The ARB Corporation Ltd (ASX: ARB) share price has crashed 15.39% in Tuesday's trading.
The decline comes after the 4WD and light commercial vehicle accessories manufacturer posted its first-half results for FY26, ahead of the ASX open this morning.
At the time of writing, ARB shares are changing hands for $20.79 a piece. The decline means the shares are now 34.9% lower for the year to date. They're also 45.45% below the trading price this time last year.
It's also the lowest price ARB shares have traded at since August 2020.
Here's what the company reported this morning.
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Sales, profit, and earnings slump over the first half of FY26
For the six months ending 31st December 2025, ARB reported a 1% drop in its sales revenue compared to the prior corresponding period (pcp), to $358 million. The result reflected weaker domestic conditions, partially offset by strong growth offshore.
The company also posted a significant 18.8% decline in its reported profit before tax, to $57.1 million, and a 16.3% drop in its underlying profit before tax (excluding non-operating items) to $57.95 million. ARB said this decline was due to reduced margins, increased depreciation, and flat operating expenses. Over the period, profit after tax dropped 17.2% to $42.2 million.
In a revenue update last month, ARB explained that its gross margins were squeezed by a weaker Australian dollar against the Thai baht, which increased manufacturing costs. In addition, lower factory overhead recoveries followed elevated inventory levels in the pcp.
The company also flagged several one-off items during the half. These included a $1.3 million pre-tax gain on a property sale, partially offset by $2.2 million in goodwill impairment costs linked to the termination of the Thule distribution agreement.
Dividend payout remains unchanged
Despite the slump in revenue and reported profit for the first half of FY26, ARB's interim dividend is unchanged. Management has agreed to pay 34 cents per share fully franked at a 30% tax rate. The interim dividend will be paid on the 17th April 2026, and the record date is the 2nd of April 2026.
Management also said that a dividend reinvestment plan and a bonus share plan will operate for the interim dividend. This will assist with funding for ARB's ongoing expansion programme.
What is the outlook for ARB this year?
Management said that ARB's first-half FY26 result was "achieved in challenging conditions both locally and internationally, with the Australian dollar at historical lows against the Thai Baht, softness in new vehicle supply in Australia and other parts of the world and reduced consumer sentiment".
But going forward, ARB expects sales margins for the second half of FY26 to be broadly in line with those achieved in 2H FY 2025. This should be supported by the fact that its Thai baht exposure is nearly fully hedged at slightly more favourable rates.
Overall, ARB's financial performance in the 2H FY26 is expected to improve on H1 and trade closer to the pcp.
It added, "The Board remains confident in the Company's long-term growth prospects across both domestic and export markets and is excited by the strong performance of the US business. ARB is well positioned for sustained long-term success, supported by its globally recognised brands, loyal customer base, very capable senior management and staff, strong balance sheet and growth strategies in place."
