Motorcar Parts of America (MPAA) Q2 2027: Revenue Miss and Guidance Cut Explained

Motorcar Parts of America reported fiscal second-quarter revenue of $169.2 million, missing expectations of $201.2 million and sliding 23.6% from the same quarter a year earlier. The company posted a GAAP diluted loss of $0.03 per share against a consensus estimate of $0.49. Basic EPS came in at $0.07, and GAAP net income was $1.36 million, a figure kept positive in part by roughly $11.1 million in IEEPA tariff refunds that bolstered gross profit.

The core problem was a demand timing squeeze. Buyers delayed new orders while they worked through inventory they had acquired from First Brands, the auto parts supplier that went bankrupt. That inventory liquidation temporarily depressed order flow and stripped tens of millions from the top line. Management also flagged industry softness and lower tariff pass-throughs as contributing headwinds, alongside an unfavorable foreign currency impact of roughly $2.4 million on gross margin.

The quarter's results forced a meaningful guidance cut. Full-year net sales are now expected at $715 million to $740 million, down from a prior range of $780 million to $800 million. Full-year operating income guidance was set at $37 million to $44 million, which includes about $30 million of non-cash expenses and roughly $5 million of transition costs tied to the relocation of heavy-duty manufacturing operations to Mexico.

CEO Selwyn Joffe pointed to roughly $60 million in new annualized business awards as a reason for confidence, noting that initial shipments have already begun and all awards are expected to be shipping by fiscal year end. The company is also targeting approximately $25 million in additional annualized new business awards before March 31, 2027. Neither figure includes any contribution from the planned relaunch of the Centric Parts brake brand, which management described as a significant opportunity created by the shifting competitive landscape following the First Brands bankruptcy.

The company missed estimates in five of the prior seven quarters, with the worst prior slip being Q1 2027's reported loss of $0.71 against an estimate of $0.05. The one clean beat in that stretch was Q4 2026, when the company reported $0.49 against an estimate of $0.33. Investors will be watching whether the new business award ramp in the second half of fiscal 2027 can close the gap between management's optimism and the numbers on the page.