improving vehicle supply, both globally and domestically. Compared with fiscal 2023, Australian new-vehicle sales are up about 16% financial year to March. This reflects exceptional growth in popular models in ARB's target market, such as the Ford Ranger and the Toyota HiLux, which are up 33% and 16%, respectively, year to date. We lower our fiscal 2024 revenue forecast by 2% to AUD 695 million, about 4% above fiscal 2023. The change is immaterial to our AUD 26 fair value estimate.

We expect ARB's strong earnings growth to persist, driven by the competitively advantaged Australian business that benefits from industry tailwinds. We forecast the firm's top-line growth will be underpinned by incremental increases in domestic market share as it rolls out stores, in addition to continued international expansion, with a focus on the U.S.

We raise our fair value estimate for shares in ARB by 6% to AUD 26 per share—principally due to the time value of money. First-half fiscal 2024 revenue was flat compared with the prior corresponding period. The 14% decline in export sales was offset by 4% growth in the Australian aftermarket and 54% growth in original equipment manufacturer sales. The loss of major U.S. customer 4 Wheel Parts due to a takeover is weighing on U.S. sales—ARB’s largest offshore market. OEM sales have recovered significantly with improving vehicle availability and increased volume within existing contracts amid new model launches. We think the Australian aftermarket is also largely tied to new vehicle sales, but industrial disputes across Australian ports are disrupting sales.

Shares in ARB are expensive compared with our unchanged AUD 24.50 fair value estimate. We think the market is overestimating ARB's ability to replicate its Australian success offshore—particularly in the United States. We are yet to see evidence of the brand equity and retail price premium enjoyed in Australia translating to foreign markets. Revenue is up about 1% in the first quarter of fiscal 2024, with domestic aftermarket and original equipment manufacturer sales growth offset by an 8% decline in export sales. Despite largely flat revenue, aftertax profit was up about 10% on the previous corresponding period with improved gross margins and a mix shift to the more profitable domestic business. We make no change to our fiscal 2024 net profit after tax forecast of AUD 102 million—a 16% increase on fiscal 2023 as ARB cycles a relatively weaker second half.

Shares in ARB continue to screen as expensive following the release of worse-than-expected fiscal 2023 results. Net profit after tax, or NPAT, fell 28% on fiscal 2022 to AUD 88 million—10% below our forecast. While the 3% top-line decline was broadly as expected, the sharply higher cost base weighed on profitability more than we anticipated. We expect margin pressure to persist into next year and lower our fiscal 2024 NPAT forecast by 4% to AUD 102 million. Nevertheless, the reduction in our near-term earnings forecasts is broadly offset by the time value of money, and we maintain our AUD 24.50 fair value estimate.