The ARB Corporation Ltd (ASX: ARB) share price is in focus after the company reported a 1.0% decline in sales to $358 million for the first half of FY2026, with profit before tax down 18.8% to $57.1 million.
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What did ARB Corporation report?
- Sales revenue: $358.0 million, down 1.0% over 1H FY2025
- Reported profit before tax: $57.1 million, down 18.8%
- Underlying profit before tax (excl. non-operating items): down 16.3%
- Profit after tax: $42.2 million, down 17.2%
- Earnings per share: 50.6 cents, down 17.9%
- Interim dividend: 34 cents per share, fully franked
What else do investors need to know?
Sales to the Australian Aftermarket, which make up nearly 57% of ARB's business, slipped 1.7% in a soft new vehicle market. However, export sales increased 8.8%, with standout growth of 26.1% into the US on the back of strategic partnerships and expanding product range.
Original Equipment Manufacturer (OEM) sales fell 38.2% after a build-up of inventory in the prior half and lower global new vehicle sales. Cash holdings at 31 December were $59.4 million, reflecting robust operating cash inflows but impacted by special dividend payments.
What's next for ARB Corporation?
Management expects sales margins in the second half to be broadly in line with the last period, helped by hedging the company's Thai baht exposure. While market conditions remain challenging in Australia due to tight new vehicle supply and ongoing skilled labour shortages, ARB's order book remains healthy and investment in new stores and e-commerce continues.
Export growth is expected to continue, particularly in the US. OEM sales may recover modestly in the second half as inventory levels normalise. Overall, ARB expects 2H FY2026 financial performance to pick up compared to the first half, with a long-term focus on building scale in Australia and international markets.
ARB Corporation share price snapshot
Over the past 12 months, ARB shares have declined 44%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 9% over the same period.
