- Motorcar Parts of America, Inc. (NASDAQ: MPAA) reported net sales of $167.7 million. MPAA Q3 2026 earnings reflected temporary sales challenges as this represents a decrease from $186.2 million in the prior year. However, sales to a large customer are now rebounding in Q4. Moreover, the company generated $23.7 million in cash for the nine-month period. For the official MPAA Q3 2026 earnings press release, visit the investor relations page.
Market Performance Update
Motorcar Parts of America trades on the NASDAQ exchange under ticker MPAA. The company maintains solid liquidity with cash and revolver availability of about $146 million. Furthermore, net bank debt decreased by $10.9 million during the nine-month period. This totaled $70.5 million as of December 31, 2025. In addition, the company repurchased 669,472 shares for $8.4 million year-to-date. For real-time data and MPAA Q3 2026 earnings updates, visit Yahoo Finance MPAA.
MPAA Q3 2026 Earnings: Third Quarter Results
Third quarter net sales were $167.7 million. This compares with $186.2 million in the prior year. The decline primarily reflects about $17 million in reduced orders from one large customer. Specifically, this customer closed stores and consolidated distribution centers. However, orders from this customer are now increasing in Q4 FY2026. Consequently, management expects improved sequential results.
Gross profit for the fiscal third quarter was $32.9 million. This compared with $44.9 million a year earlier. Gross margin was 19.6% compared with 24.1% in the prior year. Nevertheless, gross margin improved sequentially. Specifically, it rose from 18.0% in Q1 to 19.3% in Q2 and 19.6% in Q3. As a result, margin accretion trends remain positive.
Operating Performance Details
Operating income for the fiscal third quarter was $8.3 million. This compared with $17.6 million in the prior year. The decline reflects lower sales volume. Meanwhile, interest expense decreased by $3.5 million to $10.9 million. This reduction resulted from lower outstanding balances under the credit facility. In addition, lower interest rates contributed to savings. Furthermore, reduced utilization of accounts receivable discount programs helped.
Nine-Month Fiscal 2026 Performance
Net sales for the fiscal nine-month period increased $13.3 million. This represented 2.4% growth to $577.5 million from $564.2 million. Notably, this growth occurred despite about $40 million in reduced orders from one customer. Gross profit for the nine months was $109.5 million. Gross margin was 19.0% compared with 20.4% a year earlier. Nevertheless, the company maintained profitability through cost management.
Operating income for the nine-month period was $44.8 million. This compared with $23.6 million in the prior year. The improvement reflects foreign exchange impacts on lease liabilities and forward contracts. Interest expense decreased by $6.6 million for the nine months. It totaled $36.4 million compared with $43.0 million a year ago. As a result, the company benefited from lower debt levels and rates.
Quarterly Revenue Trend
MPAA Q3 2026 Earnings: Quarterly Revenue Performance (FY2024-FY2026)
Management Commentary and Outlook
CEO Selwyn Joffe emphasized the positive outlook. According to Joffe, ordering activity from the large customer is returning to normal levels. Most importantly, the changing competitive landscape creates opportunities. A competitor bankruptcy provides new business commitments. Furthermore, demand for replacement parts is growing. This reflects aging vehicles and increasing miles driven. Consequently, the company expects favorable benefits ahead.
Joffe highlighted accelerated brake-related sales momentum. This will benefit overall gross profits. In addition, the company is pursuing strategic alternatives for EV technology. The company also aims to enhance shareholder value. This includes opportunities to divest non-strategic assets. Similarly, business expansion in Latin America remains a priority.
Gross Margin Analysis
MPAA Q3 2026 Earnings: Gross Margin Trend by Quarter
Industry Drivers and Competitive Position
Several positive industry dynamics support the outlook. The bankruptcy of a competitor creates market opportunities. As a result, the company secured new business commitments. Furthermore, vehicle aging trends favor replacement parts demand. The average vehicle age continues to increase. Similarly, miles driven are rising. Therefore, aftermarket parts demand should remain robust. For industry context, visit the Auto Care Association.
The company’s product portfolio spans key categories. These include alternators, starters, wheel bearings, and hub assemblies. Brake products include calipers, pads, rotors, master cylinders, and power boosters. In addition, turbochargers and diagnostic equipment round out offerings. Products serve imported and domestic vehicles. Light trucks and heavy-duty applications are also covered.
Revised Fiscal 2026 Guidance
Management revised fiscal 2026 sales guidance to $750 million-$760 million. This reflects the reduced ordering from the large customer. Operating income guidance is $72 million-$79 million. Depreciation and amortization will be about $10 million. These estimates reflect tariff impacts enacted as of February 9, 2026. Most importantly, they exclude certain non-cash and one-time expenses. As a result, underlying profitability remains intact.
Shareholder Returns and Capital Allocation
The company maintains a balanced capital allocation approach. Year-to-date share repurchases totaled 669,472 shares for $8.4 million. The average purchase price was $12.47 per share. In Q3 alone, the company repurchased 381,562 shares for $5.0 million. The authorization program has $25.1 million remaining. Furthermore, the company reduced net bank debt by $10.9 million. This demonstrates commitment to balance sheet improvement.
MPAA Q3 2026 Earnings: Key Takeaways
In summary, MPAA Q3 2026 earnings reflected temporary customer challenges now reversing. Gross margin improved sequentially to 19.6%. The company generated $23.7 million in cash for the nine-month period. Most importantly, new business opportunities emerged from competitor disruption. Management expects sales recovery in Q4. Looking ahead, brake-related momentum and industry dynamics support growth. For more information, see the MPAA Q3 2026 earnings investor relations page. For company background, visit Motorcar Parts of America official website. Follow the company on LinkedIn for the latest updates.
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