Dorman (DORM) Q2 EPS Jumps 23%

Core Insights - Dorman Products reported strong Q2 2025 results, exceeding consensus expectations for both GAAP revenue and non-GAAP adjusted earnings per share, driven by growth in the Light Duty segment and effective supply chain initiatives [1][5][11] - The company raised its full-year 2025 guidance, reflecting confidence in continued operational improvements and market demand [1][11] Financial Performance - Q2 2025 GAAP revenue reached $541.0 million, surpassing the analyst estimate of $517.0 million, marking a 7.6% increase from $503.0 million in Q2 2024 [1][2] - Adjusted diluted EPS for Q2 2025 was $2.06, exceeding the non-GAAP estimate of $1.80 and showing a year-over-year increase of 23.4% from $1.67 [1][2] - Gross profit margin improved to 40.6%, up from 39.6% in Q2 2024, while adjusted SG&A expenses as a percentage of revenue slightly increased to 24.3% [2][6] Segment Performance - The Light Duty segment experienced a 10% year-over-year sales growth, with segment profit margins widening to 18.5% [5] - The Heavy Duty segment saw modest revenue growth of 1%, but profitability declined, with segment profit margin dropping by 360 basis points [5] - The Specialty Vehicle segment's sales contracted by 3%, yet maintained strong margins at 17.3% [5] Business Strategy - Dorman Products focuses on expanding its product line and distribution reach, with approximately 138,000 unique parts available as of December 31, 2024 [3][4] - The company launched 5,335 new SKUs in 2024, including first-to-market solutions, contributing to sales growth in the Light Duty segment [7][8] - Dorman has diversified its global supply chain, reducing dependence on China to 30-40% of sourcing in 2025, down from approximately 70% six years ago [9] Management Outlook - The company raised its FY2025 net sales growth guidance to 7-9%, up from 3-5%, and adjusted diluted EPS guidance to $8.60-$8.90, up from $7.55-$7.85 [11] - Management expects to maintain an effective tax rate of 24% for FY2025 [11] - Investors should monitor inventory management, product innovation pace, and relationships with major customers, which account for approximately 39% of total net sales [10][12]