COLMAR, Pa. - Dorman Products , Inc. (NASDAQ:DORM), a leading supplier in the motor vehicle aftermarket industry, has reported a significant beat on adjusted earnings per share (EPS) for the fourth quarter, alongside providing an optimistic guidance for the fiscal year 2024 that surpassed analyst expectations. The company's shares surged over 3% in response to the positive news.
For the fourth quarter, Dorman announced an adjusted EPS of $1.57, which was $0.16 higher than the analyst consensus of $1.41. Net sales for the quarter were slightly below expectations at $494.3 million, compared to the consensus estimate of $494.86 million. However, when accounting for an extra week in the prior year period, the company's net sales would have shown an increase of 3%.
The reported net sales represent a 1% decline from the previous year's same quarter, but this is attributed to the extra week in the fourth quarter of 2022, which contributed approximately $19 million in net sales.
The company's robust performance is credited to a substantial improvement in gross margin, which increased by 780 basis points YoY, and a record diluted EPS of $1.60, up by an impressive 182% compared to the same quarter last year.
Dorman's President and CEO, Kevin Olsen, highlighted the company's record profits and strong cash flow, driven by gross margin improvements. He also emphasized the company's focus on reducing debt, with $30 million repaid in the quarter and $159 million over the year.
Looking ahead to the fiscal year 2024, Dorman anticipates net sales growth in the range of 3% to 5% over 2023. The company's guidance for diluted EPS is set between $4.71 and $5.01, with adjusted diluted EPS expected to be between $5.40 and $5.70.
This forecast is notably higher than the analyst consensus of $5.18 for adjusted EPS. The guidance includes the impact of recent cost reduction actions and assumes a tax rate of 24%, while excluding potential impacts from future acquisitions and divestitures, supply chain disruptions, significant inflation and interest rate changes, and share repurchases.
Investors have responded positively to the earnings beat and the company's confident outlook for the coming year, as reflected in the stock's +3.29% rise. Dorman's commitment to innovation and operational efficiency continues to drive its success in the competitive motor vehicle aftermarket industry.
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