The ARB Corporation Ltd (ASX: ARB) share price is down 12% after reporting its FY26 half-year result.
ARB is a global specialist in 4×4 (4WD) vehicle accessories. Its main two markets are Australia and the US.
ARB FY26 half-year result
Here are some of the highlights from the report for the six months to 31 December 2025:
- Total revenue declined 1.2% to $36.2 million
- Underlying profit before tax down 16.3% to $58 million
- Reported net profit after tax (NPAT) dropped 18.8% to $57.1 million
- Interim dividend maintained at $0.34 per share
What happened?
There were a few different elements that led to this result.
ARB said that new vehicle sales were “depressed globally”. The Australian aftermarket sales declined 1.7%, though the open order book saw 5% growth compared to the prior year.
The ASX share reported that exports increased by 8.8%, with 26.1% growth in the US thanks to a strategic relationship with Toyota US, its US e-commerce platform, growth with certain networks, and an increased product range.
Sales to original equipment manufacturers (OEMs) declined 38.2% following OEM customers increasing inventory levels in the second half of FY25.
The weaker Australian dollar didn’t help its expenditure, with a significant portion of its products being manufactured in Thailand, where costs are in Thai baht. Materials and consumables increased from 41% of sales in HY25 to 44% of sales in HY26.
On top of that, the depreciation and amortisation charge increased by 15.9% to $17.8 million following the recent capital expenditure program.
Outlook for the ARB share price
The business said that it expects its FY26 second half sales margins to be broadly in line with the first half.
The Australian aftermarket remains challenging, with new vehicle supply of key vehicle models continuing to trail last year, as well as there being ongoing fitting resource constraints. However, its order book remains “healthy”.
The outlook for the export market remains “positive” despite some regional challenges because of new vehicle supply of certain models. The export order book has increased and continued order growth in the second half of FY26 is expected, particularly in the US market.
OEM inventory levels and weaker sales of key vehicle models is expected to continue to impact sales to OEM customers.
Overall, its second half performance is expected to improve compared to the first half of FY26 and trade “closer” to the prior corresponding period.
The business plans to expand in ANZ with new and upgraded retail stores and stockists, develop its distribution and products for the USA market, and increase distribution and manufacturing capacity to accommodate future growth.
It’s not one of the ASX growth shares I’m looking to buy right now, but there could be an opportunity here if new vehicle sales recover. The US demand is the main bright spark at the moment.
